Trump/Musk Recession

If we define an economic recession as two straight quarters of negative GDP, then we must consider it likely that a recession is now underway (Q-1 2025) and that it will continue for at least several quarters this year.

The latest GDPNow forecast from the Atlanta Federal Reserve projects the change in real GDP at -2.4% for the first quarter of 2025.

And President Trump admitted today in a Fox News interview that not even he can rule out an economic U.S. recession on the near-term horizon. 

While it may not matter exactly what will have caused this upcoming recession, here are three of the potential contributing factors: 

1. Elon Musk and his DOGE actors have been and continue to cause major negative disruptions in Government spending and employment.

2. President Trump's threat to impose major tariffs on our largest  trading partners has generated extraordinary levels of uncertainty in the business community and also among already cash-strapped consumers.

3. Major changes in U.S. foreign policy by the Trump Administration have shaken the "global world order" and have introduced potential doomsday scenarios that could negatively impact all the populations on planet Earth.

I am not sure if any investments are safe right now. Principal preservation must be the very highest consideration in any portfolio planning until the dust settles (which may not be for at least several quarters).

I think that short term Treasury securities are still safe, but I am not even sure about this once incontrovertible statement.

Gold, Silver, and precious metals stocks would seem an obvious choice in this expected "risk off" environment. However, if there is a liquidity squeeze (as I now project), then even these "safe haven" investments will come under downside pressure.

The U.S. stock market is already under significant selling pressure, and I continue to expect a serious bear market to unfold which will test the lower limits of everyone's imagination on the downside.  A 20% correction now seems likely, and I would not rule out a decline in the major indices of at least twice this projected loss.

Bottom Line: Cash is King for now!