2323: Trump's Machiavellian Playbook: Impact on Global Economy & Your Investments with Paul Marino

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So far the event's been fantastic. Lots of great speakers, so many good contacts. Just the amount of different people you see here and meet here is probably the biggest benefit. And the speakers are unbelievable. And it's jam packed with content. Basically can't miss a speaker. If you're on the fence at all about this, if you're even considering it, just jump on, do it. You won't regret it. You're going to be able to close those time windows that you think take forever. Just do it. It'll be a great experience for you as an investor and you're going to be able to learn just through osmosis, through all these great people you're around.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants, and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your financial Independence Day. You really can do it. And now here's your host, Jason Hartman, with the complete solution for real estate investors.

Prior to 1913, the American people had direct veto power against spending policies of the federal government. Because in order for the federal government to borrow any money, it had to go to the people. There was no central bank it could go to, it had to sell bonds. If you didn't want to go to war, you didn't buy the bonds. If you didn't want this pork project that the government had in mind, you didn't buy the bonds. It was a very simple, simple system, a republican system, whereby you had veto power, economic veto power, and it worked very well until 1913. That's how come government managed to stay small, because it didn't have an unlimited credit line to go on a shopping spree for 80 years and make you pay for it. So in 1913, there was this convenient new arrangement made the Federal Reserve act created an unlimited credit line for the federal United States government to borrow directly from the Federal Reserve bank and obligated the American people to pay it back, completely bypassing what was our veto power and they no longer had to come to us directly to ask permission to fund something.

Greetings empowered investors. I am in Denver. I'm at a Joe Dispenza week long retreat this week. And if you think my conferences are expensive, you ain't seen nothing yet. Anyway, if you can guess where I am, I'll give you a prize. What should the prize be? I don't know. Anyway, we have a great show for you today. It's episode 2323 and we are going to be talking about some very important topics as relates to the economy, the markets, the real estate market. And by the way, we have one market in the United States that is right. It's just flirting with crash levels. Yes, it is. One market in the U.S. really? I don't know, two markets, one's in Florida, the other is in Texas. And wow, those doomers. They're certainly wrong nationally because we've got about 3% appreciation in the last 12 months. But these two markets are flirting with crash sales status. Now it's important to define crash status, right? Well, lots of opinions on that of course, but I would say that is about 25% reduction in prices. That would definitely be considered a crash. And these aren't there yet, but they're getting close. So we'll see what happens. We'll see if Powell gets his wits about him. We'll see if Trump puts enough pressure on Powell or if Powell gets replaced or who knows what the heck. But we'll back come continue to follow that story. Of course. Anyway, I always want to remind you register for our upcoming masterclass Jason hartman.com Wednesday we have been getting some fantastic reviews on these master classes. Thanks to all of you who joined us for them. Jasonartman.com Wednesday 2nd Wednesday of every month it is my pleasure to welcome Paul Marino. He is the chief revenue officer of themes ETFs and we are going to talk about the broader global and national economy and some different investment themes as well. So looking forward to diving into this. Paul, welcome.

Oh thanks for having me, Jason. It's a pleasure to be with you.

For those who are not watching on video you have a slide which is Trump looking at Machiavelli and you call him the modern Machiavelli, which I wouldn't disagree with even though I'm in favor of the stuff he's doing. So tell us what you're meaning by that.

Yeah, I agree with you. I'm in favor with a lot of stuff that he's doing too. And I don't think it was meant as a dig. You know, there's a couple of different ways that you could look at Machiavelli, and very similar to Trump, he was a polarizing figure. There's so many people that look back in history and read the Prince and they've gleamed a lot of great information that they could use in modern day politics. And there are other critics who say that he could have been brutal. And I think if you look at Trump, it's kind of like the same way. But when you think about what the sort of philosophy of Machiavelli's the Prince was, it was use any means necessary to achieve political goals. Most of them were unconventional, and that the ends justify the means. And we wrote a newsletter a few weeks back, actually a few months back now, comparing Trump to Machiavelli, because he's very much the same way. Number one, he's a master negotiator, and he loves to use leverage right now more than any business he's ever had. He's got the United States consumer as his leverage point. And that puts him in a very powerful negotiating position in the world, and he intends to use that to the best of his ability. He also understands the media very well. And we are in, you know, a new paradigm when it comes to not just traditional media, but social media. And he's been a master at, you know, whether you, again, agree with his tactics or his methods at using formerly Twitter, Truth Social and now X to be very provocative and get his sort of negotiating stance out into the worldview. And he does that incredibly effectively. And then last but not least, he's kind of like a showman. I don't think it's a coincidence that One of the McMahons is in his cabinet, Linda McMahon, a wife of Vince McMahon, who is the ultimate showman. And so when Trump presents, he. He presents boldly. He captures the attention of those around him and people who are interested. And then he sets his end point right from the very beginning, and then he sort of executes towards that through all of the various channels that we just talked to. So it's different than, than other presidents, it's different than other world leaders. But, you know, he's, he's very effective in changing the way that partners, you know, both allies and enemies are forced to deal with with the United States.

So what does that mean to us as investors?

Well, it means that we're going to disrupt traditional alliances. And so you saw that when he, you know, first got into office, he went after Mexico and Canada, Colombia. Yeah, the Two closest neighbors that we have. And I don't think they were expecting it. In fact, at the entity, we have a partner that we work with in Toronto. And it became an ongoing starter conversation for all our meetings because they're like, why are you doing this to us? And I was like, we're not sure why, but we're sure that there's an end goal. So he disrupts the cooperative partners that he has immediately and he resets the tone. I think the biggest part of this was, you know, he wanted to really reset with China, but he wanted to make sure that it wasn't just a targeted thing against China, that we were looking at everybody and creating a new fair trading platform globally and. But also he wants to return supply chains and manufacturing to the US And I think that's a core piece of what he's talked about even long before he became president. And I don't think these are bad things, by the way, Jason. I think that they're all good things.

Oh, I think that, yeah, I just.

Think it created this tremendous disruption. You know, he put all of our partners on alert. Now you said, how does that actually affect the economy? Well, the economy doesn't love uncertainty. And so. And markets specifically don't like uncertainty. So, you know, everything was in disruption. That goes back to the showman that I was talking about and sort of like that WWE reference. You know, he likes to cause commotion, but he always has a plan underneath. And I think the administration has a pretty effective and powerful plan. So the noise really distracts everybody. Right? Investors were triggered by it. We saw this sell off, you know, at the end of February into March, everybody was nervous. There was talks about recession, potential depression, stagflation, inflation. And all the while I kept saying to people, just relax. Nothing has materially changed in the economy. I'll give you one specific example with artificial intelligence. Artificial intelligence just fell off a cliff because they were talking about all the uncertainty. Chinese AI innovation, Deep Seek was going to take over the world. And all of a sudden everybody was going to think of China as a reliable partner. But I kept saying, you know what, Calm down a little bit. Nothing has changed materially. I kept looking at the hyperscalers that were investing in AI and whether or not they were making changes to their investment allocations. And none of them were. In fact, they were all adding to it. So what it did was, in my opinion, it caused opportunity for investors, even if they were nervous, to get in at lower prices. That's just one place that they could. And then the Other thing that it did is it opened up or it revealed the potential in other places that had been stagnant for quite a while. Things like gold and you know, defense companies that were sort of stuck in the mud. It really opened up opportunities there because geopolitically things just started to change. Course that created the uncertainty and in my opinion it created the, the volatility. One other thing I'd add to that is we are in different times when it comes to the markets. You're seeing a higher percentage of retail investors playing a role in the markets and that causes a lot more volatility in my opinion. Volatility again, if you are convinced, if you have high conviction in what you are investing in and you're doing your homework and you're looking at the numbers, volatility should be your friend.

So question for you on that. Yeah, we'll get to the volatility thing in a minute. That's interesting. But are you saying that the role of retail investors is now higher and the role of institutional investors is lower?

No, I wouldn't say that it's lower. I think institutional investors are remaining in the game and that's growing. It always grows. But retail investors are back in, in a very serious way. And what we're seeing is that retail investors have the ability to sort of create or amplify some of that volatility to follow trends.

Is that because retail investors are more emot and you know, they have less money to work with so they, they tend to react, be more reactive, less.

Money to work with, more emotional and more opportunistic. I mean they're in it to capture trades. I mean, when you think about professional investors, professional investors have to take into a lot of things into consideration, including tax consequences and what that means for their clients if they were to sell out of a position really quickly. So they tend to make longer term investments. Retail investor, you know, if they get the return profile that they're looking for and they think there's reason to be concerned, they'll get out. But you know, like I said, so we, we didn't think anything materially changed. There was a lot of uncertainty.

But your thesis there is volatility creates opportunity. It sounds like.

Yeah, we were telling people things and again, we're not individual investors. We have funds, but we do represent some individual names in some of our leverage single stocks. So we get asked about this a lot and I would say to people, look, if you liked a stock like Nvidia when it was trading at all time highs, you Know, you have to love it now because nothing has materially changed in its business and you know that gets proven outright because of effective management. And so even though they had to take a write down in their last quarterly earnings of 4.5 billion in China, they were able to repurpose that inventory somewhere else. So the really good companies that have great demand for high quality products will always be able to adapt and as long as the investment continues to be there, the capex spending, we believe that opportunity was only enhanced when market volatility drove prices down.

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I think there are places that you could selectively get into. The US economy is definitely still Very, very strong. And I think there was a study that released by, I think it was the Atlanta Fed last week that said GDP was tracking close to 4%. So technically you're not going to get a recession, a technical recession of 2/4 with negative GDP. So not really thinking about that. I think companies are very strong. I think they have strong balance sheets, I think they're willing to invest. I think we have technological revolution that's happening with AI, not just generative AI, but now agentic AI, robotic AI. So there's so many sectors that give us the ability to grow out of our problems. But I would say the things that scare me more are not tariffs and things like that. I think the thing that scares me more for the future is our ever growing debt and our ability to service that debt.

And you know, I agree that the debt is an issue, but you know, compared to what, like when you look at Trump's big beautiful bill, just hilarious. Country really can handle more debt pretty effectively if it is in investment. You know, I mean, you go back to Reagan, right, and you know, he destroyed the Soviet Union and piled up a lot of debt doing that. I consider that to be an investment, okay, as long as it's not spent on wasteful welfare programs and so forth. You know, I use debt and I make a lot of money with debt. I, I love debt. I always say it's my favorite four letter word. But that's investment grade debt. It's not consumer debt, obviously. Right. Welfare spending and things like that. Wasteful spending without doge looking things over is consumer debt. Right. Versus invest.

You use debt to make money. Corporations use debt to make money. The unfortunate thing about governments is they really don't ever make money. Like you never. And they never pay off their debt.

The way their version of making money is grow the economy. Right, right. Yeah.

But I think, you know, like I said, the thing that worries me about the debt is that there's no end to it and that we can't get out of deficit spending. And now our deficits, they're not in the billions anymore. They're not in the tens of billions, they're not in the, they're in the trillions of dollars. And I, I don't even think people can actually understand what a trillion dollars.

I, I know, I know. And we've all seen those graphics illustrating trillion is. Yeah, okay, but you know, people were freaking out about debt when it was in, in the hundreds of millions and then the billions. You know, if you look at, I always say, compared to what you know, you look at history, right, and you look back on these articles of all of the prognosticators and the experts of the time, the economists of the time, freaking out, oh my God, we're running a 700 million dollar deficit. You know, that's like chicken feed nowadays. Right? But of course that's compared to the GDP at the time, to be fair.

Well, it's also, it's also based on the fact that the US Is the world's currency.

Right.

And, and can get away with different dollars and we can get, we can get away with that.

Right.

And I think that there was some trepidation around the fact that there are many, many countries around the world that don't want that to happen into the future. And I think this administration is very much on top of that. I think that, that, that's top of mind for them. And I don't see that as a, as a concern today. But I would also bring up something else that we, that, you know, but.

I do, I do think that's going to lead to, oddly, at least in the short term, a lot of pressure to lower interest rates. You know, Trump is pressuring Powell like crazy.

He's pressuring him. I don't think it's going to affect Powell at all. I don't think Powell wakes up in the morning thinking about that. And I think.

He'S just doing it despite Trump, I mean, because they don't like each other. Right. But he needs to lower rates. I mean, the inflation problem just isn't that significant now.

The inflation problem is not as significant anymore. Although the interesting thing with inflation is once it hits, wages do not go up at the same rate. It lingers for a long period of time. Those people that can't overcome inflation, we live in a sort of a bubble. We're sort of insulated with the people that we work with and, and the amount of money that they make. But like, you know, there's a large percentage of the country that's struggling based on higher inflation.

I completely agree.

And if you lower rates, what you worry about, and you know, the one thing that I have a concern about with this administration and the fact that there's a desire to lower rates is, don't forget where Trump's background is, it's in real estate.

Right? Yeah.

That's going to benefit real estate tremendously in a time where housing is so unaffordable for the next generation. And you know, I know people that are doing really well, that are 30 years old, that are telling me it's hard for them to think about buying a house. It's hard for them to think about having children. And they're waiting for some kind of inheritance so they could fix that. You know, like, that's not the answer.

It's almost the massive wealth transfer from boomers to millennials is coming.

I just hope these kids have been good to their parents.

It's not going to take longer than 15 years, I'll tell you that. So, yeah.

So, and then the other thing that you have to look at is like the. The evolution of, you know, bitcoin and crypto. I mean, that is something that threatens the fiscal monetary policy, which is, you know, by the US Dollar. Well, because now we see that there is something that is based on a limited quantity that's getting high adoption that seems to be a more attractive store value than gold, seems to have a, you know, a better stable value than the dollar, a better return over time with less volatility than the S P500.

So what you're saying is that would displace the dollar. Is that your point?

I think something digital will displace the dollar at some point for sure.

Okay. And I. The likelihood is it'll be a digital dollar, but. Okay.

Yep. So in our view, a positive anything is better than a negative nothing. And yeah, the media and people that are on CNBC and other venues, they love to talk about the negative because it gets views and it's a lot of clickbait. But we see a lot of positives in the market that people can focus on. And so when you think about financials, this is just a chart of the GBKX index, which is the globally systemic important banks versus the S&P 500 index. And what you'll see is the financials have done pretty well and outperformed. And even though they've taken somewhat of a downturn, the larger the financial institution, the bigger the scale, the better they are to perform. So we're very bullish on financials. We think the large globally systemic important banks will do well because they have scale, because it can adjust, and because the thought is there'll be less regulation and things like that. So we believe that these financial organizations will do really well. And it's something that people can look at as a positive. When you go to the next slide, we also think the metals are doing very well. So if you look at this, this.

Is just a sign. That's a sign that people are concerned about inflation.

Yeah, it's a sign that people are concerned about inflation. It's a sign that people are going to safety. But this is actually the metals. So gold has done really, really well. And everybody's worried about how to time it. Did I miss the move? Is it too high? Well, I can tell you one thing, the thing that's outperformed gold is the gold miners. And this is the index of some of the biggest gold miners. And what I like about this is that gold miners will do well and are profitable. When gold is at 1300 an ounce, it's at something like 3400 an ounce right now. So there's a lot of time for gold miners to continue to do well and continue to be profitable. And so we really, really like this space. And I actually saw a chart today that said, and I don't have it here for the presentation, that silver is actually starting to really outperform. I think it's up about 24% year to date, and it's really starting to catch up to gold. And one of the key things with that as well is that, you know, there's a gold to silver ratio historically, and right now there's a big gap between the price.

It's always been very lopsided, though. I mean, that ever since I can remember, you know, the gold to silver ratio has been very out of balance according to the gold bugs. Right?

Yeah, it has. But, you know, now that you're seeing the move in gold, that could potentially mean that there's some. Some brighter days ahead. We also like the move in AI and, and I don't have a chart on that here, but I could tell you that it massively outperformed the S and P prior to all the tariff talk. And then it has started to make a comeback. But again, if you believe that the AI movement is real, if you believe that all the investment is real, and you believe that AI is the future and it's got legs, we think it's a great opportunity to get back into it At a time where prices have been hit and there's a lot of uncertainty. You know, the old traditional buy when there's blood in the water, maybe I got that metaphor.

Buy when there's blood in the streets.

When there's blood in the streets. I mean, yeah, I think that's something to look at. And we continue to be very, very bullish on the AI trade. One other thing that I would bring up too, is uranium. So with all of this technology, there's a need to power it. And for the first time in a long time, we're talking about nuclear Energy.

Again, which is very, which is very good news.

Yeah.

As soon, as soon as all the techies needed it, suddenly nuclear is okay. Which ever since Jane Fonda ruined it, you know, with her movie the China Syndrome, which was ridiculous fear mongering, it just got ruined. It's a great source of power. It's the cleanest, most efficient, most cost effective source of power there is.

Agreed. And it's powered by uranium. And so when you think about investment in the positives in the marketplace, one reason we like uranium is simply the supply demand dynamic. It has been always favorable for uranium. But the second thing to that is uranium took a hit in correlation with AI. And for a period of time, the price movement of uranium was moving down with the AI movement down, which is a little bit unfair because the supply demand dynamic is only getting more favorable for the price of uranium to move up. So we think there's sort of a gap there in the pricing and we think uranium is another place to sort of play. And then last but not least, I'll give you one more that we really like. It's defense, transatlantic defense, specifically around NATO countries. There is a chart in this presentation. I think it might be a few slides up, but it shows how defense companies, especially those that are in NATO countries, have really outperformed and in fact, they never went negative even through the downturn. You know, with all the geopolitical risks around the globe with what's going on in Gaza, what's going on with Ukraine, Russia and Trump's stance on, hey, we're not going to be Big Brother and protect everybody around the globe. You know, we want you to invest in your own defense. Germany passed a new bill to heavily invest in their own defense. Italy and the rest of the European Union are following behind them. Even if things subside, even if they're ceasefire agreements, even if the tensions in Gaza sort of mellow down, the time is now to be proactive and invest in your own nation's defense. And we just think that's another really great investment opportunity for those who are looking for the positives in the market.

What does the investment play on that then? I mean, I think it's good that the other countries are stepping up to the plate. Trump has forced them to, which is great news. We shouldn't have to pay for everybody's defense. But what's the investment play for the individual investor?

Solactive has an index called Sol nate natom. It's S o l n a T o N. And we have a fund at etf, not to give us shows a commercial called NATO. NATO. And that tracks that selective index. And it is a mix of defense companies, both European and in the United States. Big companies that you know of Airbus, Archer, Boeing, GE Aerospace, Honeywell, L3Harris, Lockheed Martin. And we, we have seen really great performance there. We're not the only one in the space. So people should do their due diligence. But it's a really great strategy that gives exposure. And that's what I was talking about earlier. If you are convinced and you have high conviction in your investment thesis, there's great ways through ETFs to play those kind of markets good.

What else do you want to wrap up with? I mean everybody wants to know where we're going. That's always the question, Paul. So any, anything you want to share with that just to wrap it up?

Yeah, I mean I'm bullish on the United States. I think that behind the scenes all these things are going to be taken care of as soon as they possibly can. The way I like to say it is there is policy and there's procedure.

Right.

So we know what the policies are and we know what the course is for us ahead. And I think that's going to result in better partnerships with our allies and better trade agreements for the United States that's going to benefit all the things that I talked about, bringing manufacturing back, shoring up the supply chains and making sure that we have more in line fair trade agreements with our partners. And I also think it's going to shine a light on China. I think it's going to diminish China's role in the world. And I think that's exactly what Trump wants to do. And so I think once this is all settled and we get past all the procedural maybe missteps that have been taken and all the rulings by courts he'll execute, I have no confidence in that, that this administration will execute. And I think we get back to more certainty, more fair trade agreements. And I think I'm bullish on the United States for the foreseeable future. I don't think we go into recession and I just think everybody's just got to settle down a little bit and take advantage of the opportunities that are presented.

Paul, I gotta say I agree with you. You know, it is just so mind boggling how all of these doomers out there get so much traction. We are living in the most amazing time in history. This is the time that our ancestors dreamed of. We're here, we've arrived, this is it. And it's incredible. The innovations that are taking place, new technologies that are just appearing daily are mind boggling. We're moving toward a place where billions of robots are going to be doing all of the hard work for us. Cars are going to be driving us around, transporting us automatically while we take a nap. It's just an incredible time. The amount of wealth that is going to be created will just boggle the mind.

And to think that very soon you will be able to have a personal robot to take care of everything that you need to in your home, make your bed, clean your house while you get in the car.

I know this will be available to everybody. I mean, practically everybody will have access to this. You know, Peter Diamandis says that the robots will be a 300amonth payment. You know, that's cheaper than a housekeeper and it's way more than a housekeeper. Okay. And you know, these robots could be used as part of the sharing economy. Maybe you don't need a full time robot. Right. Like you don't need a full time nanny or housekeeper. Right? Right. You know, so you'll share them with your neighbor and share the cost. And it's just incredible. The prosperity coming our way is just incalculable. We can't even imagine it. And yet there's all kinds of people out there saying the world is going to hell in a handbasket. You know, I admit there's geopolitical problems and so forth, but it's just truly incredible.

Nothing is perfect, but like we said in the previous slide, look for the positives. They're out there.

Yeah, definitely. Homerino, give out your website.

So it's www.themsetfs.com and we really appreciate you giving us the attention and getting us on. It was a great conversation. So thanks so much, Jason.

Thank you, Paul. Happy investing.

All right, you too.

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