How Will Trump’s Win Affect Financial Wealth in Dollars and Cents
The polls are closed.
The votes are counted.
And the United States of America has elected a new president.
While there’s a lot of wailing and gnashing of teeth in some quarters of media-dom, that’s not the case here. I have to hand it to two of our gurus, James Dale Davidson, editor of Strategic Investment, and Total Wealth Insider’s Jeff Opdyke, both of whom went on record many months ago predicting a Trump victory.
And now that the Trump victory is in the history books, what’s it mean for our financial wealth? Read on, because both gurus have strong opinions on that too…
James told his newsletter subscribers as early as April that Trump was a force to be reckoned with. The title of the article, “The Deep State Gets Trumped,” pretty much says all you need to know.
“Donald Trump will shake up Washington more thoroughly than any president elected in my lifetime or yours. For instance, the U.S. now spends more than every other country combined on the military. And our stated expenditures are really only about half the real costs. No one but Trump has the gonads to take this on.”
Basically, as James noted in that same edition, people will finally turn to Donald Trump because “it’s finally dawned on them that otherwise their vote possesses in the end not the slightest positive influence” — because of the overwhelming influence of powerful lobbying interests.
Likewise, our Total Wealth Insider editor Jeff Opdyke also predicted a Trump victory in an article we published here on July 26: “Don’t Underestimate Trump.”
52% to 48%. That’s my prediction. For the 2016 president election in November. And the winner will be: Donald J. Trump.
Having watched Trump’s Republican nomination acceptance speech, I completely understand his appeal. I see why certain segments of the American population gravitate toward him as savior of all that they hold to be right and true with America. When I finally changed the channel to watch reruns of The Big Bang Theory, I knew I’d just seen the first major speech from the next president of the United States.
The Meaning of Trump in Dollars and Cents
James Dale Davidson laid out in broad terms two months ago what he sees for a Trump victory in the financial markets:
I would not be surprised to see the Federal Reserve raise interest rates to underline their bogus theory that the economy is strong. Soon thereafter, however, a recession will be declared. The establishment will try to ring-fence Trump and make him the scapegoat for the inevitable decline of the economy. I expect the dollar to decline on a Trump win. Gold and silver will rally. A Trump victory could rally Russian ruble bonds.
I’ll note here that the dollar declined markedly election night, precious metals spiked higher, and Russian assets look somewhat better too, though we’ll have to see whether these turn into long-lasting trends or not.
Last night, as Jeff Opdyke saw the election surprise play out on his screen, he sent along some big-picture financial advice that he wanted me to share here with you:
- The U.S. dollar is likely to weaken again. It weakened for several months after the December rate hike last year when investors realized soon thereafter that the Fed had made a mistake. It strengthened in recent weeks on expectations of a December rate hike this year, but now that that’s all but dead, the buck will again roll over.
- Gold is a key asset to own. Gold moves opposite of the dollar, so a weakening buck will put air in the sails of gold. Moreover, if we do get that recession that I expect, then the Fed will either resort to “helicopter money” or negative interest rates to keep the economy from completely crashing. That’s positive for gold, and I expect we will see gold press toward $1,500 an ounce this year.
- Interest rates will fall. And that means we will remain in a low-rate world for even longer. I bet we don’t see a rate hike in 2017, and possibly not even in 2018. As such, relatively safe income from the stock market is pretty much the only option that exists — and among those income payers, some of the very best are outside America, which is why global stocks will likely outperform U.S. stocks next year.
So there you have it. Great calls by both of our gurus. And good advice (though they get a lot more specific in their communications with our paying subscribers) to keep in mind in the weeks and months to come.