Worldwide Financial Planning’s Peter McGahan with his post election analysis
By Peter McGahan, owner of Worldwide Financial Planning
In a world full of social media ‘memes’ it appears most weren’t expecting this result.
It didn’t surprise me that many found it surprising.
Afterall, the previous day I went on record showing how the press had positioned Trump and his chances and how that was indeed false through skewed communications and polls and that he would indeed win on the data I was looking at.
In this noisy world we often don’t get to read the correct data.
The press is no different. We were clearly all misled by Mrs Clinton’s sponsors but it was clear Mrs Clinton was actually the problem.
She didn’t know where America’s pain was and the social media genius as pointed out by Artificial Intelligence (eagle eye), showed his attention to the small stuff, to the real stuff, walking around construction sites and talking to people which won the day.
We were told by her media sponsors, people were stupid – perhaps we didn’t understand their pain. Some never will.
People are tired, sick of lies and corruption, and, the fact that 70 per cent of the electorate didn’t trust Mrs Clinton, should have been a clue.
Mr Trump became a quick champion for their frustrations, for the families who just can’t feed themselves and they showed that at the polls. The more the media lied about him, the more the disconnected Clinton called his supporters deplorable, the more they wore ‘adorable deplorable’ T-shirts and joined with others.
His opinions and actions have been deplorable but Mrs Clinton hadn’t realized how transparent she was.
The world appears to be rebelling now against the elite and their tax-free regimes with enforced austerity on others and this result has demonstrated that. She was the cog of that establishment and didn’t understand that politics is about people and they were sick, sick, sick and tired. A view echoed around the world.
She didn’t understand them and those calling them stupid probably don’t either.
At 3am I sat looking at the dollar v the peso and could see what was going to happen. Watching all the Americans raising their voices knowing where it was going, I saw their anger and divide and thought. He needs to quickly speak and pull this country together or this will be a meltdown.
His speech was conciliatory and magnanimous from beginning to end. At 8:05am UK markets turned north after a four minute downward spiral and have remained there. The New York stock exchange is about to open and trading remains heavy and orderly but the dollar, which has been trading all day, is fine.
Trump did what he had to do to win. I don’t like it, nor him, but I’m sure my feelings are irrelevant as this is where we begin.
Having sat right through it all, making notes of everything that was said, I was comforted. This could have been a chance to unleash the demons, the chance, Brexit-like to be able to tell whoever you want what you thought, but Trump grabbed it and calmed markets.
The country is divided. The world appears that way. People don’t talk to each other or communicate or learn. They have beliefs and sit with people with the same beliefs and others are threats to their beliefs. Already lost readers who think I’m not being anti Trump enough. People ‘unfriend’ or block anyone who doesn’t match their beliefs. They disagree with them. This isn’t how its supposed to be.
Trump’s speech, without a script, polish or perfume, said exactly what I wanted to hear to narrow these fault lines. He ignored the shouts for ‘lock her up’ and other aggressive chants and took me completely by surprise and world stock markets responded immediately:
“The forgotten will no longer be forgotten”; “ Rebuild our infrastructure to make it second to none”; “It’s gonna happen,” and then the thunderbolt:
“Let’s get along with all nations willing to get on with us; Let’s deal fairly with everyone seeking common ground partnership not conflict.”
He just gave everyone hope at last.
Then he finished with “to be historic we have to do a good job, our work on this movement will now begin”.
And it then transpires my questions on my notes were being answered. He has already put together his foreign team last Thursday. He is ready.
He thanked Clinton, explained they should heal the wounds between them and as “president of the people” walked off.
Markets rallied immediately – to my great surprise.
And what does that mean moving forward?
I think you can forget the rate hike in December in the US and rate hikes for 2017 will be lower too so the dollar is less attractive in that respect.
Trump is likely to be spending heavily on infrastructure plus a fiscal stimulus through tax cuts.
As government borrowing is therefore likely to rise you might therefore expect yield curves to rise too.
Remember also that 50 per cent of the US treasury market is foreign owned and they have been heavy sellers of this over the last six months particularly those insulted (China and Japan).
Trump wants to roll back Nato spending. His reason: We can spend that money on infrastructure and employing American labour. Why does he need foreign military bases when he can defend his country from home is his thoughts?
On foreign stocks, Trump opposes the horrible trade deals such as the Trans pacific partnership and the TTIP trade deal. This is a global winning decision but will hurt those corporates who were rubbing their hands with glee.
Trump is the enemy of the banks. He knows the system better than most and is capable of playing with them, afterall he’s been nailing them for years.
He says, and it’s a great idea, that he would like to rebuild the economy in this positive way, to have the disenfranchised working and rebuilding the country and using the money used above, more wisely.
Expect therefore to see a greater focus on domestic led activities and companies in the US at the expense of free trade and globalization which appears to be battered from all sides.
However, and it is a big however.
Consider we have a referendum on the Italian constitution next month. Next year we have elections in France and Germany.
The UK and USA do not have the monopoly on disgruntled voters and all of this could have a very profound effect on the Eurozone project and Euro.
A Le Penne victory could point straight to the Frexit and that would probably be the end of the Eurozone.