Many expect the Trump administration to enact lower taxes, lighter regulations, and reverse many signature programs of the Biden administration, including the government-mandated transition from fossil fuel energy to wind and solar, and from gasoline-powered cars and trucks to electric vehicles (EVs).

“I think a lot of CEOs in the country said enough is enough,” Andy Puzder, former chief executive of CKE Restaurants, told The Epoch Times.

“Just look at the stock market on the day after the election and you can see exactly how American CEOs and American businesses felt about Trump winning the presidency.”

Cutting Regulations

Regulatory policy is likely the area where the incoming administration could have the most immediate impact on businesses.

According to an analysis by the American Action Forum (AAF), as of August this year, the Biden administration has handed down 994 new regulatory rules, adding an estimated $1.69 trillion in costs to American businesses. By comparison, during Trump’s first four years in office, his administration wrote 1,084 new rules that mostly eased regulations and reduced costs by $99.9 billion.

“Agencies like the EPA and Department of Energy regularly acknowledge in their cost-benefit analyses how energy efficiency regulations will raise up-front product costs,” AAF director of regulatory policy Dan Goldbeck told The Epoch Times.

A July study by University of Chicago economist Casey Mulligan calculated that the present value of the cost of regulations imposed by the Biden–Harris administration amounted to $47,000 for each American household, while deregulation during the Trump administration reduced costs by nearly $11,000 per household.

The new fuel economy standards set by the Biden administration, for example, are predicted to add $3,400 to the cost of new cars, trucks, and SUVs. The Biden administration similarly imposed tough new emissions restrictions on electric utilities, as well as new efficiency regulations on furnaces, water heaters, central air conditioners, dishwashers, and other household appliances.

Trump, by contrast, pledged during a campaign rally in October to “sign an executive order directing every federal agency to immediately remove every single burdensome regulation driving up the cost of goods.”

Trump has also toyed with appointing Tesla and SpaceX founder Elon Musk to run a newly-proposed Department of Government Efficiency, with the goal of cutting $2 trillion or more from the federal budget.

“If what President Trump says about establishing a government efficiency agency with Elon Musk is in fact going to happen, and they have the fortitude to start taking a chainsaw to government bureaucracy, that would be positive for the economy long-term, but there will likely be some added pain over the short-term,” Tim Schwarzenberger, portfolio manager with Inspire Investments, told The Epoch Times.

While Schwarzenberger predicts a recession in early 2025, he says that Trump’s policies “could make that downturn less severe as he will be cutting taxes and regulations and opening up energy production, while at the same time reducing green energy programs and possibly reforming Medicaid.”

Boosting Oil and Gas Production

America’s energy industry will be the sector most heavily impacted by the change in administrations, analysts say.

“Trump is likely to remove regulations and other limits on fracking and other forms of energy production, which would be good for oil drillers, refiners, and sectors that use a lot of energy products: transportation, manufacturing, aviation and others,” Peter Earle, senior economist at the American Institute for Economic Research, told The Epoch Times.

Despite efforts by the Biden administration to restrict drilling on federal lands, U.S. oil and gas production continues to break records. The U.S. Energy Information Administration reported in March that “the United States produced more crude oil than any nation at any time, according to our International Energy Statistics, for the past six years in a row.”

However, given America’s abundance of energy resources, analysts say there is a lot of room to expand domestic production further.

“We’ve got record production of energy, but it’s all happened despite the administration, and on lands that the administration cannot control,” Dan Kish, senior vice president of policy at the Institute for Energy Research, told The Epoch Times. “We just don’t think there’s any reason to have a scarcity of affordable and reliable electricity or energy of any kind in the United States.”

Expanding energy production, particularly in oil and gas, has been a cornerstone of Trump’s economic platform.

“One of the major proposals in energy has been to ease the permitting process of drilling on federal land and encouraging new natural gas pipelines, which will ultimately create greater supply and should reduce consumer costs and have positive economic impacts,” Ryan Yonk, an economist at the American Institute for Economic Research, told The Epoch Times.

Coal plants, which are facing closures due to new emissions regulations, could also benefit under a Trump administration. According to the Department of Energy (DOE), nearly one-third of existing U.S. coal plants are scheduled to be shut down by 2035. But that may change.

Brian Savoy, CFO of Duke Energy, an electricity utility that serves the Carolinas, Florida, Indiana, Ohio, and Kentucky, said his company might keep its coal plants running if the Trump administration cuts back EPA emissions regulations that were enacted under the Biden administration.

However, while it is one thing to get oil and gas companies to produce more from existing wells, it is quite another to get them to invest significant capital into exploration and building new wells and refineries. It is not only regulatory uncertainty that is holding them back, it is also the over-investment that led to a glut, which drove prices down a decade ago. By reducing the cost of regulation and providing some assurance that the industry will not be targeted by climate mandates, analysts say the incoming Trump administration might reduce the cost structure enough to entice the industry to begin investing again.

“What President Trump did in his first term, and what President Biden has been unable to do, is to get the price of oil down and have oil production continue at an increasing pace,” Puzder said. “That’s when you see an impact on inflation overall; it’s when oil companies can make a profit at a lower price per barrel.”

Many analysts predict that if a second Trump term can bring lower energy prices, this will have a ripple effect throughout the U.S. economy.

Retail gasoline prices, which were already coming down during the final years of the Obama administration, hit a low of less than $2 per gallon during the first Trump administration and remained under $3 per gallon throughout his term. Gas prices shot up to more than $5 per gallon during the Biden administration before falling back to the current range of between $3 and $4 per gallon.

“All of these things that have gone up in price significantly are affected by the input costs of energy,” Kish said. “Everything that goes into the price of eggs is affected by the price of energy—it’s heating the hen house, it’s the energy consumed in making food to feed the chickens, it’s the transportation of the eggs, it’s the refrigeration.”

Renewable Energy May Retreat

One segment of the stock market that has not responded well to Trump’s victory, however, is renewable energy.

The stock price of Sunnova Energy, a solar energy developer, tumbled from $6.90 per share on election day to $3.96 per share the following day, and continued to fall to just over $3 per share at the end of the week. More broadly, the Solar Energy Index CFD, which tracks the performance of publicly traded companies in the solar energy sector, fell from $42 before the election to $36 by week’s end.

Anticipated headwinds regarding federal regulations and subsidies that support this industry are the likely cause.

“Trump has pledged to kill the offshore wind industry on his first day in office,” Robert Bryce, energy analyst and author, told The Epoch Times. “There’s no reason to doubt that he will do just that, which will be good news for whales and ratepayers.”

In addition, “the Biden administration has opened huge tracts of land in the Western U.S. to development [for wind and solar plants],” Bryce said. “I expect Trump and his appointees will backtrack on that and may even withdraw some of the permits that have already been granted.”

Reaching net zero has been a central goal of the Biden–Harris administration, which committed in April 2023 to “achieving a carbon pollution-free power sector by 2035 and net zero emissions economy by no later than 2050.”

The Inflation Reduction Act of 2022 allocated approximately $400 billion in tax credits, federal loans and subsidies toward the production of “green” energy in the United States, primarily for wind and solar power, but also for nuclear energy.

However, a 2021 University of Chicago report, authored by economists Michael Greenstone and Ishan Nath, analyzed regulations, called renewable portfolio standards (RPS), which forced utilities to have at least 2 to 5 percent of their power come from wind and solar, and concluded that “electricity prices are 11 percent higher seven years after RPS passage.”

In addition, a 2021 report by Columbia University’s Climate School, found that as the share of renewables exceeds a minimal share of the energy mix, electricity bills go up.

“Continuing to push the false narrative of abundant and affordable clean energy is a huge political risk that will backfire when the public has to pony up for a bill they weren’t expecting,” the report’s author Lucas Toh writes.

Cutting Personal Taxes, Hiking Tariffs

Tax policy is another area where many expect to see significant changes under a Trump administration.

Much of the tax cutting that Trump pledged during his reelection campaign will require cooperation from Congress, and while Republicans were able to gain a majority in the Senate, they are still waiting on vote counts to see whether they will also control the House.

Particularly significant is whether Republicans will succeed in extending the Tax Cuts and Jobs Act (TCJA) of 2017, which is due to expire in 2025.

The TCJA cut the corporate tax rate to 21 percent from 35 percent, and while this rate cut has no expiry date, both President Joe Biden and Vice President Kamala Harris had proposed increasing the corporate tax rate to 28 percent.

If the TCJA is not renewed, however, personal income tax rates will rise, standard deductions will be reduced, and the child tax credit will be reduced as well. The maximum tax bracket will go up from 37 percent to 39.6 percent; however, the $10,000 cap on deductions for state and local taxes, which largely benefitted wealthy people in high-tax states such as California and New York, will no longer apply.

To the extent keeping these tax cuts in place spurs consumption and investment, many economists favor it. Critics, however, fear it will reduce government revenue and increase the federal deficit, which is projected by the Congressional Budget Office to hit $1.9 trillion at the end of this year.

Government revenues do not always correlate to tax rates, however, and if the tax cuts lead to significant economic growth, they could end up bringing in more tax revenues. Government tax receipts have increased consistently since the passage of the TCJA, from $3.3 trillion in 2017 to $4.4 trillion in 2023, according to Statista.

Other elements of Trump’s tax plan have received less positive reviews.

This includes his pledge to impose 20 percent tariffs on most imports, and tariffs as high as 60 percent on Chinese imports, which could include EVs, wind and solar components, furniture, toys, clothes, and sporting equipment.

Import taxes at this level “would spike the average tariff rate on all imports to highs not seen since the Great Depression,” Tax Foundation economist Erica York wrote. It could hurt the retail industry and fuel inflation.

However, it is unclear how much a Trump administration will ultimately differ from his predecessor in regard to trade with China.

During his term in office, Trump imposed about $80 billion in new import taxes on thousands of products such as steel, aluminum, appliances, semiconductors, and solar panels, many of which were coming from China, according to the Tax Foundation.

The Biden administration kept most of those tariffs in place, and in May added an additional $3.6 billion in tariffs on Chinese imports, including semiconductors and electric vehicles. And while the Trump administration collected $89 billion from so-called “trade war” tariffs, the Biden administration collected more than $144 billion.

In addition, Trump’s pledge to cut taxes on tips, which Vice President Kamala Harris also promised to implement, has been met with some skepticism.

“Among the most popular proposals are those to lower or stop taxation on tips and overtime wages for service workers, or eliminate taxes on social security benefits,” Yonk said.

But these piecemeal efforts would have little overall economic benefit, while further complicating the tax code and raising questions about fairness for workers outside the service industry, York said.

“Instead, extending the tax cuts from the first term and expanding them, without narrowly targeting specific groups, would yield better economic effects and create broad-based tax relief rather than special programs for narrower groups,” he said.

Only the most affluent can afford to live there and many of them are choosing to leave. Recent trends over the past two years have seen an indisputable exodus from a city that is known for its lifestyle options. It was once considered a privilege to live there. Today, it’s such a burden that the people are trying to escape.

As Gemini AI details, New York City continues to break records for rent prices:

As of September 2024, the average rent in New York City is $3,869 per month, which is 147% higher than the national average. The average rent for different apartment sizes is:

• Studio: $3,145 per month for an average of 444 sq ft
• One bedroom: $3,869 per month for an average of 597 sq ft
• Two bedroom: $5,268 per month for an average of 791 sq ft
• Three bedroom: $6,509 per month for an average of 1,009 sq ft

In June 2024, the median rent in Manhattan was $4,667 per month, which was a record high.

Unfortunately, many are unable to leave without giving up their careers. The city is still one of the world’s hubs for all things finance and those who work for companies embedded in New York City keep the outrageously priced apartments in high demand.

According to NY Post:

The hunt for a New York City apartment has gone from frustrating to downright feral.

This summer, renters are battling it out like never before, all for a shot at a roof over their heads in a city where landlords are calling the shots and jacking up prices to astronomical levels.

Take Aurielle Catron, a 29-year-old security engineer who braved the NYC jungle in search of a two-bedroom in Bushwick. After a brutal month-long search and 52 viewings, Catron landed a rent-stabilized fourth-floor walk-up for $3,200 a month.

It wasn’t her dream pad — it’s missing a laundry room and elevator — but after losing a bidding war that saw a $2,800 unit shoot up to $3,600, she was just relieved to have a place to call home.

Consumption spending makes up two-thirds of the U.S. economy on average, so as the U.S. consumer goes, so goes the U.S. economy.

For once, the White House has told us something that is actually accurate.  In the first quarter of 2024, consumer spending accounted for 68 percent of GDP.  It has been right around the two-thirds mark for many years, and that makes it one of the most stable numbers in economics.

Unfortunately, consumers are more financially stressed today than they have been in ages.  In fact, a survey that was recently conducted by the U.S. Census Bureau discovered that 37 percent of U.S. adults now struggle to pay for their most basic expenses each month…

About 37% of American adults are in households that found it somewhat or very difficult to pay for typical expenses between late June and late July, according to the U.S. Census Bureau’s Household Pulse Survey.

When you are barely able to pay for food, housing and other essentials, there is not going to be extra money to blow at retail stores and restaurants.  This is one of the primary reasons why so many retailers and restaurant chains are going bankrupt in 2024.

Of course the economic pain is not spread equally across the entire country. According to that same survey, consumers are particularly struggling in “poor” states such as Mississippi, Alabama and West Virginia…

Mississippi (49.5%), Alabama (45.5%) and West Virginia (43.5%) have the highest percentage of adults who say they’re having trouble affording their basic needs.

I think that there are many good things that could be said about all three states. In fact, I have Alabama ranked 11th for survivability out of all 50 states in my book about the great turmoil that will soon hit our society.

But if you don’t have money, it can be really tough to live in an area of the country where employment prospects are relatively poor. Needless to say, lots of people in big states are really hurting right now too.

The Census survey found that 41.8 percent of Florida residents, 40 percent of New York residents, 39.9 percent of Texas residents and 37.5 percent of California residents are having difficultly paying for their basic expenses at this point.

When close to 40 percent of the population is just barely scraping by, you have a major economic crisis on your hands. No matter how they want to frame things, our leaders are not going to be able to ignore this forever. The lack of consumer spending is hitting the restaurant industry particularly hard…

The year has not even reached its fourth quarter and bankruptcies among restaurant chains, operating companies and large franchisees are already nearly double what they were in 2023.

Jonathan Carson, co-CEO of bankruptcy services and technology firm Stretto, says there have been 17 such Chapter 11 filings in the sector so far in 2024, and there were only nine at this point last year. He expects the trend to continue.

According to Carson, a number of factors have contributed to the nightmare that the restaurant industry is now facing…

“In this situation, a challenging economic environment, post-pandemic recovery issues, rising labor costs, changing consumer habits and inflation have caused more restaurants to struggle in 2024,” Carson told FOX Business in an interview, noting those issues have also impacted other sectors of the economy.

Retailers have also been going bankrupt at a staggering rate.

Just today, I came across another example.  Earlier this year, LL Flooring shuttered close to 100 stores, but now the company has decided that it is time to permanently shut down all 442 stores…

LL Flooring – previously known as Lumber Liquidators – is shutting all its stores after going out of business after three decades.

The retailer, one of America’s biggest flooring suppliers, was looking for a buyer after filing for bankruptcy.

Earlier in the summer it had 442 stores, but shut nearly 100 as it looked to cut costs and woo investors. No buyer could be found.

You can’t get blood out of a stone.

If consumers had plenty of discretionary income, they would be out spending it.

But they don’t, and things will only get worse during the months ahead.

Politicians can keep giving more speeches about “how well the economy is doing”, but it won’t change the cold, hard facts on the ground.  If someone tries to tell you that the economy is in good shape, just point out that the number of business bankruptcies has been absolutely exploding…

According to statistics released by the Administrative Office of the U.S. Courts, annual bankruptcy filings totaled 486,613 in the year ending June 2024, compared with 418,724 cases in the previous year.

Business filings rose 40.3 percent, from 15,724 to 22,060 in the year ending June 30, 2024. Non-business bankruptcy filings rose 15.3 percent to 464,553, compared with 403,000 in the previous year.

The moment that you point this out, the argument will be over.

There is no way that anyone can monkey with that number.

Either businesses are filing for bankruptcy or they aren’t.

Right now, companies all over America are really hurting, and as a result many of them are also laying off workers.

In fact, things are so bad that even the tech industry has been conducting mass layoffs…

Tech companies continued to cut jobs at a rapid pace in August 2024. More than 27,000 workers in the industry lost their jobs as over 40 companies, including big names like Intel, IBM, and Cisco, as well as numerous smaller startups, announced layoffs. To date, more than 136,000 tech workers have been laid off by 422 companies in 2024, indicating significant upheaval in the sector.

The momentum of our economy is clearly taking us in a very troubling direction.

Our standard of living has been in decline for years, and now our economic problems are accelerating.

Hopefully you have been making preparations for hard times, because a tremendous amount of pain is ahead.

Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Analysts at Goldman Sachs assert, “We strongly believe in the diversifying role of commodities in investment portfolios based on several structural drivers, including commodities’ hedging role against supply disruptions, not an uncommon occurrence in energy, and the potential for sharp rallies in select industrial metals driven by a combination of long supply cycles and structural green metals demand growth associated with energy security and decarbonization investment.”

Despite this belief, the firm has decided to recalibrate its strategies in light of a softening cyclical environment. “However, given the current softening cyclical environment, we opt to tactically close our 2024 Deficits Basket trading recommendation with a potential gain of 8% and focus on our highest conviction views in the current environment, namely higher implied oil volatility, long gold and short long-dated European gas,” the analysts noted.

The surge in gold purchases by central banks has been remarkable, with the Kobeissi Letter reporting, “Global net gold purchases by central banks reached 483 tonnes in the first half of 2024, the most on record.” This figure represents a 5% increase over the previous record of 460 tonnes set in the first half of 2023.

In the second quarter of 2024, central banks acquired 183 tonnes of gold, reflecting a 6% year-over-year increase, although this was 39% lower than the 300 tonnes purchased in the first quarter, as highlighted by the Kobeissi Letter.

Goldman Sachs remains optimistic about gold’s prospects, stating, “Gold stands out as the commodity where we have the highest confidence in near-term upside.” The firm has set a bullish target of $2,700 per ounce for early 2025, driven by three key factors.

First, the analysts believe that “the tripling in central bank purchases since mid-2022 on fears about US financial sanctions and US sovereign debt is structural and will continue, reported or unreported.”

Second, they anticipate that “imminent Fed rate cuts are poised to bring Western capital back into the gold market, a component largely absent of the sharp gold rally observed in the last two years.”

Finally, they emphasize that “gold offers significant hedging value to portfolios against geopolitical shocks including tariffs, Fed subordination risk, and debt fears.”

Their analysis suggests a potential upside of 15% in gold prices should financial sanctions rise similarly to the increases seen since 2021, or if US CDS spreads widen by one basis point. “That said, due to the particularly price-sensitive Chinese market digesting the recent price rally, we have adjusted our $2,700 target to early 2025 vs year-end 2024 previously. However, we believe that that same price sensitivity also insures against hypothetical large price declines, which would likely reinvigorate Chinese buying,” the analysts added.

The Kobeissi Letter raises an intriguing question: “Why are central banks calling for a ‘soft landing’ while stocking up on gold?”

As Goldman Sachs maintains its bullish outlook for gold into late 2024 and early 2025, the ongoing demand from central banks is expected to further bolster prices. However, the yellow metal must navigate through September, historically a challenging month since 2016.

With governments around the globe continuing to print debt at unprecedented levels, the prospects for gold remain strong. “But with governments worldwide continuing to print debt like there is no tomorrow, there’s a strong chance that the strength shown by gold in the first half of 2024 will continue in the second half and beyond as the primary result of debt printing is currency debasement,” the Kobeissi Letter concludes.

As the economic landscape evolves, gold’s role as a protective asset appears more critical than ever.