The press daily reports ever louder shrieks of concern that Trump’s actions – tariffs, deportations, chainsaw destruction of federal agencies by people barely out of their teens – risk causing a worldwide economic crash.
The naïve shriekers Bill Ackman, Larry Fink, Larry Summers and countless others don’t yet realize that there’s no risk: it’s the guaranteed end state of a plan that Trump developed before the election – but has never publicly revealed.
We now know this from a 64-minute “infomercial” released on April 1 by stock promoter Porter Stansberry in the form of a staged interview with well-known Trump insider and investment advisor Brad Thomas.
His most compelling takeaway: “It’s actually the left-wing media who’ve got the most accurate read on his plans . . . They’re actually right: Trump does want to destroy the economy” (minute 14:30 of the video stream).
Thomas identifies himself as a “dyed in the wool Trump loyalist” and a trusted advisor for many years who has been closely involved with Trump’s real estate interests. He discussed the demolition plan with Trump at Mar-a-Lago.
Basic to the plan he reveals is Trump’s having recognized that correcting America’s impossibly unsustainable finances must produce colossal losses one way or another no matter who is in charge. Trump and his close personal advisors drew two conclusions.
First, it is better to execute “a controlled demolition of the financial markets” comparable to a controlled forest burn to “get rid of dead wood” than to permit a haphazard collapse as in previous depressions. Second, it is better to front-run the inevitable crash so as to place the blame squarely on his predecessor.
This repeats Ronald Reagan’s successful game plan to create the crisis early in the election cycle, resulting in his re-election. Similarly, this plan ensures “Trump’s successor J D Vance takes over the throne in 2028.”
One can make sense of the current controversies in the financial press only by distinguishing three groups of Trump supporters:
* The inner core who knew the plan to demolish the economy.
* The opportunist financiers and businessmen who backed Trump expecting an orderly economic downturn leading to financial sustainability.
* Those members of the public who voted for Donald Trump for non-financial reasons such as immigration and anger over woke ideology.
The inner core knew the plan and positioned themselves by moving their assets and presumably shorting the sectors now targeted for demolition.
The other two are just deluded. As Thomas says, “Nobody wants to think their guy, who they put their faith in, would do this. It seemingly betrays every promise he made on the campaign trail” but Trump “couldn’t announce before the election because if he had no one would have voted for him.”
They will experience devastating financial losses. This dawning realization explains the increasingly bitter disputes among those in Trump’s camp in the last few days.
The plan could be said to draw on the Schumpeterian idea of creative destruction, looking back to earlier overbuilding of railroads in the 19th century and fiber optics in the 20th, which, after their crashes, led to sound economic growth.
Stansberry states, “There is no official record of this, but those in the inner circle, like Brad, know exactly what is coming.” Thomas avers that “what’s on the other side of this economic reset is I believe the greatest wealth creation period America has ever seen.”
The extended sales pitch conveys much insightful analysis, noting particularly that Biden’s “booming economy” was based only on mushrooming debt. In fact, real wages were declining. (The argument that wages were rising was based on nominal wages.)
The inner core accept with equanimity that the planned actions could “decimate millions of investors” but “there is no other option, because America is on the precipice . . . . There will be financial turmoil for tens of millions of people.”
Some of today’s most successful companies will be “crushed” while, after a reset, a small group of companies will make millions. “What will happen on the other side of this crisis will make you richer than you ever imagined” (should infomercial watchers follow the presentation’s advice).
This will happen in two ways:
* Investing in firms Stansberry recommends which are wired to surge in the new policy environment of deregulation, degreening and redirected federal financial flows.
* Interest rates will decline as the market crash reduces demand, easing purchase of the crashed assets by those with cash and credit. “By crashing the economy now, Trump will be able to force the Fed’s hand” (to lower interest rates).
The presenters’ recommendations to make a fortune in the planned crisis are to have no illusions about what is coming and to:
* Sell all assets immediately that one is not comfortable holding through a panic. (Thomas specifically mentions overpriced AI and tech, Stansberry mentions Boeing and Apple.) Get cash now!
* Buy the six companies Stansberry recommends (the pitch of the infomercial): “Trump’s secret companies” that are owned by the Trump friends who enabled him and are now about to collect.
* “The big money is going to be made in the little-known companies backed by Trump’s inner circle and his powerful supporters, people he’s not going to let suffer during the coming reset.”
Ordinarily, a “controlled demolition” or a “controlled burn” is executed only after establishing barriers or firebreaks and ensuring everyone is out of harm’s way.
Those potentially affected by the market crash now being engineered may therefore want to watch closely how carefully planned and tightly executed is Trump’s plan, which in any event is the instantiation of Irving Kristol’s famous insight about contemporary America:
“There’s nothing wrong with this country that couldn’t be cured by a long, hard depression.”
After authoring a classic study of warfare, Jeffrey Race researched and taught economics, political science and technology transfer in Asia for 50 years. He now heads an electronics design firm in Boston.
