Issue #59, Volume #2
America’s Sovereignty Has Never Been Threatened By A Foreign Power
This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.
Next week, Porter will launch one of the most audacious investment projects of his decades-long career. What he says could potentially create more wealth for his readers than anything he’s ever done before. For more details about his million-dollar mission – and how you can be a part of it – click here.
Editor’s note: This morning I am en route to a family wedding with my wife in Nova Scotia, so I am taking a break from my usual essay today.
As we published about 30,000 words yesterday, I know you have plenty to read! Hopefully you all invested in our Asymmetry recommendations of Fannie Mae and Freddy Mac, so you have plenty to celebrate this weekend.
But, as you are enjoying things this weekend, I want to leave you with a thought about Memorial Day, which is on Monday.
This holiday was originally called Decoration Day. It started in the South, after the devastation of the Civil War. It was the day the South remembered the Provisional Army of the Confederate States of America. It was a day for decorating their graves.
Today, remembering the Confederacy is anathema because historians have turned the Civil War into a referendum on slavery. The reasons for the war, however, were far more complex. There were many places in the South without slaves. And many places in the Union with slaves.
The Civil War was fought because the States demanded that their sovereignty be recognized and respected.
The Civil War marked the beginning of the American Empire. It saw an end to freedom of speech, habeas corpus, sound money, and many other Constitutional protections.
Most importantly, it was the end to the core idea of America: that the legitimacy of government was founded on the consent of the people.
On Memorial Day, while most Americans celebrate the salvation of the Union, I remember the fundamental loss of liberty and the usurpation of States’ sovereignty. And slavery? Slavery was on the way out in any case, not because of a war, but because of the cotton gin and all other kinds of industrial innovations that were greatly increasing the productivity of labor. Slavery didn’t end all around the world at roughly the same time because of America’s Civil War. It ended because it was no longer economic.
What the Civil War did lead to was more wars of aggression and a vastly more powerful central government.
Since that first war of aggression, our troops have been sent to fight in dozens of nations – almost always for nonsensical reasons trumpeted in the press. Remember The Maine! – a ship its own commander said had been destroyed in an accident. The War To End All Wars! – that meant killing the same Germans that made up a considerable portion of the American population and that shared virtually all of our cultural norms. Stopping Communism! – don’t make me laugh. Communism stops itself just fine if you leave it alone.
I could go on. With the exception of our War For Independence and the related War Of 1812, America’s sovereignty has never been even remotely threatened by a foreign power. Today, the press and the government want you to believe that China seeks to harm us. How? By sending us cheap goods. Makes as much sense as Remember The Maine!
On this Memorial Day, I hope you will remember that, no matter what the press claims, wars are fought for the benefit of the state and to the detriment of the people.
I wish for peace. And for the rightful recognition of the sovereignty of all people.
– Porter
Three Things To Know Before We Go…
1. The trade war is back. After a couple weeks of relative calm, President Donald Trump is ramping up the tariff rhetoric again. In a Truth Social post this morning, the president said he plans to enact a 25%-plus tariff on Apple (AAPL) if the company doesn’t begin making its iPhones in the U.S. He followed that up by noting that the European Union (“EU”) has “been very difficult to deal with” in trade negotiations, and said he intends to enact a 50% tariff on all EU products manufactured outside the U.S. beginning on June 1. The major stock exchanges are down around 1% for the day following the news.
2. Trump tax bill set to unleash record deficits. The U.S. House of Representatives voted in favor of President Trump’s “Big Beautiful” tax bill yesterday, which now moves on to the Senate for passage. Despite Trump’s promises to cut government spending, the Congressional Budget Office estimates the bill would add roughly $500 billion to the already-bloated U.S. budget deficit. There’s no end in sight to Uncle Sam’s spending spree, which appears on track to reach $4 trillion in annual budget deficits over the coming decade.
3. The bond market recalibrates. U.S. debt to GDP is already at an unprecedented level (122%), and Trump’s proposed tax bill threatens to push it even higher. A default is becoming inevitable and the bond market is sniffing it out. For the first time since October 2021 – when inflation was running at 6.2% year-over-year – the spread between the U.S. five-year and 30-year Treasury yields has steepened to 1.0%, yet inflation sits at just 2.3% today. This signals that markets are now pricing in higher inflation and stronger growth – and demanding greater compensation to hold long-duration debt. With $8 trillion in Treasuries set to mature this year, the U.S. will need to roll this debt over at much higher interest rates. That’s a problem if the expected growth doesn’t materialize. The U.S. will be left with ballooning deficits and little fiscal flexibility if a recession hits.
And One More Thing… $1,000 For Every Newborn
One provision of the tax bill passed by the U.S. House would invest $1,000 in government funds for every baby born from January 1, 2025, to January 1, 2029. Once adults, the former newborns could use the taxable funds for college, a home, or other expenses, and in the meantime, adults can invest into these “Trump accounts” with after-tax dollars.
Tell me what you think: [email protected]
Mailbag
Earlier this week, Porter announced the launch of The Trading Club, to begin next week. There has been tremendous feedback about it, so we decided to share some reader emails below. To learn more about The Trading Club, please watch this video.
Porter and team –
Perfect timing for such a service as The Trading Club. I’ve been an avid follower of Porter, Steve, and Doc for decades and they have done well for me when I’m smart enough to listen to them. This more “real time” service with “real money” tied to it is definitely a first – you have to trade both directions today. The U.S. dollar in the currency markets is taking a huge hit, top companies are down for no real reason, and there is no “safe haven” except for gold.
I own all of the above and have been thinking that a much more active trade environment is needed today. I plan on using the same amount of money and trading right along with you on this challenge. Time to watch the VIX every day…..
Let’s go!
Greg S.”
I’m excited about your new initiative and am going to participate. Just re-juggling to be ready to jump in.
Jody N.”
Love this idea of The Trading Club. Looking forward to it.
Michael N.”
Good investing,
Porter & Co.
Stevenson, Maryland
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