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Dear Fellow Traveler, While in Tahoe, I wrote about how foreign funds were buying up American infrastructure. Americans pay the tolls for the things they built. But then something remarkable happened. Union Pacific and Norfolk Southern announced a landmark $85 billion merger. This deal will forge the next iteration of an American transcontinental railroad, connecting more than 50,000 route miles across the nation. This is one of the first times in my career that I get to write something bullish about American infrastructure that isn't linked to pipelines. This isn't just another deal. This is about regenerating the great American backbone of commerce. The Lincoln VisionOver 160 years ago, the Pacific Railroad Acts was passed. Now, we'll finally see the transcontinental railroad envisioned by Abraham Lincoln. The 1869 railroad vision required scargo handoffs between companies and cities. This merger would create a seamless rail system from coast to coast. The new network would span 43 states and more than 50,000 miles of track, linking distribution centers to nearly 100 ports. Perhaps most interesting, it can reduce in the bottlenecks forged in Chicago. It will reduce highway congestion, reduce the wear-and-tear created by the trucking industry on the highway system, and put American companies back in control of this industrial need. The Numbers That MatterBest of all, this is American capital investing in American infrastructure that helps American workers and consumers. This deal could fuel tens of billions in economic value creation as it expands capacity. Today, these companies invest approximately $5.6 billion annually in infrastructure, innovation, and network expansion. Unlike those foreign-owned toll roads that extract rent from existing infrastructure, this is about building and expanding our existing infrastructure. Remember, I warned about foreign governments owning our "rails" while we pay the tolls? This deal can flip that narrative. Rather than having Americans pay fees to use infrastructure we didn't build, we get investment in safety, service quality, and efficiency. Trains transport autos, retail goods, food, and energy products, as well as raw materials and parts needed to run America's factories. The combined company has little to no overlapping routes, which means this isn't about reducing competition; it will hopefully create it. This will allow the country to compete with Canadian railroads that are trying to win back U.S. freight volume and boost American jobs. While foreign sovereign wealth funds have been quietly buying our existing infrastructure to extract rents, American railroad companies are investing billions to build capacity and compete globally. This is the kind of infrastructure investment that builds wealth rather than just harvesting it. Will It Happen?The deal still needs regulatory approval. That said, the companies are aiming to close by early 2027. The regulatory environment has shifted dramatically. The key test will be whether this merger enhances competition and serves the public interest. One hopes that given the complementary nature of these networks, that case seems strong. If you own Union Pacific stock (UNP), you're positioned to benefit from what could be the most transformative infrastructure deal in decades. If you own Norfolk Southern (NSC), you're getting $320 per share in a cash-and-stock deal that represents a 17% premium. Beyond the immediate investment implications, this represents something more important. America can build and expand rather than sell off its industrial capacity. That's not just good for railroad shareholders. That's good for America. Stay positive, 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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