You are a free subscriber to Me and the Money Printer. To upgrade to paid and receive the daily Capital Wave Report - which features our Red-Green market signals, subscribe here. A Railroad... Without AmericaFrom the Railroad Across America… to a Railroad Without America... We used to lay the tracks. Now we just pay the tolls.
Editors Note: Two over par. Not my best day. Oh… I’m talking about miniature golf with my daughter… Sorry… I should have led with that… I just landed in Atlanta on a Red Eye. Wrote all night…
Dear Fellow Traveler: In 1999, the financial publisher who recruited me back to Baltimore told a story about a new railroad across America. It wasn't about trains or steel rails cutting through prairies. It was about fiber-optic cable and an emerging digital frontier. Just as 19th-century robber barons built generational wealth laying steel tracks across the continent, 21st-century investors would strike it rich owning the "rails" of the digital age. The metaphor landed. Fiber optics became the backbone of the internet economy, supporting streaming, cloud computing, and the remote work revolution that followed. American vision. American capital. American ingenuity was laying the groundwork for a new empire. Cisco (CSCO) and dozens of others minted millionaires like a government printing press. American tech giants built the digital rails. Americans… got… rich… But that was then. A generation later, we're still laying tracks. But the average American has been losing their ownership stake. In 1990, about 17-18% of American households owned stock directly. That figure peaked at just over 21% in 2001 (as this digital railroad emerged). Then, it fell to around 14% by 2016. Today, it's back near 17%, still a minority. Most Americans still don't own stock outright. But foreign governments increasingly own U.S. toll roads, pipelines, data centers, and get paid every time you drive, ship, or scroll. About 87-93% of all stock market wealth is held by the top 10%, with the bottom 50% owning just 1%. So when the market wins, most Americans don't. Americans don't own the stocks. Americans don't own the roads. And more than ever, Americans rent everything. This is the new story… A Railroad Without America. Owning Nothing... And Pretending to Be "Happy"Today, the most lucrative "railroads" aren't digital cables. They're brutally physical. America no longer builds and maintains them. We throw money at infrastructure problems like confetti at a parade… Somehow, it all ends up in fiscal black holes or in the pockets of NGOs. You can see the outcomes of spending on the potholes and bridges getting failing grades. We don't build much anymore. We don't make things in this country. The incentives are broken… This is one of the greatest scenes in television history… an entire season of the greatest show ever written… around this one line…  It's easier now for our best and brightest to create a double-leveraged ETF around Palantir (PLTR) stock than it is to open a mine, build a bridge, or put up apartment buildings. Financial engineering pays better than actual engineering. So that's what our smartest people do. U.S. investors are fascinated by the latest meme stock… the newest tech wizard. The AI name that is trading at outrageous multiples. Meanwhile, foreign governments and private equity firms are buying the hard assets that power your life. You know… the actual railroads of modern society. We're talking about the backbone of the American experience…
Many of these stakes are being bought up quietly by foreign sovereign wealth funds (SWFs). The investment arms of foreign governments have one beautifully simple mandate… Extract rent from stable, income-generating assets in the richest economy in world history, and funnel that money back home to build their sovereign wealth. The New American LandlordsHomeownership peaked in 2004 at 69.2%. It now hovers around 65.1%, roughly where it stood in 1990. But for Americans under 35, the rate is just 37.4%. For the lowest-income group: under 47%. So, as infrastructure gets sold off, younger and poorer Americans are locked out of both property and equity. Confidence in banks has collapsed. A 2023 Associated Press poll showed that only 10% of U.S. adults had "a great deal of confidence" in our country's financial institutions. That’s down from 22% in 2020. Gallup's 2024 data shows just 25% of Americans have "a great deal" or "quite a lot" of trust in banks. Confidence is gone. Ownership is concentrated. Foreign funds are happy to fill the vacuum. Today's infrastructure players aren't scrappy entrepreneurs. They're sovereign wealth funds representing some of the world's most powerful nations, controlling over $13 trillion globally. They typically allocate 7% to 8% to infrastructure, meaning $900 billion to $1 trillion is chasing ports, toll roads, data centers… with a lot of it here in the U.S. They're not coming for growth stocks. They're coming for your roads. Abu Dhabi Investment Authority (ADIA) manages over $650 billion and has systematically acquired U.S. toll roads, airports, and energy infrastructure. They own about 25% of a consortium that bought Chicago's parking meter fees for 75 years back in 2008... for $1.15 billion. What revenue is expected from these fees? Over $11.6 billion. Every time you feed a parking meter or pay an airport fee on overtaxed Chicago, there's an increasing chance those dollars are flowing straight to the UAE government treasury. Qatar Investment Authority has $10 billion earmarked for U.S. ports. Saudi Arabia's Public Investment Fund created a $40 billion infrastructure fund with Blackstone to target American assets. We've gone from owning the rails... to paying rent just to ride. What's Actually At Risk Here?That old fiber optic railroad metaphor was about creating new economic value through American innovation. Today's foreign infrastructure acquisitions are about harvesting existing economic value that Americans have already created, built, and depend on. Let's call it what it is: This is economic rent extraction, plain and simple. America built it. We use it. We pay for it. But foreign nations own it. While CFIUS provides review mechanisms for foreign acquisitions, enforcement and oversight remain patchy. And while they build sovereign wealth, we build sovereign debt. Americans pay these fees daily. Americans likely pay tens of billions annually in tolls, utility fees, and infrastructure access costs. Much of that revenue now flows, not to state governments or local repairs, but to foreign treasuries and global infrastructure funds seeking predictable, low-risk yield. How does this impact national security? The U.S. now owes $24.6 trillion globally. We're not just selling off roads and pipelines… we're financing them with borrowed money. Nearly 90% of our entire economy is borrowed from foreigners. We're not just losing the rails… we're borrowing the track. When foreign sovereign wealth funds own significant stakes in ports, transportation networks, and energy systems, they gain influence over strategic decisions. Who controls the logistics grid during a crisis? Who decides infrastructure investment priorities during normal times? Foreign owners will prioritize returns that benefit their home countries… That means export markets thrive over America's domestic needs… The Uncomfortable EndgameTwenty-five years ago, the metaphor was that America would get rich laying fiber-optic cable across the digital frontier. Today, America is broke. Foreign governments own more of the cable, the ports, the parking meters, and the pipelines. This isn't globalization. It's a garage sale. The next question isn't whether Americans can get rich from the next big technological breakthrough. The real question is whether Americans will continue to own the basic infrastructure they depend on every day. Because a "railroad WITHOUT America" impoverishes this nation, one toll payment at a time. Maybe our politicians want this outcome. We'll supposedly own nothing and be "happy." I'm skeptical of that happiness part. But I'm cautious about the trajectory. I remind people to take heed and follow an allocation strategy that embraces wealth protection, inflation defense, and appreciation upside in assets you control. Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.
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