In today’s Issue:

  • How did you invest before 1997?
  • Loose monetary policy doesn’t float all boats
  • Become the next Inflation King

President Trump wants to engineer a new stock market boom. He’s trying to seize control of the Federal Reserve to do it.

Unconscionably loose monetary would goose stocks even higher. And Trump is an expert at anything unconscionable.

I’m calling the coming stock market boom “The Nuremberg Rally” for a peculiar reason I explained on Thursday.

On Friday we looked into the evidence that Trump really is staging a coup at the Federal Reserve.

Today, we ask how investors should prepare themselves for what’s about to play out…

A familiar bull market

We know what financial markets look like when politicians control central banks. Heck, you probably know better than me if you were around to experience it a few decades ago.

The Bank of England has only been independent since 1997. Before that, politicians set monetary policy.

What was it like for investors? Which strategies worked?

Let me know: nickolai@southbankresearch.com

I was born in 1989 in Germany, under the Teutonic tutelage of the Bundesbank. It had a reputation for punching politicians on the nose if they even implied looser monetary policy might be a good idea.

Even the reunification of Germany wasn’t deemed a sufficient excuse to cut rates. The East Germans had to be taught a lesson in tight monetary policy.

No German central banker ever wanted to explain that he unleashed inflation at the request of politicians. “Just following orders” is considered an especially poor excuse in Germany. They call it the Nuremberg Defence. And it was unleashing inflation that gave us the Nazis in the first place.

But the Americans didn’t learn the same lessons. And so Trump trying to seize control of the Fed to inflate a new stock market bubble sounds just fine to them. Each time Trump gets more control of the Fed, markets rally.

But the process has barely begun. The boom has legs.

So, how do you position yourself to profit?

The first thing to understand is that this will end in tears. Just as the 2007 bubble eventually popped.

When it does, the American central bankers that created the bubble with loose monetary policy will claim they were “only following orders” from President Trump. Hence the name “Nuremberg Rally” for the bull market.

But these booms tend to last a long time. The Fed can cut rates a long way yet. And so, before the crash, vast amounts of money can be made…

How to profit from loose monetary policy

From my reading of history, there is an obvious way to profit from the latest attempt of a politician to control a central bank. We know how things will play out. It’s been done so many times before.

The most important thing is to invest in real assets. Things you can touch. They’re usually heavy.

That’s what the master of inflationary investing did 100 years ago. He was German too…

Hugo Stinnes faced hyperinflation, an energy crisis, World War I, Germany’s impossible debt levels and of course the Spanish Flu pandemic. Basically everything we face today, just an order of magnitude worse for each one.

Understanding what was to come of the mad Weimar monetary policies, Stinnes borrowed heavily in Papiermark – literally the “paper money” of Germany at the time. And he used the proceeds to buy up mines and other capital-intensive real assets like shipping, forests and steelworks.

Notice these were largely tangible assets – real stuff – paid for in printable money that can have as many zeros as politicians fancy.

Stinnes’ business empire rapidly expanded under the load of debt. In fact, he even became a banker just to leverage up his own businesses even more.

He became Germany’s largest employer in the process – about 1% of the entire German population worked for him. And he was a key figure of the political scene too. In a really, really bad way you can probably guess at.

By the time Stinnes was finished, they called him the “Inflation King”. Time Magazine called him “New Emperor of Germany”. He was the wealthiest man in Germany.

Care to become an inflation king yourself? Here’s how you can do it…

Until next time,


Nick Hubble
Editor at Large

P.S. Trump’s Fed coup could inflate the biggest bubble in decades — I call it the Nuremberg Rally. The smartest way to play it? A real-asset move I revealed in my AI Master Key briefing. It’s not a stock or ETF… and it could surge from 17 September. You can still watch it now.