The first 100 days of the Trump administration have brought some surprises and disappointments – as well as some new threats and new opportunities for precious metals investors.
Among the disappointments was President Trump's inability to push Obamacare repeal through Congress. The White House intended for the GOP's replacement to reduce the deficit and lay the groundwork for tax cuts.
Now there is a very real chance that no tax reforms whatsoever will be passed this year. And that would be an even bigger disappointment to many investors. Ideological divisions within the GOP may well lead to debt ceiling brinksmanship and a possible government shutdown.
Trump's surprise about-face on foreign policy in ordering bombings in Syria could have far-reaching implications for U.S. relations with other problem regimes including Iran, Russia, China, and North Korea. The geopolitical risks going forward are many and range from a new Cold War, to trade and currency wars, to the worst-case scenarios of a North Korean attack on Hawaii or an all-out nuclear war.
The debate over what to do about Assad's regime in Syria is a sideshow compared to the looming conflict with China. Unlike Syria, China is a major world power that has the ability to hurt the U.S. economically and undermine its geostrategic position in the world.
The Chinese economy is drowning in debt that is tied to overvalued real estate and overbuilt infrastructure (including its infamous “ghost cities”). The only way to avert a crash may be for Chinese authorities to devalue their currency.
That's exactly what Jim Rickards, author of Currency Wars and The Death of Money, thinks will happen. He expects the Chinese yuan to be devalued. That, in turn, could trigger turmoil in U.S. financial markets and an angry response from the Trump administration.
Gold and Silver Shine Despite Fed Rate Hikes
During times of rising geopolitical uncertainty, precious metals tend to benefit from safe-haven inflows. So far in 2017, gold and silver have been off the radar of most investors as global equity markets have remained stubbornly elevated – seemingly impervious to any bad economic news or troubling developments in international relations.
