Trump will do everything for the stock market
And this time, the especially creative plan: Trump's children:
Trump is building a new capital injection engine for the stock market, and children are driving it:
Yes, children.
Sounds a bit strange, let's dive deeper:
More than 60 million children became stock market investors this week.
What looks like another savings plan for children could eventually become a significant capital injection mechanism for the US stock market.
The US Treasury Department completed the automatic registration for "Trump accounts" on October 1.
More than 60 million children received an account awaiting activation by parents.
And this is the part to pay attention to:
Children born between January 1, 2025, and December 31, 2028, are eligible for an opening deposit of $1,000 from the federal government,
Additionally, up to $5,000 per year can be deposited into the account,
with family members also able to contribute deposits.
But the money doesn't sit as cash under the mattress.
The accounts are invested in broad index funds of US stocks, with the default fund tracking the S&P 500 index.
That is, the government is not just giving children money, it is bringing them into the US stock market system.
And here begins the interesting math:
Take a child who receives $1,000, and the money is invested for 18 years.
With an average annual return of 8%, just $1,000 turns into approximately $4,000.
But if the family adds the full $5,000 annually, the picture changes dramatically...
In a scenario of $5,000 per year over 18 years and an average return of 8%, the account could reach approximately $200,000, even before the child has started their adult life.
In a scenario of continued investment over decades, the numbers could reach hundreds of thousands of dollars or even more.
And this is exactly the game Trump and the Treasury are trying to create: an entire generation that begins life as a stock market investor.
And what does this mean for Wall Street?
If tens of millions of American children hold accounts invested in US indices, a potential flow of new money into the stock market is created over the years...
This is a mechanism that can generate structural, consistent, and long-term demand for US stocks.
The account is opened for the child, parents deposit, grandparents can deposit, the employer can deposit,
and the money is expected to remain invested for years.
Upon the program's launch in July, Treasury Secretary Scott Bassant said that 38% of American families are currently not exposed to stock markets, and that the goal is to reduce this gap over time.
But the psychological effect may be even greater:
Once an American child holds a fund that tracks the leading index on the stock exchange, the stock market stops being something that belongs to "people on Wall Street"...
It becomes part of the family, the child sees the account grow, parents see the deposits, grandparents can add money for the grandchild,
and the family gains a direct interest in the continued growth of the American economy and its large companies...
And this can create a significant cultural shift regarding stock investment:
More belonging, more recognition, more activity.
This could be very, very beneficial for large brokers, especially those involved in the program like Robinhood
Note the enormous scale of the project:
More than 60 million children were automatically added to the system!
Tens of millions of families are now receiving infrastructure that connects family savings directly to the US stock market.
If over the years a significant portion of families do deposit regularly, Wall Street gets something investors particularly love:
A buyer who doesn't get tired, doesn't go on vacation, and doesn't try to time the market, not weak hands.
Just like a pension, but from age zero!
And this is perhaps one of Trump's most bullish moves for the stock market.
Not because of the money coming in today, but because of the possibility of building an entire generation that automatically buys stocks over decades...