Peaky Blinders to Address Unsustainable US Finances
Macro Outlook
SUMMARY
· The United States now recognize the unsustainability of their large deficits and heavy debt load.
· Donald Trump’s election campaign was focused on a broken system that needed fixes.
· The fixes are taking pages out of the mob and professional wrestling playbooks; unlike in the movies, the USA can be the bad guy.
Unsustainable USA
The United States have been in an unenviable financial situation since the end of COVID with a deficit to GDP greater than 6% (that previously only occurred during recessions – see below)
and a debt to GDP above 100% (that only happened briefly after WWII) which is projected to grow to more than 150% by 2050 as we can see in the following graphic.
The System Needs Fixes
Donald Trump ran as an outsider in 2016 but he did not govern as such during his first presidential term; his win was a surprise and he did not have political experience. This irritated him and he doubled down for the 2024 campaign by running as an angry outsider. Now, that he has returned to power, he is moving fast with a cabinet designed to escape previous consensus. He is more than willing to break things on the way.
The Mob Playbook
Donald Trump grew up during the golden age of the New York mafia from the 1940’s to the 1970’s. One of his biggest mentors was Roy Cohn, a prominent lawyer with deep ties to the mafia. Roy Cohn taught him to attack, never apologize and counterpunch harder.
His second term as President started on January 20th, 2025 and we are already seeing major changes in positions and tactics from the United States looking to shun the current system.
How a Mob Boss Operates
A mob boss (also called a "don," "capo dei capi," or "godfather") runs an organized syndicate using a mix of business acumen, fear, loyalty, and strategic violence, sounds familiar? Here’s a more detailed description of a typical mob operation:
1. Hierarchy & Power Structure
A mob boss leads a highly structured organization. This is the typical structure of the Italian Mafia (Cosa Nostra). Current US leaders are not criminals but their tactics look similar. If we make parallels to the US government, the roles could be attributed like this:
Boss (Don) – Supreme leader, makes high-level decisions, collects a share of all profits. Donald Trump is the undisputed boss of the United States.
Underboss – Second-in-command, oversees day-to-day operations. Elon Musk has taken that role, so far.
Consigliere – Trusted advisor, often a senior member who provides strategic advice. You could put Robert Lighthizer as the intellectual juggernaut behind the tariffs and Steve Bannon as the mastermind on populism.
Capos (Captains) – Mid-level leaders who manage crews and handle specific activities. Important members of the government team like Russell Vought, JD Vance, Scott Bessent, Howard Lutnick, Chris Wright, Robert F. Kennedy Jr and Susie Wiles play those roles.
Soldiers (Made Men) – The core enforcers: Pete Hegseth, Kash Patel, Kristi Noem, Tulsi Gabbard, Linda McMahon.
Associates – Non-members who work for the organization, often in business or enforcement roles. Fox News, Twitter and Joe Rogan come to mind.
2. Activities & Revenue Streams
A mob boss diversifies revenue streams to maximize profits and minimize risks. In this case, the ultimate goal is to fix the United States financial situation, enriching his family is an important secondary role. Some key operations include:
A. Traditional Activities
Loan Sharking (Usury) – Offering high-interest loans and using intimidation for collection. The idea of 100-year bonds with zero coupon issued to countries interested in protection sounds like loan sharking.
Gambling Operations – Illegal sports betting, underground casinos, and poker games. The more recent examples would be the TRUMP and MELANIA crypto coins.
Extortion & Protection Rackets – Businesses are forced to pay for "protection". The new talking points of the administration is that countries will need to pay for US protection. We can think of NATO, Ukraine, Taiwan and others will come.
Robbery & Burglary – Heists, armored car robberies, and high-value thefts. The claims on Greenland and the Panama Canal come to mind.
Stock Manipulation & Fraud – Pump-and-dump schemes, embezzlement, and Ponzi schemes. Truth Social’s Trump Media and Technology Group (DJT) is an example.
3. Leadership Tactics & Control Mechanisms
A mob boss maintains power through a combination of fear, loyalty, and corruption.
A. Loyalty & Omertà (Code of Silence)
Members swear absolute loyalty and never cooperate with the enemy. The polarization in politics has led toward this kind of behavior.
Betrayal is often punished with death or severe violence. In political terms, traditional Republicans like Liz Cheney, Adam Kinzinger, Anthony Scaramucci and Mitt Romney, among others, have been banished from the Republican Party.
B. Strategic Violence & Hits
A boss rarely commits direct violence but orders hits on rivals or disloyal members.
C. Bribery & Corruption
Law enforcement officials, politicians, and judges are bribed to ignore or protect operations. The New York Mayor Eric Adams, the Tate Brothers are recent examples of people that owe the boss.
D. Influence Over the Community
Many bosses act as benefactors, helping local businesses or individuals in exchange for loyalty. Members of MAGA will be favored. This creates public support.
4. Avoiding Law Enforcement & Maintaining Power
A mob boss takes extreme precautions to avoid arrest and prosecution:
Layers of protection – Never directly involved; orders go through intermediaries.
Using code words– No incriminating conversations.
Legal defense teams – High-powered lawyers help.
Blackmail & leverage – Gathering dirt on politicians, cops, and businesspeople.
5. Dealing with Opponents After Their Defeat
A mob boss quickly consolidates and expands when they win a turf war.
Eliminate Remaining Threats – Remaining loyalists of the rival must be eliminated or flipped. This is what is happening to Democrats since the election.
Internal Cleansing– Traitors or weak links are purged. Mitch McConnell is being shunned.
Absorb the Rival’s Operations – Take over the business of the opponents. Government purge and getting people that were aligned with Democrats to kiss the ring (Mark Zuckerberg, Jeff Bezos)
Historical Models
During a speech at CPAC on February 24, 2024, Donald Trump compared himself to Al Capone. In December 2023 in Reno, in January 2024 in Iowa and in April 2024, in Wisconsin, he compared his trouble to Al Capone. The table below shows the similarities.
But a more representative parallel from the political landscape is Silvio Berlusconi, who rose from a media mogul to Italy’s political leader, with deep connections to the Italian Mafia. The table below highlights the parallel between Silvio Berlusconi and Donald Trump.
The Wrestling Playbook
Donald Trump’s link to World Wrestling Entertainment (WWE) is clear: back in the late 1980’s, WrestleMania IV and V were held at Trump Plaza, where he was featured at ringside. In 2007, he was part of the “Battle of the Billionaires” storyline. In 2013, he was inducted in the WWE Hall of Fame. Linda McMahon has served in the government during his two terms.
In wrestling, you keep your audience captive with uncertainty, feuds and reconciliations. The good guys turn into heels and vice versa. You have larger than life characters, action, drama and gangs, unexpected betrayals, surprises and shock endings where stretching the boundaries is expected.
If we make parallels to recent events, Donald Trump has turned the United States from a global force for good to an unreliable, transactional power. They are trying to switch Volodymyr Zelenskyy from a good guy to a heel and Vladimir Putin from a heel to a victim. There are talks of a New World Order; NWO was a major storyline in pro wrestling during the 1990’s, Hulk Hogan turned into a heel, leaving Vince McMahon (WWE) to join Ted Turner (WCW). By flooding the zone, Donald Trump and his team are stretching the boundaries to see what can be accepted.
BOTTOM LINE
What does that mean for sustainable investors: expect the unexpected. Those that are on the side of power will be privileged as long as they stay useful. From a big picture standpoint, the US government will try to fix the unsustainable debts and deficits they currently run by getting others to pay for it. Within the United States, the internal enemy (Democrats, government workers, the Swamp) will be targeted. Outside of the United States, every country where they have leverage (China, Canada, Mexico, Europe, most other countries in the World that depend on the USA) will be asked to pay in multiple forms (tariffs on exports, defense spending, uneconomic purchases like 100-year bonds at zero rates). Politics is used to tap the entertainment world to attract audiences. Politics is becoming entertainment.