As we discussed yesterday, we’ve seen some interesting moves in the markets over the past month – including a very curious correlation between the Dow Jones Industrial Average, the US Dollar Index, Bitcoin, and Ripple.
These moves are sending a signal. They suggest that we’re going to see a major recapitalization of the United States.
Simply put, bad policies over the past 50 years have put the federal government on the precipice of default. The current trajectory cannot continue for much longer.
If we account for its massive unfunded liabilities in future Social Security and Medicare payments, the US government is already insolvent. If it were a private company, it would have already had to file for bankruptcy.
It’s obvious that the globalist faction welcomed the chaos that would come from a US government default. That’s how they envision instituting a centralized global government – creating order out of chaos.
Had Kamala Harris won the 2024 presidential election, the globalist faction would have remained in control… and we would likely see the government go bust within four years’ time. I doubt the US Treasury would be able to secure enough investment to roll over the $16.8 trillion in government debt maturing through 2028.
Of course, the Trump administration faces the same problem. A massive debt wall is headed straight towards them.
The difference is, a powerful faction of American financial interests have coalesced around the Trump team – and it’s clear that they are determined to save the country. After all, it’s in their best interest to do so. All their wealth resides in America.
That’s where recapitalization comes in. It’s about reorganizing America’s financial and economic framework to stabilize the capital structure. This must be done on three levels:
- Government Debt and Fiscal Health
- Economic Revitalization
- US Dollar Stability
We talked about the first item yesterday. That’s about cutting trillions in federal spending to balance the budget… or at least get as close as possible.
Economic revitalization is about facilitating broader economic reforms to restore a vibrant middle class in this country.
As we’ve discussed before, we “financialized” the entire US economy over the past 50 years. That is to say, we shifted most of our resources away from producing economic value and towards maximizing financial value.
Economic value is the value an individual places on a good or service based on the benefit it provides to them. This concept is fundamental to having a robust economy.
Meanwhile, financial value is simply the value of an investment based on its financial performance. In other words, financial value is what an investor could sell something for today.
I think the best illustration of this is the widespread adoption of stock trading on mobile phones that we’ve seen over the last several years.
Think of all those people who are constantly checking their Robinhood or Webull accounts on their phone. Most of them have no experience with investing… but they’re on their phones buying and selling stocks daily.
Do they know anything about the companies they are buying stock in? Are they assessing the economic value that those companies produce?
No… they are just hoping the number goes up on their screen. Then they can sell and say they “made money”.
And consider the flipside – who’s selling them those stocks?
Estimates suggest that 70-90% of all activity in the stock market is driven by robo-traders run by large financial institutions. Those algorithms are constantly trying to “scalp” a few percentage points worth of gains with their trades – again, so the number on their screen goes up.
At the end of the day, what does any of this accomplish? What economic value does it produce?
Meanwhile, our core infrastructure in this country has fallen into a state massive disrepair… our electrical grid is fragile and vulnerable to attack… and we moved our once great manufacturing base to Asia. But as Elon Musk likes to say – if you don’t make stuff, there’s no stuff.
Economic revitalization is about addressing these three issues.
Not from a top-down command-and-control approach, mind you. But by incentivizing investment at the local level – so that all solutions are localized. That’s the key to resiliency.
Of course, it’s not going to be perfect, fast, or predictable. But the market is signaling that we’re going to see a sincere shift in economic policy.
Then the third plank of recapitalization is dollar stability. Let’s talk about that tomorrow…
-Joe Withrow
P.S. The big takeaway here is that decades of financialization is about to be reversed. That’s going to be a long, messy process… but the process has already begun. That’s what the markets are telling us.
This shift will fundamentally alter capital flows – away from financialized assets and towards real assets with tangible economic value.
That’s great news. And we can structure our own finances and our personal investments to leverage this once-in-a-generation change.
That’s where our short course Finance for Freedom comes in. It provides a step-by-step approach to personal finance geared towards the new rules of money for the 2020s and beyond.
More information on the course right here: https://phoenician-league.lpages.co/finance-for-freedom-short/