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Steve's note: We're nearing the final innings of an incredible bull market – and as I've written before, I expect the biggest gains are still ahead. But my friend and colleague Porter Stansberry sees a different opportunity today. He believes an event is coming that will transform the U.S. economy, potentially for decades to come. I may not agree with him 100%. But I do believe this essay presents some important ideas, and that's why I'm sharing it today...

The 'Deep State' Is Fighting Back

By Porter Stansberry
Tuesday, April 4, 2017

A secret civil war is being waged right now in Washington D.C...
 
It is about to have a HUGE impact on our country.
 
We're approaching what will be the most dangerous period in our country's political history since the Great Depression. What could happen next scares me. But I continue to be optimistic that what will unfold will be great for our country.
 
I'm certain that you simply won't believe much of what I'll tell you today. In fact, until I did my own follow-up research to verify what I could from my sources, I disregarded this story as "political nonsense" or just another D.C. conspiracy theory.
 
Besides... it was all too horrible to believe. But then... almost everything my sources told me would happen started happening.
 
Let's begin...
 
Did you know the U.S. government has a secrecy designation so restricted that virtually nobody – not even lifetime members of the intelligence community – even knows what it's called?
 
It's not "TOP SECRET." It's way beyond that level.
 
In late 2009, President Obama created this new level of secrecy inside our government with an executive order (No. 13526) – so Congress never approved it. Administered by the CIA, this new level of secrecy has created a covert government-within-the-government that almost nobody knows... and absolutely nobody is monitoring.
 
If you've ever heard the term the "Deep State" – the secret government-within-the-government that actually holds power – then you know why a level of secrecy beyond "top secret" is so important. This new, more restricted level of secrecy was created so that the most powerful leaders of our government could communicate in total isolation.
 
This level of secrecy is such a closely guarded secret that the name of the program itself is classified – and divulging the name is a crime, punishable by at least 10 years in a secret prison. So this level of security clearance is known only as "codeword."
 
At the highest levels of our D.C. government, only two dozen or so people have codeword clearances...
 
I learned about this earlier this month. I was invited to lunch with someone who has held that level of security clearance. He told me about the existence of the codeword-level program. This isn't a rumor. It's a fact.
 
For the last 30-plus years, my source has worked for and around the highest levels of our government. He is currently regarded as the president's most likely choice to become our next Federal Reserve chairman.
 
Today, however, his clients include the world's top hedge-fund managers and the leaders of America's biggest corporations. He is, in short, America's corporate representative of the Deep State.
 
We call him the "Metropolitan Man."
 
We met about a year ago. He reached out to me through a mutual friend – one of the best, young hedge-fund managers in New York. He asked me to join him for dinner at the Metropolitan Club in New York, one of the most elite clubs in the United States.
 
(Legendary banker J.P. Morgan founded the club. It's where billionaire investor Warren Buffett held his 50th birthday party. And it sits at the southeast corner of Central Park, across from The Plaza Hotel, with a great view of Columbus Circle.)
 
At the time, the Metropolitan Man was forecasting – correctly – that the world's central bankers and their negative-interest-rate policy were failing... and that they would soon trigger a global run out of paper money and into gold. Over the next several months, gold and gold stocks soared (as you may remember).
 
A few days ago, the Metropolitan Man asked to see me again...
 
He wanted to talk about something he had never seen before in all his years working in the government.
 
For the first time ever, a codeword-level secret was leaked to the press. Nothing this sensitive has ever been leaked before – ever.
 
Among senior leaders in D.C., it is widely believed that the director of the CIA himself was responsible for the codeword leak. And it's rumored that this information was then passed to the press through New York Senator Chuck Schumer's office.
 
What was leaked?
 
It was the codeword-level secret CIA briefing about a meeting in Trump Tower last December... between a Russian ambassador and two senior Trump administration officials – Jared Kushner and Michael Flynn.
 
When Flynn lied about the meeting to the White House staff, he was fired. But the deeper question is: How did the CIA know about the meeting? How did it know how long the meeting lasted? How did it know exactly what was discussed? And how did that information end up in the hands of a New York Times reporter?
 
This backstory explains how Trump knows the CIA was spying on Trump Tower. And the counternarratives – Trump's claim that Obama was spying on him and the Democrats' claim that Trump is in league with Russia – are the beginning of a serious war. A civil war inside the Deep State itself.
 
Reading the newspapers won't explain how this war is being fought...
 
They will never publish a clear explanation of the battle lines – or even who is fighting or why. But the outcome of these battles is likely to determine the fate of our economy for the next several decades.
 
Let me explain why... and tell you what this fight is really about...
 
For the last 40 or so years, the U.S. economy has been built around a model that created vast power in D.C.
 
This model has a few important components...
 
First, we have a highly "progressive" income tax. Without extremely progressive income-tax rates – where about half the country pays nothing and the top 10% pay for roughly 80% – the electorate would never continue to vote for more and more government. But it does, mostly because it doesn't have to pay for it.
 
Second, the government has a powerful regulatory regime in place. This allows D.C. to essentially control vast segments of our economy. Take Wall Street, for example. Who gets to sell a bond or a stock to the public? Nobody the Securities and Exchange Commission doesn't like (i.e. yours truly). This power results in tremendous amounts of "tribute" – legal fees, fines, and hidden lobbying that flows into D.C. and feeds its economic ecosystem.
 
And finally... there's the North American Free Trade Agreement (NAFTA) and "free" trade. Our country has the ability to export all of the inflation generated by our central bank. This has led to decades of lower and lower interest rates and the government's ability to borrow essentially endless amounts of money without any serious inflationary consequences.
 
These three components form the foundations of Washington's power. Attack any of them, and you risk a huge fight with the Deep State.
 
What Trump is doing right now via his border-adjustment tax, additional tax reform, and regulatory rollback is targeting all three of them at the same time. If he wins, all of the power that has been consolidated in D.C. over the past 40 years will evaporate.
 
Trump has put a metaphorical gun to the head of the Deep State...
 
And now, the Deep State is fighting back, tooth and nail, to protect the system it has built.
 
Look at what has happened to the middle class in America over the last 40 years...
 
Did NAFTA prevent price inflation by allowing America's consumer economy the luxury of accessing the world's cheapest labor? Yes, it did. But the flip side was devastating to the entire manufacturing industry in the U.S.
 
And where did the resulting wealth flow? To D.C., and to the top 1% of America's wealthiest people who were able to access foreign markets (and shield the resulting income from America's tax system).
 
Meanwhile, America remains the only industrial country in the world with global income taxation (you have to pay federal income tax, no matter where you live) and without a value-added tax. In short, we've chosen a system that punishes wage earners, while rewarding individuals and corporations who use overseas labor. The result has been a decline in real, after-tax wages over the last 40 years. That's a recipe to destroy the middle class – and that's what has happened.
 
Trump's plan to effectively lower income taxes to 25% (maximum) and implement a value-added tax to discourage foreign production of U.S. goods will turn this entire economic structure on its ear and disenfranchise the Deep State that controls it. The winners will be the middle class, small-business owners, wage earners, and America's manufacturing base. The losers? Those who have invested heavily in the current Deep State regime.
 
Why is this scary?
 
Well, unlike the health-reform issue, the Metropolitan Man assured me that Trump's tax-reform agenda would certainly pass. "It's a done deal," he said. He told me that his job lately "has been to help major corporations understand what will be in the new laws and how they will impact various markets." That means the Deep State has been pushed into a corner. What it might do next, no one knows.
 
"That it would leak a codeword secret... Well, I would have told you that couldn't happen. I've never seen it before, not in more than 30 years in D.C. It's scary because if it'll do that, it'll do anything. Stage a terrorist attack? Start a war with China? Nothing is impossible anymore."
 
That's the downside.
 
The next several months could see our government erupt into open civil war. The FBI accusing the president of treason... The president accusing a director of the CIA of breaking the law and having him arrested. Who knows where this will lead?
 
On the other hand, assuming the government doesn't collapse into a civil war, Trump's new economic model will become a reality before the end of the year. A new economic regime is coming in America. For some industries (and for most Americans) these changes will bring massive prosperity. And for others – especially for companies and individuals who have been living at the government trough, tough times are looming.
 
Here's the best part...
 
I believe these coming changes are so important and could lead to so much wealth creation that I've convinced the Metropolitan Man to come forward.
 
We will hold a meeting with him, at our offices in Baltimore, tomorrow night.
 
The meeting with start at 8 p.m. Eastern time. It will last approximately two hours.
 
At this meeting, the Metropolitan Man will "take off his mask" and tell you about his role in the Deep State. He'll explain the importance of the codeword-secret leak.
 
And he'll discuss what the new Trump economic model will mean for various industries and parts of our country. He'll also explain how he knows the tax-reform/border-adjustment laws are certain to pass Congress and what those policies will mean for our country.
 
If you'd like to attend the meeting via our live webinar, you can listen online for only $19.95.
 
Yes, that's right. $19.95.
 
This is easily the most important and valuable meeting I've ever arranged. It has taken more than a decade of work to gain access to information like this... And I want everyone to benefit from the incredible access we've gained.
 
Please do whatever you must to be at this meeting. There isn't a more important event you could attend this year.
 
Regards,
 
Porter Stansberry




Further Reading:

The "Metropolitan Man" warned Porter about irresponsible government policies back in April. Porter listened... and came back with invaluable insights on how to boost your returns, even if stocks go down. Read more here.
 
Big economic changes can propel some stocks higher... and send others crashing down. Recently, Justin Brill highlighted a retail giant expanding into an $800 billion market – while investors dump shares in a failing industry. Get the full story here.

Market Notes


A BIG UPTREND IN ORTHODONTICS

Today's chart highlights a company that helps with your smile...
 
For some people, achieving "the perfect smile" means years of painful and unappealing orthodontics. But "invisible" orthodontics is changing that entire process – with clear, custom retainers that gradually shift patients' teeth over time...
 
The leader in invisible orthodontics is Align Technology (ALGN). It produces the popular Invisalign system. Patients prefer Invisalign retainers' appearance and flexibility (you can remove them whenever you want). Clinicians have used this system to treat more than 4 million patients to date. And the company continues to make new developments... Earlier this month, it announced a teen-friendly product that aligns teeth while moving the lower jaw forward.
 
As you can see below, shares of Align Technology have thrived over the years. Today, they're hitting new all-time highs. The company recently reported a record $1 billion in revenue for 2016, up nearly 28% year over year. As people continue to shift to invisible orthodontics, ALGN's uptrend will likely continue...
 

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