By Eric Sepanek
This year’s unprecedented election has finally wielded results: In an astounding move by the American public, billionaire non-politician Donald Trump, famous for his gruff approach on the reality TV show “The Apprentice” and his love of gold, has just been elected President of the United States. Trump’s platform has been heavily built on disrupting the system, both politically and economically.
What does this shocking victory hold for the next four years? How will gold prices respond?
With President Trump now at the helm of the ship, it’s anybody’s guess what he will actually do.
Will he follow through with the promises of his campaign?
Trump appears to have no contributing special interest groups to pay off when he takes office. His campaign has been aimed at bringing down corruption in US politics. The question is: how will he handle the Fed, and the recurring rescue of the US Stock market? The stock market is believed to be grossly overvalued. Without the unlimited support of the Fed to continue to offer free money at an unprecedented rate, what will become of the US stock market? If the stock market corrects, interest rates will either have to stay at or near zero, otherwise will they go into negative rates like Europe?
Will Janet Yellen be able to keep her position under a Trump presidency? Will Yellen continue to try and hold rates where they are? The Fed has been all talk and no show when it comes to raising rates.
Will Trump renegotiate our international agreements? Trump has made pledges to make the members of the U.N. start paying for their side of the deal. Liberals believe that this is bad for international relations, which could be true in the beginning, but truly they should have been paying all along. So, what type of circumstances might arise when these nations have to start paying for their own defense?
NAFTA and the Trans-Pacific Partnerships will definitely be put on the chopping block, we would assume. What types of plans will replace them? What type of conflicts will arise if the special interest groups are not catered to?
With $20 trillion of US debt, will Trump make the business decision to declare a dollar bankruptcy? Is BK our best way out of this mess? Is a return to the gold standard on the horizon? What does this mean to the value of the dollar and your savings?
How will the billionaire club react to Trump’s presidency? They’ve fought hard to prevent it. Will it be battle of the billionaires? How will this impact our overall economy? What does that mean for all of us?
The reality of the economy is bigger than one man. The direction of our country has created some catastrophic problems and in order to fix them we are going to feel some turbulence regardless of the solution. You can’t fix a bullet hole without leaving a scar. How much opposition he receives from Congress will also play a big role. If he truly ends the corruption of Wall Street, then the stock market will feel the impact as it falls back to a more realistic number. Capitalism is not a system based on entitlement. It is an economic form of Darwinism. The strong will survive and the weak will fall. If we get back to our roots, we will have to expect changes on Wall Street and a major correction is imminent! If he assigns a new Fed chair, that will be a major role in the direction of our currency. We are in uncharted waters and the printing press might not get us out of another bust. The Fed is obviously fresh out of ideas and has been for some time. Could Trump find the talent that is needed to help guide the ship?
It’s truly unprecedented and unpredictable. Whether a fan of Trump or not, it’s clear that whatever moves he makes will upend the system as we know it – or that’s what his campaign has promised, anyway.
Either Way, A Recession Is On Its Way
According to Global Macro Investor founder, Raoul Paul, (along with plenty of other analysts) a recession is already on its way, regardless of the outcome of the election. Consider this astounding statistic: Since 1910, 100% of all two-term elections have had a recession within 12 months. As we’ve mentioned in previous newsletters, a 2017 recession seems fairly clear on the horizon, even before Trump was elected.
What will happen now that the Trump wild card has been pulled?