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Here's What Gary Cohn Sees: Tariffs = Inflation + Slow Growth = Stagflation


  • Gary Cohn resigns from President Trump's staff.
  • Who wants to be on President Trump's staff anymore?
  • Is there inflation or not? (File under "I told you so.").
  • Consider your hedges carefully.

MoSINational Economic Council Director Gary Cohn is resigning from President Donald Trump's administration over the tariffs that are being imposed on steel and aluminum. The immediate result was that Dow (SIA) and S&P 500 (SPY) futures got crushed in the aftermarket. We'll see what it looks like tomorrow.

Stock market poised to fall on news of Cohn's departure from Trump's White House

Stock market, dollar rattled after Gary Cohn resigns from Trump White House

Here's why Cohn leaving is really important to me. He's a stock market guy from Goldman Sachs (GS). He's a globalist that realizes that America makes a lot of money being global. Now, I will say, I'm not so sure he doesn't want it all for himself and his buddies, but nonetheless, the problem with globalism isn't the global, it's the "ism" as in 1%ism.

So, without the globalist stock market guy in the White House, there's more concern about a potential trade war and what the Fed might be up to in the next few years. I talked about this stuff in these two articles:

Macro Monday: Welcome To President Trump's Economy And Markets

Macro Monday: Will Protectionism Be Different This Time?

I think it is very important to think that maybe, just maybe, these guys trying to run the economy are the types who drank so much of their own Kool-Aid and they just don't understand how the economic machine works. Here's how it works in case you missed it:

Inflation, Deflation or Stagflation?

As I've said, there is a war between inflation and deflation. On the inflation side is a whole lot of money born of QE. On the deflation side is aging demographics, global debt and technology.

It's my opinion, that we shouldn't normalize the monetary conditions much. Just a little to feel good. But

MARCH MADNESS!!! There are fewer and fewer spaces available to Margin of Safety Investing at the $1 per day rate or $365 per year. Try us on a rare "free trial" and see my "Very Short List" of stocks that can lead in the next decade.

The world is about to become very volatile. We are at the intersection of inflation, deflation and stagflation. Missteps can cause the global economy to tumble into recession and for markets to revert to historical valuations which would mean a 30-50% decline. Find out where the safe spots are and how to benefit from global change under any circumstances.

This article was written by

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25+ years of beating markets with less risk. Margin of Safety Investing. "The three most important words in investing are margin of safety." - Warren Buffett 

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I own and operate Bluemound Asset Management, LLC - a boutique registered investment advisory that manages and consults on 9 figures of wealth. I was lucky to have several mentors who managed billions of dollars, including, one who literally helped write the book on option selling. I have now managed money since the 1990s through several major market cycles. 

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Analyst’s Disclosure: I am/we are short SPY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

We own a small put position on SPY. I own a Registered Investment Advisor - https://BluemoundAssetManagement.com - however, publish separately from that entity for self-directed investors. Any information, opinions, research or thoughts presented are not specific advice as I do not have full knowledge of your circumstances. All investors ought to take special care to consider risk, as all investments carry the potential for loss. Consulting an investment advisor might be in your best interest before proceeding on any trade or investment.

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