My Top Stocks for the Coming "Fiscal Dominance" Rally
The money printer is about to go "brrr"...
Have you ever heard of modern monetary theory—or MMT?
It’s a controversial economic idea that says the government can spend as much money as it wants—essentially printing money to fund deficits—as long as inflation stays under control. The idea is that taxes aren’t needed to fund spending, just to manage inflation.
Put simply: the government lets the “money printer go brrr” until rising prices force it to stop.
Back in February 2019 when I was the senior analyst at Mauldin Economics, I dismissed MMT as a fringe, left-wing fantasy. But now, in a twist no one saw coming, a version of it is playing out under a Republican administration—thanks to Trump’s “Big Beautiful Bill.”
Only this time, it’s being framed as fiscal dominance—a situation where massive government borrowing forces the Federal Reserve to keep interest rates low, whether it wants to or not. That was the subject of a recent Wall Street Journal report… and it’s something every serious investor should be paying attention to.
Because this shift isn’t academic—it has real implications for markets… and your portfolio.
When the Fed Bails Out Uncle Sam
Fiscal dominance happens when the government’s borrowing needs effectively force the central bank to keep interest rates low—whether it wants to or not. Instead of the Fed setting policy to manage inflation or unemployment, it’s boxed in by fiscal policy—namely, financing massive deficits.
That’s exactly what we’re seeing unfold right now.
Trump’s “Big Beautiful Bill” triggers trillions in tax cuts. But here’s the kicker: these cuts aren’t being offset with spending reductions. They’re being funded with unprecedented borrowing, which puts huge pressure on the bond market—and forces the Fed to step in.
This dynamic—where fiscal priorities dominate monetary policy—is classic fiscal dominance.
We’ve seen this movie before… just not in developed markets. It’s a common story in emerging economies like Argentina, where bloated deficits compel the central bank to suppress interest rates, monetize debt, and print money to keep the government afloat. But the U.S. has done it too—during World War I, World War II, and the late 1960s. And now it’s happening again, not out of wartime necessity… but to fund tax cuts and entitlement spending.
Whether you think that’s a good idea or not is immaterial It is happening.
And it dovetails perfectly with the “stimulus wave” thesis I’ve been writing about for months, and there are a handful of stocks we’re holding to profit from it.
That includes a new position we’re going to buy today.