Love him or hate him, Donald Trump’s presidency is undeniably a record breaker for at least trying to keep campaign promises. I remember Bill Clinton reversing himself on campaign promises before he even took office. So, it’s striking to me that Trump has even tried to:
- Cut taxes.
- Build his wall.
- Ban Muslims from entering the US.
- Repeal Obamacare.
- Deny funding to sanctuary cities.
- Ask other countries to pay more for NATO.
- De-fund Planned Parenthood.
- Re-negotiate or exit trade agreements like NAFTA.
I don’t want to get into a political debate regarding these ideas. My point is only that in an age when observant people have zero expectations that politicians will keep any campaign promises at all, Trump’s attempts to do what he said he would do really stand out.
This is important for resource investors.
There’s one major campaign promise Trump made which has been pushed to the back burner by other priorities that could have a strong impact on us if it gets done.
Donald Trump promised to spend over half a trillion dollars upgrading US infrastructure to make it the best in the world.
I don’t expect this issue to become Trump’s top priority right away. The trade war and the wall are clearly consuming his attention now. Plus, honestly, it’s going to be hard to ramp up government spending that much after cutting taxes without causing soaring deficits. That would put the US’ credit status at further risk. It could lead to very high inflation if the government decides to simply print all the money it needs to pay for the work.
That said, with the Democrats in the House, Trump isn’t going to get much help on anything else he wants—and Democrats do love spending.
It’s quite possible we may see a lot more of this infrastructure work get done during the remainder of Trump’s tenure.
And if we do, it should be quite a boost for commodities prices, even if economic growth weakens.
That’s a big “if,” I grant. But after the wall is settled and the trade war ends, I would not be at all surprised to see this issue pushed back up the priority ladder. When that happens, I’ll review my outlook for industrial commodities.
Until then, I remain very cautious about industrial minerals—even the ones that power the new energy paradigm I’m so keen on.
Caveat emptor,
