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šø #0018 - Will You Get Rich from the Trade War?
Investors who saw the 1930s crisis early made fortunes. Hereās their playbook.
Shrewd Investor
February 25, 2025 ā¢ Read in 9 minutes
Will You Get Rich from the Trade War?
Good morning Shrewd Investor,
I came across an old newspaper clipping the other day.
The headline? āCongress Passes Smoot-Hawley TariffāMarkets Plunge.ā
The year was 1930. The stock market had already crashed, but this trade war turned a bad situation into a full-blown catastrophe. Businesses collapsed. Farmers lost everything. Unemployment soared. And yetā¦ a handful of investors quietly built generational wealth.
It wasnāt luck. They saw what was coming and positioned themselves before the crisis hit.
Fast forward to today.
The U.S. is once again locking horns with the world. Tariffs are going up. Global supply chains are breaking down. Nations are retaliating.
Iāve seen this movie before. The last time it played, those who paid attention made millions.
The question is: Are you on the right side of history?
Today, Iāll show you how the last great trade war unfolded, the mistakes that wiped out most investors, and the exact playbook the wealthy used to turn crisis into opportunity.
Take a look and have an amazing week!
Talk soon,
Josh
P.S. My inbox has been exploding with your questions lately, so I canāt get to all of them.
So I'm launching something special: Shrewd Investor Office Hours.
Every Friday at noon, you can join me live to pick my brain about advanced wealth strategies that the ultra-wealthy use - the kind of moves that could save your family millions in taxes.
š Reply āOFFICE HOURSā if youād like to join usā¦
In todayās issue:
Weekly Wisdom - Popular aphorisms and quotesā¦
Market Minute - Trade war is heating upā¦
Deep Dive - The 1930ās playbook for the 2020ās trade warā¦
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WISDOM
āThe time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.ā
BEST LINKS
The most interesting things happening todayā¦
āļø TRADE WAR!
Germanyās next leader just threw down the gauntletāquestioning NATOās future and calling for a Europe independent from the U.S. Sounds like a bold move, but can Germany afford it?
China's hitting back at the U.S. with new tariffs on American goods and an antitrust probe into Google.
š° WEALTH
CEOs and billionaires are ditching understated styles for bold fashion choices. This shift from 'quiet luxury' to expressive attire is redefining executive wardrobes.
Luxury brands are waking up to the untapped potential of older consumers. In 2025, those over 50 control the majority of global wealth, yet many feel ignored by marketing focused on youth.
š ECONOMY
The money markets in the Eurozone, US, and UK are set for notable shifts in 2025
āæ CRYPTO
President Trump is diving into the crypto world, launching ventures like $TRUMP coin and World Liberty Financial. While these moves aim to boost the industry, they also raise questions about potential conflicts of interest and market volatility.
Hackers just made off with Ā£1.1 billion ($1.5B) from Bybit, possibly the largest crypto theft in history. Ethereum prices took a hit, but Bybit claims user funds are safe.
š¢ļø COMMODITIES
Commodity trading experienced a significant surge in profits during 2022 and 2023 due to heightened market volatility.
š REAL ESTATE
In 2024, multifamily housing completions reached 588,000 units, the highest since 1974, indicating a shift towards multifamily and build-to-rent developments. This trend suggests a growing preference for rental properties over single-family homes.
DEEP DIVE
šØ Trade Wars and Market Crashes: The 1930s Playbook for 2024 Investors
History shows that trade wars donāt just shake economiesāthey create new fortunes for those who see the shift early. Hereās how the last great trade war unfolded and what smart investors are doing today to stay ahead.
In 1930, a single bill turned a stock market crash into the Great Depression. Ninety-four years later, the U.S. is repeating history. The question is: will you profit from itāor get wiped out?
š” Historyās Playbook for Trade Wars
Trade wars have historically triggered depressions, bank failures, and stock market collapsesābut also created fortunes for those who saw the patterns early.
The Smoot-Hawley Tariff Act of 1930 was designed to āprotectā American businesses by imposing tariffs on over 20,000 imported goods. The result? Global retaliation, a 60% collapse in world trade, and an economic downward spiral that deepened the Great Depression.
Sound familiar?
Today, Americaās new trade warāwhich began under Trump and is continuing under Bidenāhas eerie similarities. But history doesnāt just repeatāit rhymes.
š° Key takeaway: The winners of the 1930s were those who positioned themselves in hard assets, strategic industries, and new financial instrumentsāthe same playbook that could work today.
š The Forgotten Trade War That Broke the Economy
It wasnāt just the 1929 stock market crash that led to the Great Depressionāit was the Smoot-Hawley Tariff Act that choked off global commerce.
In 1930, the U.S. imposed tariffs on over 20,000 imported goods, sparking global retaliation.
Trade collapsed by over 60%, wiping out entire industries dependent on exports.
Unemployment soared as businesses failed due to supply chain disruptions and lost markets.
The Federal Reserve responded poorly, tightening credit and accelerating the economic collapse.
The lesson? Trade wars donāt just harm foreign economiesāthey cripple domestic businesses too.
āļø The Shockwaves: 1930s vs. Today
History is playing out again in real-time.
ā 1930s Parallel:
U.S. farmers and manufacturers collapsed as global demand vanished.
Europe and Canada retaliated with their own tariffs, crushing American industry.
The Fed miscalculated, tightening credit instead of stimulating growth.
šØ 2020s Reality:
The U.S. is raising tariffs on China and the EU, leading to retaliatory trade restrictions.
Supply chain fragility is pushing up inflation and disrupting manufacturing.
The Federal Reserve is caught between inflation and recession, just as it was in the 1930s.
Trade wars arenāt just about politicsātheyāre about positioning. The right investors turn crisis into opportunity.
š Who Profited from the Last Trade War?
While millions of investors were wiped out in the 1930s, a few saw the collapse coming and positioned accordingly:
Joseph Kennedy (JFKās father): Shorted stocks before the crash, then reinvested in hard assets.
Howard Hughes: Bought up assets at rock-bottom prices and built a fortune.
Oil Barons & Industrialists: Acquired real assets (oil, steel, railroads) at historic discounts.
š The Modern-Day Equivalent:
Shorting vulnerable sectorsāTech, consumer discretionary, and overleveraged stocks.
Buying hard assetsāEnergy, commodities, real estate, gold, farmland, infrastructure.
Positioning for government stimulus bailoutsāThey always follow crises.
This is the same blueprint for todayās investors.
š® What to Watch for Next (And How to Profit)
š“ Warning Signs:
China & Japan dumping U.S. TreasuriesāSignaling economic decoupling.
Supply chain disruptions leading to major price spikes.
The Fed trapped between inflation and recession.
ā Investment Playbook:
BUY: Hard assetsāGold, oil, farmland, defense stocks.
SHORT: Overleveraged sectorsāOvervalued tech, zombie corporations.
HEDGE: Cash, private credit, alternative investments.
If history is any guide, weāre on the verge of a major shift.
š¢ Final Thought: History Rewards the Prepared
The last trade war wiped out millions of investorsābut also created new billionaires.
The same patterns are unfolding again today. Are you ready?
š Hit reply and let me knowāwhatās your strategy for this new era of economic war?
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The content provided in this newsletter is for informational purposes only and should not be considered as specific advice for any specific individual. The information is prepared by knowledgeable individuals and is not written by certified tax professionals or investment advisors. For personalized advice tailored to your unique financial situation, consult with a qualified tax professional, financial advisor, or attorney.
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