“Trump Will Probably Win” Gold “May Rise $100” Overnight
So here we are just one week from the US election. Whilst from afar the daily antics are almost comical, the repercussions on either party winning will be anything but.
Listening to Jim Rickards, Jim Rogers and Dan Denning talk about this at last week’s Great Repression investment conference left you in no doubt. Rickards, whilst saying no one could really tell at this stage, firmly believes himself that Trump will probably get in. He goes on to say that in that event you would see sharemarkets drop 10% overnight and gold jump $100 at the same time. He said the market has fully priced in a Clinton victory (though this was before the latest FBI/email news and polls now having them just 1 point apart and you could see a continuation of the adjustment Friday night that saw gold up and shares down). That said, he believes you could see shares soon recover as the market realises that this guy is going to lower taxes and spend a bomb on infrastructure and a certain wall… After that however, that same deficit funded infrastructure spend will add considerably to their already near $20 trillion in debt... With a Clinton victory we just get more of the same, which the market is getting wary of already with gold still up 21% this year despite the recent correction. He also said Hillary loves a war..
Jim Rogers wasn’t speculating on who would win but was more concerned about the period between the election and inauguration, nearly 80 days of “Leader of the Free World” political no-mans-land at a critical time in geopolitical tensions. Jim was unequivocal, you must own gold and silver.
As we wrote Friday, Dan Denning was actually more concerned about the April French elections. Hollande has a popularity rating of just 4%. His main opponent will take France to a referendum on leaving the EU. You then have German elections in September, again with Merkel’s approval in the gutter and a lot of Germans sick of her EU policies. Both of these are of course after the Italian referendum we wrote of recently here, which could well trigger the same. He believes this could well be the trigger for the next global crisis.
The takeaway from all of this is not that any one of these is going to happen, we simply don’t know that. The takeaway, as was the premise of the whole conference, is that the number of these ‘black swans’ circling at the moment are at numbers not seen in a very long time. It may well happen at any time and you therefore need to balance your portfolio accordingly before it’s too late.