The victory of an extravagant businessman in the US presidential election has caused division and confusion in the ranks of the Americans. The whole world was also shocked by such an unexpected victory.
Trump defended the interests of the losing influence of the white population of the United States under pressure from immigrants from Asia, Mexico and South America and American business, which also lost ground under the onslaught of competitors from Asia.
In his books, he described in detail that Asians oust Americans, manipulate currencies in order to gain a competitive advantage over American companies.
After coming to power, Trump promised to end this and took action immediately and met with strong opposition from the Democrats and the authorities of other countries. His isolationist policies also sparked resentment among the old elites.
Trump launched a trade war with China, as a result of which sanctions were imposed on a number of Chinese companies. All of this hit world trade tangibly.
Nevertheless, under Trump, the US stock market began to grow rapidly and reached historic highs.
As you can see, after the victory of Donald Trump, the US SP500 broad market index only grew and grew by more than 75%. The prices of many shares have increased significantly.
But at the same time, Trump aroused fears among a huge part of the US population and the whole world. With his voluntaristic policies, he scared many and can be judged by the price of gold – a defensive asset, how concerned the elites were with his policies.
When something bad happens in the world or instability increases, then gold prices tend to rise, as demonstrated by the prices of the yellow metal, having risen more than 75% during the Trump administration.
Trump’s dictatorial habits, his attempts to quarrel with Iran, China, Russia led to hatred of him from supporters of the Democratic Party in the United States and some of the world’s elites. It all ended with the storming of the American Capitol by heated thugs, Trump’s supporters. All this caused a shock among the Democrats and former US presidents commented on these events as unworthy of a democratic country. After that, Trump’s political career can be given up and his era ended there.
Let’s try to guess what will happen next after the Trump era. How will financial markets behave in the future?
First of all, I want to turn my eyes to Japan, a country that in 2012 launched a new course called Abenomica, aimed at weakening its yen currency and buying up government bonds. In order to raise inflation from the deflationary zone. As a result, the Japanese currency rate was dropped by more than 50%.
Trump has repeatedly mentioned in his books that the Japanese and Chinese are manipulating the rate of their currency in order to gain an advantage in the American market and that he intended to fight against this.
As you can see from the picture with the dollar versus yen graph, the Japanese quieted down and waited for most of Trump’s term, trying not to provoke the anger of the new US president – the yen rate slightly strengthened against the dollar.
It is likely that after Trump the Japanese will start a new cycle of the yen weakening and bring the USDJPY rate to 140-150. The Japanese stock market, which began to recover very vigorously in 2020 and almost reached the peak levels of the 90s, may receive additional stimulus for growth.
New US President Biden is likely to lift all sanctions against China and end the trade war against China, with the result that Chinese companies could also grow many percent. In addition, the Chinese can also start cheating with the exchange rate of their yuan and weaken it a little.
Gold has grown actively throughout the Trump presidency amid growing fears in his policies. After the news of the storming of the Capitol and Trump’s refusal to fight for power, gold went down sharply. This process is just the beginning. The world has nothing to fear after Trump is kicked out of the presidency of the United States, which means there is no longer any point in gold, so they will actively get rid of it, prices may drop to 1200-1000.
The US stock market is overheated, there will probably be a deep correction, but then the growth will continue – 4000-5000 at SP500 on ointment. World trade is no longer threatened, which means the SP500 will continue to grow.
Russia may have problems after Trump’s departure, even greater than under him. Deeper sanctions will cause the ruble to fall to 120-140 per dollar. But Russia faces a new perspective – Putin’s departure from power. Independently or by reason of death – this will cause the ruble to weaken to monstrous values.
Here, perhaps, such prospects are opening up after the departure of Donald Trump.