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I believe that there's obviously this general distrust of the data. I would like to have seen what would happen in the counterfactual if those numbers were revised higher. Let's say that the data were revised up 250,000, which again would be an eye-opener and could lead you to believe what is going on with the BLS. Would the BLS commissioner have been fired if it was a plus sign instead of a minus sign? 'Cause that's also, you would think, pretty egregious luck.
The president, he's got the power to push through these tariff increases. You know, all these announcements of $550 billion of investment here and $650 billion of investment there. I mean, they're just numbers. I mean, these countries are willing to say anything just so that they don't get hit with a 50% tariff. But those numbers have no meaning. Those investment inflow numbers have no meaning. They're probably not going to happen because it's not these countries. These countries are not going to print money or tax their population to then throw it into facilities in the United States. It'll be companies that do that. And these countries' governments are not going to be forcing their companies to be investing in the United States. That's a private sector matter. So you see, it's all basically camouflage and a ruse.
And companies, if they feel that there is going to be a tariff wall for an extended period of time, maybe they'll be incentivized to bring that money over. However, when you think about the gestation period and how long you have to capitalize a capital spending project over 10 years, if you think that this is going to be like McKinley, you know, that's what's very interesting is that Donald Trump, like the McKinley tariffs, they're only around for a few years. So, I don't think there's going to be these big investment inflows. I think what's likely to happen, what you're seeing already, is a diversion of trade to the rest of the world.
It's 100% true that the rest of the world loves the US consumer base. They love the wealth of the United States. Tap that. They love the low savings rate, the consumerism. But you're already starting to see, and you can see it in the export-import numbers, that there's a diversion of trade between other partners in the rest of the world. And so that's taking place. So I'm trying to make sense of it. You know, I try my best not to be political. I wrote a report last year before the election where we itemized meticulously all the economic platforms in the Trump campaign and the Harris campaign. And look, we said this is a no-brainer. The Trump plan is so far superior. And it doesn't matter. You're just walking on eggshells no matter what you do.
But politics and economics and finance, they all mix together. Okay? You can't say politics and finance don't mix together when you have the president now allowing, you know, private equity and crypto and the 401(k) plans. They're all enmeshed. I get told all the time, "Don't get political." But, you know, I don't necessarily have a political bias. I'm questioning his policies. I think probably his best policy out of the whole fiscal thing, like no taxes on tips. I mean, come on. What's next? Like free root beer in the water fountains? I mean, how does that boost productivity? That's an election gimmick. However, the depreciation allowances on capex. That's meaty. I can get into that. To promote capital spending from within, increase the supply side of the economy. You see, but the thing is that why would you then move one foot forward and then one foot back? Because the way the tariff and trade policy is being implemented, it's injected so much uncertainty that companies don't know the sort of environment on the trade and tariff side.
You know, people say, "Well, the United States only imports 11% of GDP." That's not a small number in a $30 trillion economy. It's over $3 trillion. Nobody knows what the tariff rates are going to be with which country, who's going to be carved out, who's not going to be carved out, the whole piecemeal fashion and all the reprieves and then non-reprieves. And then you don't know what's coming next. You can't plan. So you could have all the depreciation allowances in the world, which is a great idea, and then you just basically douse it with cold water by injecting all this policy uncertainty.
But you see, the thing is that we have to recognize is that this is not just about economics. Donald Trump since the mid-80s has been a massive advocate for tariffs. He believes that the rest of the world is ripping off the United States and that nobody should be running trade surpluses with the United States. And the trade surplus is just a number. It's neither good nor bad. I went back decades and decades and found that the US economy operates the same. The level of economic growth is the same when we run trade deficits as when we run trade surpluses. Because you run a trade deficit, you run a capital account surplus. You run a trade surplus, you run a capital account deficit. It's just how the balance of payments operates. It's neither good nor bad. And that's what's always caused me a little bit of problems. And especially with this team of mercantilists and protectionists. Now they call it, well, we used to be free traders in the Republican party. Now we're fair traders. Well, I could see in some cases in Europe, you can see in some cases in Japan, you could see obviously China's a big culprit. But it's really quite isolated and these are just blanket tariffs.
I think people generally speaking, Xi Jinping aside, are scared of the president and I do believe there are a lot of Americans who like that a lot. I mean, look at what happened with Elon Musk as an example. Look how Zelensky got impaled. Now, Zelensky at that uncomfortable few minutes in the Oval Office, he really walked into his own grave. But those were pretty horrible few minutes. Now, the CEO of Intel is being pressured. He fires the BLS commissioner and the only reason he hasn't fired Powell is because the Supreme Court or Trump's lawyers, the White House lawyers said that the Supreme Court will overrule him or else Powell would have been fired by now. And then he takes Powell on this construction site which has cost overruns. Just for what purpose really? You think the president of the United States has better things to do than to go visit the construction site of the Federal Reserve building with Powell with, really in my opinion, and not everybody would agree, to just embarrass him and humiliate him. So that's the state of affairs that we're in.
The only thing I would disagree with is that I did believe that the election was fought over border, immigration, cost of living, trading tariffs. When you look at the voter concern list on any poll, tariffs and trade were ranked 10th. And we all knew how we felt about tariffs. Tariffs are not going to bring inflation down unless they generate the conditions for a contraction in aggregate demand. And then you'll get deflation for the wrong reasons because you campaigned on prosperity and lower inflation. I really thought we're going to get a similar version of Trump 1.0 on the trade.
So, you'd asked me at the beginning about, you know, that I'm Canadian. I'm just looking at this actually from a global but also a US perspective, right? Like I said, 70% of my clients who are in the US, this is going to be a big ding. If it's not a big ding to you in the pocketbook, it's going to be a big ding to your employer because somebody is going to bear the cost of this. And then just when I hear about the revenues being piled in and people say, "Well, look Dave, this is going to help pay down the deficit." Well, there's other ways to do it because you want to cut taxes, but you're raising taxes. But you see, they won't call it a tax, right? And then actually, I heard I think it was Bessant yet again, who is the resident superstar in the cabinet comparing all this to the VAT that American companies pay the VAT in Europe. That's got nothing to do with anything about the VAT, which is just a sales tax. This is a tariff. And who sends the check to the government is the importer of notice. The US importer of notice is paying that check. And then who's going to pay for it down the line? That's the issue. And it's a no-win situation because we get the inflation. That's going to be bad news for the markets. It's going to be bad news for the Fed 'cause we're going to get the inflation. But let's say we don't get the inflation. Somebody along the production line is seeing their margins get squeezed. What does that do? You get your margins squeezed, you got to cut expenses, which means labor, which means unemployment rate goes up. So, this is a no-win situation.
Everything else being couched that this is going to bring in billions and billions of investment money in the United States is camouflage. It's a ruse. And the reason I say that is because a lot of businesses around the world that might look at this tariff wall as being attractive to jump over. I think a lot of them don't believe it's going to be here permanently. So I think they're just going to stay the course. And what's going to happen in between is to avert the tariffs is that the rest of the world, look what's happening in Germany right now. Germany is raising spending. You're going to find other countries cutting taxes. Look at what did Mark Carney do right away? He cut personal taxes. Other countries maybe what they got to do. We didn't always call America "consumeric America." Okay. I think that started with the advent of proliferation of credit cards back in the 1980s. "Consumeric America." I think other countries, including Canada, may want to develop their own consumer base to draw off of. And then you're going to find what comes out of this and the law of unintended consequences is that other countries will form other trading relationships over time. And that's when there's really no turning back from this.
But the notion that, you know, we don't even know how the Supreme Court is going to rule and that's going to be later this year. Why would any company start sending in money knowing that the Supreme Court can rule out all these tariffs to begin with? Why would you commit any capital? So, it's going to be some tough going ahead and it's going to be interesting to see how the Fed reacts, especially now that you have two to three rate cuts already priced in between now and the end of the year.
Yeah. And you know, that's a great question because I'm viewed as being bearish, but because everybody is fixated on the S&P 500, which is in the top 5% valuations of all time and it is the most concentrated stock market of all time. And it's hard to know. AI is real. The spending craze is ongoing and it could last, as we saw with the internet in the mid to late 90s. It could last longer. These speculative bubbles can last quite a long time. And then you don't know. You have so much priced in. Maybe it happens, maybe it doesn't. But the stock market, because of the concentration in growth, and growth by definition, growth is not real-time. Value is real-time. Growth are long-duration stocks. The S&P 500 has become an incredibly long-duration asset, which means there's a lot of assumptions behind whether those lofty future earnings estimates from the AI craze are going to play out or not. And I'll keep an open mind. But I like to invest with, look, there's no such thing as a sure thing, but I like to play the odds. And I like to invest where I see more tailwinds than headwinds. As far as the index is concerned, the S&P 500, it's too expensive. It's just too concentrated for my liking.
So in the Rosie Macro Fund, so we have a model portfolio which actually covers FX and it covers commodities and it covers currencies and it covers equities. So fixed income, equities, currencies, commodities. What am I bullish on? Because I'm actually bullish. I'm just not bullish on what everybody else is bullish on. But that's because I naturally have a contrarian streak and I don't ever operate with a herd mentality. But you know, for years we were bullish on Japan and that worked great. And then we pivoted towards the Asian benchmark. So we still, you could say, still have Japan, but we like Asia. When we saw the tectonic shifts happening in Europe on fiscal policy, we went bullish on Europe, naked long with the Euro exposure. That worked out great. And we are bullish in terms of sectors. Like it's not as if I'm bearish on everything. We've been bullish on utilities. We've been bullish on the gold and silver miners and we've been bullish on aerospace defense. They've worked out great. And then of course we have gold and we have silver. We have uranium. We took a long position on the ridiculously cheap Japanese yen. That could give you 20% return right there. People don't think that currencies can make you an equity-like return. You can't do that in the equity market.
Now, I don't know where Bitcoin is going to be going or how you treat Bitcoin. It could go to 5,000. It could go to 500,000. I don't know. It's like the NASDAQ 100 on steroids. But I look at the chart of the Japanese yen and I look at every valuation metric and I think that this one trade. In fact, we would probably right now go long yen, short euro. If we're right on that, that's 30% right there without taking equity risk. Uh, so we're always looking for opportunities. And there's a few sectors that we like, not a lot in the US. That much is true. We still like the Treasury market as a balance in the portfolio because we do believe although it could be delayed, we're not sure, but we think that the economy is going to weaken precipitously. We do believe that inflation is going to come down. And that's more because the service sector side is going to disinflate faster than the tariff effect on goods. We don't think you'll make a killing in bonds. But I don't ever buy bonds to make a killing. I buy it as a diversifier in the portfolio to limit the downside risks from the other parts of the portfolio that have a higher beta. It is a stabilizer and a balance. No, no different than my own gold, except for the fact that at least Treasuries pay you some modicum of a coupon. And that's basically the story. That's what I'm bullish on. The perma-bear probably has six or seven great ideas from the long side for you. [Music]