Why Today’s 9% Spike Is Only the Beginning
Fidel Castro is dead.
On Friday, the longtime Cuban politician and revolutionary passed away. He was 90 years old.
Castro spent more than half his life governing Cuba. He was one of the world’s most well-known leaders of our time, and one of the most polarizing.
Some considered him a freedom fighter. Others saw him as a brutal dictator.
Castro was also a fierce critic of the United States. He butted heads with 10 U.S. presidents during his lifetime. And while he officially retired in 2008, he told Cubans to not trust Americans up until his last breath.
Thanks to Castro, relations between the U.S. and Cuba have been tense, to say the least. In fact, the U.S. has had a trade embargo against Cuba since 1962. For one, the U.S. government put the embargo in place during the Cold War. At the time, Cuba was an ally to communist Russia and was stationing Soviet missiles on its soil.
And while the Cold War ended 25 years ago, the embargo still restricts Cuba from trading with the U.S. It prohibits Americans from directly investing in Cuba. Americans also still need permission to visit Cuba.
That said, relations between Cuba and the U.S. have improved recently…
• Last year, the U.S. and Cuba reopened embassies in each other’s capitals…
Then, Obama flew to Havana, Cuba, this past March. He became the first president to visit Cuba since 1928.
The White House also recently lifted its 50-year tourism ban on Cuba. And Cuba’s government plans to scrap a 10% tax on converting U.S. dollars to Cuban pesos.
A few months ago, the U.S. Department of the Treasury gave two major U.S. hospitality companies permission to operate in Cuba. Starwood Hotels & Resorts (HOT) will build three hotels in Cuba. It will be the first U.S. company to operate a hotel in Cuba since 1962.
Many people now think the U.S. could soon lift its 54-year trade embargo on Cuba.
• Casey Research founder Doug Casey thinks Cuba’s economy could thrive if this happens…
Doug wrote last year:
In reality, the embargo has just been a silly, destructive, and massively inconvenient public relations scheme. The Cubans have been at liberty to buy anything in the world they wanted over the last 55 years, including American products, as long as they didn’t buy from an American. They lacked goods not because of the U.S. embargo, but because they simply didn’t have the money to buy from anyone.
But the cat’s out of the bag and the embargo is soon going to be history. And I expect growth to be hyperbolic.
• Major U.S. companies are lining up to profit from Cuba’s untapped potential…