Fidel Castro is dead.
On Friday, the longtime Cuban politician and revolutionary passed away. He was 90 years old.
Castro spent more than half his life governing Cuba. He was one of the world’s most well-known leaders of our time, and one of the most polarizing.
Some considered him a freedom fighter. Others saw him as a brutal dictator.
Castro was also a fierce critic of the United States. He butted heads with 10 U.S. presidents during his lifetime. And while he officially retired in 2008, he told Cubans to not trust Americans up until his last breath.
Thanks to Castro, relations between the U.S. and Cuba have been tense, to say the least. In fact, the U.S. has had a trade embargo against Cuba since 1962. For one, the U.S. government put the embargo in place during the Cold War. At the time, Cuba was an ally to communist Russia and was stationing Soviet missiles on its soil.
And while the Cold War ended 25 years ago, the embargo still restricts Cuba from trading with the U.S. It prohibits Americans from directly investing in Cuba. Americans also still need permission to visit Cuba.
That said, relations between Cuba and the U.S. have improved recently…
• Last year, the U.S. and Cuba reopened embassies in each other’s capitals…
Then, Obama flew to Havana, Cuba, this past March. He became the first president to visit Cuba since 1928.
The White House also recently lifted its 50-year tourism ban on Cuba. And Cuba’s government plans to scrap a 10% tax on converting U.S. dollars to Cuban pesos.
A few months ago, the U.S. Department of the Treasury gave two major U.S. hospitality companies permission to operate in Cuba. Starwood Hotels & Resorts (HOT) will build three hotels in Cuba. It will be the first U.S. company to operate a hotel in Cuba since 1962.
Many people now think the U.S. could soon lift its 54-year trade embargo on Cuba.
• Casey Research founder Doug Casey thinks Cuba’s economy could thrive if this happens…
Doug wrote last year:
In reality, the embargo has just been a silly, destructive, and massively inconvenient public relations scheme. The Cubans have been at liberty to buy anything in the world they wanted over the last 55 years, including American products, as long as they didn’t buy from an American. They lacked goods not because of the U.S. embargo, but because they simply didn’t have the money to buy from anyone.
But the cat’s out of the bag and the embargo is soon going to be history. And I expect growth to be hyperbolic.
• Major U.S. companies are lining up to profit from Cuba’s untapped potential…
CNNMoney reported over the weekend:
Scheduled U.S. air links to Cuba have been growing rapidly. On Tuesday, United Airlines (UAL) starts flying to the island and on Thursday, Delta (DAL) Air Lines will begin commercial flights from the U.S. to Cuba for the first time in 55 years.
Jetblue Airways (JBLU), American Airlines (AAL), Southwest Airlines (LUV) and smaller carrier Silver Airways began regular flights to Cuba earlier this year and plan to expand their offerings in the coming weeks.
Frontier Airlines and Spirit Airlines will take off in December and Alaska Airlines (ALK) in January. The U.S. Transportation Department has also approved Minnesota-based Sun Country Airlines for flights.
Crisis Investing editor Nick Giambruno says money will pour into Cuba as its economy opens up. And that means savvy investors could make big money in the coming years.
Nick wrote earlier this year:
Cuba has over 2,000 miles of pristine coastline and the potential to be a top tourist destination. If Cuba ever opens up, there’s potential to make a fortune.
Nick’s so convinced of this that he told his readers about a “Cuban” investment in February. But he didn’t recommend a Cuban company. (Remember, it’s illegal for Americans to invest directly in Cuba.)
Instead, he told his readers about a “backdoor” way to profit from the reopening of Cuba. This investment is 100% legal. And it’s as easy to buy as any major U.S. stock.
• Today, Nick’s Cuba investment spiked 9% on the news of Castro’s death…
But Nick says even bigger gains are to come:
With Castro's death, I believe it's just a matter of time before American tourism to Cuba will explode. The International Monetary Fund estimates there could be up to 10 million visits from Americans every year. Currently, there are only 61,000 total hotel rooms to accommodate tourists, according to the Cuban ministry of tourism.
In other words, Cuba’s current hotel capacity can accommodate only a tiny fraction of the American tourists expected to visit the country.
There’s just one thing…
Obama’s days in the Oval Office are numbered. And President-elect Donald Trump has been highly critical of the current trade deal with Cuba. Reuters reported over the weekend:
Late in his election campaign, Trump sought to reassure Cuban-American voters in Florida that he was firm in his opposition to the Castros, and pledged that, if elected, he would close down the newly re-opened U.S. embassy in Havana.
Earlier on, in the primary contests to pick the Republican presidential nominee, Trump said he thought restoring diplomatic ties with Cuba was fine, but that Obama ought to have cut a better deal.
Just this morning, Trump wrote, “If Cuba is unwilling to make a better deal for the Cuban people, the Cuban/American people and the U.S. as a whole, I will terminate [the] deal.”
According to Trump, the current deal is great for Cuba, but the U.S. has “got nothing in return.”
• Naturally, some investors think Trump could make it harder to profit from the reopening of Cuba…
But you have to remember something. Trump’s a dealmaker.
His hard-line stance could just be the starting point for a new negotiation. After all, he’s already shown since the election that he’s willing to compromise on a number of key issues, including Obamacare.
Nick also doesn't think Trump will “terminate” the deal:
I'd be very surprised if Trump really would scuttle the rapprochement completely. The opportunities for American companies are just too great.
Also, the election wasn’t even three weeks ago, and the very anti-Castro Cuban exiles in FL were critical for Trump winning the state. I don't think he wants to upset them.
Investors also don’t seem worried about Trump’s stance on Cuba. For one, Nick’s Cuba investment is up 12% since Election Day when you factor in today’s 9% spike.
But this could be just the beginning. According to Nick, Crisis Investing readers could see “explosive” gains as Cuba’s economy opens back up.
• You can get in on Nick’s Cuba investment today by signing up for Crisis Investing…
You’ll also learn how to profit from the collapse of the world’s biggest economy…how to potentially make 1,000% or more in one of the world’s most beaten-down markets…and even how to make big gains in the second coming of the American shale revolution.
Chart of the Day
The U.S. dollar just hit a 13-year high.
Today’s chart shows the performance of the U.S. Dollar Index. This index tracks the dollar’s performance against major currencies like the euro and Japanese yen.
You can see that the U.S. dollar has “broken out” in a big way. Two weeks ago, it hit its highest mark since 2003.
This is a very bullish sign. It tells us the U.S. dollar will keep getting stronger. And that would impact financial assets around the world.
You see, the U.S. dollar is the world’s reserve currency. When it makes big moves, everything from bonds to commodities fluctuates. It also has a huge impact on stocks. Last week, the Financial Times explained how the strengthening dollar is impacting different stocks:
Industries that are considered safer and nearly “bond-like”, such as real estate trusts and utilities, were hit hard on Wednesday. Financial stocks, which benefit from rising interest rates, and smaller companies, that are shielded from the impact of a stronger dollar, rose to fresh records.
This is one of the biggest stories in the investing world right now. Over the next few days, we’ll explain what the stronger dollar could mean for your money.
Delray Beach, Florida
November 28, 2016
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