Why the 2016 Election is Economically Volatile
by Dean Heskin
Presidential elections by their very nature are volatile. They can be contentious and unpredictable. Despite the projection of the pollsters or the predictions of the pundits, no one can really say for certain who will prevail on Election Day. One of the greatest risks to the global financial markets is uncertainty and the US election of 2016 has been jam-packed with anxiety, bewilderment, and surprises.
Not only is a two-term incumbent leaving office but the nominees of both major political parties are some of the most polarizing candidates in recent memory.
Hillary Clinton, the former first lady turned politician, has served as US senator and Secretary of State under the current administration. Her public career has also been racked with scandal - from Whitewater, Benghazi and the State Department emails, to the Clinton Foundation’s questionable dealings. Polls indicate that most of the country finds her dishonest, and there is strong evidence that she recently failed to tell the truth to Congress under oath.
Clinton is considered a “known entity” but what do we know? We know she will likely continue much of the policies of the Obama administration.The economy is not growing, wage growth has stagnated, wealth inequality has increased, poverty has soared, Obamacare is imploding and the national debt is now approaching $20T.
Donald Trump is the brash businessman outsider. He’s a political newcomer whose nationalist policies favor tight borders, strict immigration control and dramatic trade reform. Trump has called out Mexico for the tides of illegal workers that impact American jobs as well as China for the currency manipulation that impacts American industry. He wants to build a wall on the US-Mexico border and he wants new tariffs on Chinese goods so US manufacturers can compete.
Trump has threatened to scrap NAFTA and TTP and to slash US funding for NATO and the UN. His “put America first” policies have been called a protectionist, a nationalist and a racist. The opposition has portrayed him as ill-prepared, irrational, and even dangerous.
Both candidates come to the Presidential race with tremendous baggage and high unfavorables. According to recent surveys, the voting public sees both Clinton and Trump as deeply flawed and untrustworthy which is creating unprecedented anxiety for investors across the country and around the world.
Let’s not forget that US elections where no incumbent is running also bring an entirely new White House staff. We will not only anoint a new Commander in Chief in November but also usher in new people and policies with direct economic implications. The prevailing candidate will appoint new cabinet members and committees that will impact tax rates, regulations, the national debt, federal budgets, Social Security, Medicare, health care, funding of the military, the fight against terror and the general tone and mood of the country.
It’s interesting to note that the US economy entered a recession around the time of both previous non-incumbent elections in 2000 - George W. Bush’s first term - and 2008 -Barack Obama’s first term. So it appears no matter who wins in November, history tells us the economy is poised to lose.
So the choice this election may very well come down to “Fear of the Known versus Fear of the Unknown” and both scenarios spell volatility. There is perhaps no better time to diversify and protect your savings against election panic and fiscal uncertainty than right now. Gold and silver have made historic gains in 2016, and may be an ideal way to keep your money safe from Wall Street anxiety and the uncontrolled actions of first-term presidents.
Call 1-800-289-2646 or click HERE for our three COMPLIMENTARY 2016 reports: The 2016 Gold Report, The 2016 Silver Report and the 2016 World Money Report.