Whether you like him or not, President Donald Trump has ignited one of the greatest opportunities the stock market has ever seen.
I’m not talking about the stock market as a whole, although most major indexes have indeed hit countless new all-time highs during his first term.
No, I’m talking about a very specific area of the stock market, that has been left for dead for the last 40 years.
It all started on July 22nd 2019, when President Trump signed the most important memo of his first term.
In a single act, the President sent a signal that the U.S. economy was about starting a tectonic shift… one that would undo 30+ years of economic decline… and which would generate trillions of dollars’ in wealth in the years to come.
The media barely noted this development, as the Democrats had just launched their impeachment investigation into the President’s interactions with Ukraine. And Wall Street didn’t catch on either, as they were too busy worrying about the trade war with China.
However, nestled within the two paragraphs of Trump’s Presidential memorandum to the Department of Defense was one of the biggest statements in the history of the U.S. national defense… and the U.S. economy.
The President invoked section 303(a)(5) of the Defense Production Act.
The Defense Production Act was established in 1950 during the Cold War between the U.S. and the Soviet Union. In its simplest rendering, the Act gave the president the ability to accelerate key sectors of the U.S. economy in the name of national security.
Let’s say the U.S. economy relies excessively on another country for a certain resource. If the President decides that this reliance could hurt the U.S. economy from a strategic perspective, he can invoke the act to dramatically cut regulations and even provide government loans to domestic producers of the resource in order to boost domestic production.
In the case of President Trump’s memo in July 2019, he was invoking section 303(a)(5) of the Defense Production Act of 1950 to determine that the “separation and processing of Light Rare Earth Elements is essential to the national defense.”
While this particular memo concentrated on rare earths elements, as a broader policy it sent the signal that the Trump administration viewed the domestic production of strategic elements as a matter of national defense.Put another way, going forward, President Trump would be “green lighting” projects that sped up the development and production of everything from steel to uranium, copper, cobalt, lithium, and more.
Indeed, just a few months ago, President Trump signed another executive order, this time:
To speed up construction projects, Trump plans to overhaul one of the nation’s most consequential environmental laws… would make it easier to build highways, pipelines, chemical plants and other projects that pose environmental risks… it would force agencies to complete even the most exhaustive environmental reviews within two years and restrict the extent to which they could consider a project’s full climate impact…
Source: The Washington Post
This is the single biggest development in the markets in decades. Entire industries that have been left for dead will begin to come back to life as TRILLIONS of dollars’ worth of capital begins to flow into these sectors.
If you’re looking for this kind of precise guidance on how to trade the markets, I strongly urge you to join our FREE daily e-letter, Gains Pains & Capital. You’ll immediately start receiving our market missives delivered to your inbox every morning.
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Best Regards
Graham Summers
Chief Market Strategist
Phoenix Capital Research
