Published January 27, 2017

Did Trump Just Start a War?

“I’m not going to pay for that f***ing wall.”

Vicente Fox, Mexico’s former president, delivered that message to Donald Trump last February.

At the time, Trump was still a presidential candidate with a lot of big ideas. One of those was to build a wall along the U.S.–Mexico border.

Trump claims that this would keep drugs and criminals out…that it would make America safer.

But Trump doesn’t think America should have to pay for the wall. Mexico should.

Now that Trump’s the president, it’s clear that he’s very serious about this. But Mexico still doesn’t want to play ball.

In fact, Fox doubled down on his stance yesterday via Twitter. This time, it was directed to Press Secretary Sean Spicer:

I've said this to [Donald Trump] and now I'll tell you: Mexico is not going to pay for that f***ing wall.

This might make for great entertainment. After all, who doesn’t love watching politicians go at each other’s throats?

But this border feud could soon have serious economic implications. It could even hit your wallet.

• You see, Mexico isn’t just our neighbor…

They’re our third-biggest trading partner after Canada and China.

Our relationship with Mexico has never been more important, either.

Twenty-three years ago, the United States and Mexico signed the North American Free Trade Agreement (NAFTA).

Since then, trade between the countries has skyrocketed. Today, about 15% of our exports end up directly south of the border. We receive more than 80% of their exports.

The deal seems like a win-win.

• But Trump thinks we’re getting screwed…

Yesterday, the president said our trade policy with Mexico “has been a one-sided deal from the beginning.”

This is why Trump wants to renegotiate NAFTA. It’s why he wants Mexico to pay for the wall.

Trump wrote on Twitter yesterday:

If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting.

Shortly after Trump issued his statement, Mexican President Enrique Peña Nieto canceled his trip to Washington.

The White House responded by saying it might slap a 20% “border tax” on all Mexican imports. The Trump administration says this border tax would “easily pay” for the wall, which could cost as much as $15 billion.

• To be clear, the border tax isn’t in place yet…

It’s still a bargaining chip.

You see, Trump is a master negotiator. He literally wrote the book on dealmaking.

In The Art of the Deal, Trump says he begins negotiations by “thinking big.” This can mean showing up with a big, possibly outrageous demand. You start from the highest level and work your way down until the other party is on your side of the negotiation table.

In short, Trump could just be driving a hard bargain. He’s got a lot of leverage in this case, too.

• Mexico needs the United States more than we need them…

Remember, they send us about 80% of their exports.

Mexico’s economy is up against the ropes, too.

Just last week, the International Monetary Fund (IMF) slashed its growth forecast for Mexico. It now expects Mexico's economy to grow just 1.7% this year. Last year, Mexico’s economy grew by 2.1%.

The peso, Mexico’s currency, has also lost 31% of its value over the past two years. That’s a huge move for a major currency. It’s now trading at an all-time low against the U.S. dollar.

• Mexico may soon have no choice but to pay Trump’s 20% border tax…

But that doesn’t mean everyday Americans won’t pay for the wall, too…

You see, a border tax wouldn’t just hurt Mexican companies. It would make everything we import from Mexico more expensive. That’s what import taxes do.

So you’ll probably never see a border tax on your pay stub. But you could end up paying for it at the grocery store. Or the next time you buy a new car.

• A border tax could also put a lot of Americans out of work…

According to CNNMoney, about 6 million U.S. jobs depend on trade with Mexico. That’s because “about 40% of the parts in a typical Mexican import” originated in the United States.

In other words, a border tax could hurt U.S. companies and workers as well as Mexico. But that’s not the only way Trump’s “America First” policies could backfire.

According to Business Insider, “Trump wants to eventually extend the 20% import tax to all countries, not just Mexico.”

If Trump does this, you can bet other countries will retaliate with their own border taxes and tariffs.

This would cause prices on everything from food to electronics to skyrocket. Global trade could come to a standstill. We could eventually find ourselves in a global trade war.

Thankfully, we’re still a long way from that. But we can’t rule it out, either.

We’ll be sure to follow this story as it develops. We’ll also show you how to protect yourself and profit during these unpredictable times.


Justin Spittler
Delray Beach, Florida
January 27, 2017

Fedcoin: The U.S. Will Issue E-Currency That You Will Use

Editor’s note: Instead of our usual Chart of the Day, we have something special to share with you today.

The article below is from In it, author Wendy McElroy discusses one of Casey Research founder Doug Casey’s most radical theories…the idea that the U.S. government is secretly developing a new digital currency. Doug calls this new currency “Fedcoin.” You can learn more about it by reading the essay below.

By Wendy McElroy

The U.S. Federal Reserve will not only issue its own cryptocurrency but will also make sure Americans use it. That’s the prediction of currency guru Doug Casey who has an uncanny record of being correct about economic and political trends. His latest book, Surviving Fedcoin: How to Protect Yourself (and Profit) from America’s Coming Currency Change, is a public bet that the U.S. government will issue its own bitcoin which Casey views as “the last arrow” in its money quiver.

How will the dynamic play out? He speculates,

To start with, I suspect it’s going to be a parallel currency. Perhaps usable just within the U.S. which, in effect, would be a form of foreign exchange controls even more effective than the inability of Americans to open up foreign bank and brokerage accounts today [due to monetary control through FATCA]…I think it’s a near certainty that they’re going to do something like this and soon.

[To read the rest of this article, click here…]

Editor's note: You can also learn more about “Fedcoin” by watching this brand-new interview with Doug. As Doug explains, this secret project could be the worst thing to happen to the U.S. dollar since the end of the gold standard.