"US Election Resonates with The Simpsons"
As we approach what is hopefully the final week of the US election, the situation remains tense. Early-vote data indicates that Trump is still in the running, a fact that is causing some concern among certain media outlets. It's worth remembering the time when New York was a fan of this show.
USA Today has chosen not to endorse a presidential candidate, a decision mirrored by the Washington Post. This has led to threats of resignation from key staff and the cancellation of 200,000 subscriptions. In response, owner Jeff Bezos wrote an op-ed in which he acknowledges the lack of trust in journalists and the media. He argues that presidential endorsements create a perception of bias and do nothing to influence the outcome of an election. There are rumors that Bezos is planning to hire more conservative journalists to balance the paper's coverage, which could indicate his prediction of the political climate.
Wild Policy Promises
As we get closer to the election, policy promises are becoming increasingly extravagant. Proposals include $25,000 checks for first-time homebuyers, tax incentives for small businesses and young families, massive US tariffs, 10 new US ‘freedom cities’ on federal land, mass deportations, and a reworking of America’s food and pharma industries. Trump has even suggested that taxes on cryptocurrency should be abolished and replaced with tariffs.
The Simpsons and the US Election
In many ways, the US election is reminiscent of an episode of The Simpsons. The show once featured a plot in which the Rand Corporation, in conjunction with the Saucer People and under the supervision of reverse vampires, forced parents to go to bed early in a fiendish plot to eliminate dinner. It seems we are in a similar situation now, with the election taking unexpected and somewhat surreal turns.
Structural Changes Looming
The election could result in significant structural changes for the US and the global economic and financial architecture. If Trump were to introduce a 'US crypto' and ban 'foreign crypto', this could lead to a US trade decoupling from the rest of the world. This would make the dollar harder to obtain for global exporters, while making it easier to obtain onshore if Trump decides to set rates along with the Fed. If he were to use a 'Trump-coin' as a new form of US-only liquidity, the US could see an inflationary boom while the rest of the world experiences deflationary doom.
Market Reactions
The potential for these changes has already had an impact on the markets. Oil prices were up and US 10-year yields were marginally down in Asia, but the previous day saw oil prices plunge and US yields move higher. These fluctuations could be a sign of what's to come as the international political-economy pivots or even fragments.
German Auto Giant VW to Close Plants
In other news, German auto giant VW is planning to close three plants, resulting in the loss of thousands of jobs and a 10% cut in salaries. This is in line with the "slow agony" that Draghi warned of, and which is now becoming a reality.
German Election
The upcoming German election is unlikely to feature the same wild election promises as the US. However, without a move towards the 'Draghi revolution', or away from a Germanic obsession with balanced budgets, it is unclear what the mainstream parties can offer voters that differs from their current policies. This could provide an opportunity for populist parties.
Chinese Stimulus Clues
Meanwhile, in China, some money managers are using data compiled by a Chinese ex-dissident living in Canada to predict when the government will introduce stimulus measures. The theory is that when social instability rises too high, the government will respond with financial stimulus. China's Standing Committee of the National People's Congress is scheduled to review the State Council report on financial works from November 4-8, coinciding with the US election.
Irony of Stimulus Measures
Ironically, if both China and the US were to introduce large stimulus measures, the resulting inflation could lead to market shocks and a rise in Western populism.
Bottom Line
The US election is proving to be a spectacle that is both fascinating and somewhat surreal. The potential for significant structural changes in the US and global economic and financial architecture is a real possibility. What are your thoughts on this? Share this article with your friends and join the discussion. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.
"US Election Resonates with The Simpsons"
As we approach what is hopefully the final week of the US election, the situation remains tense. Early-vote data indicates that Trump is still in the running, a fact that is causing some concern among certain media outlets. It's worth remembering the time when New York was a fan of this show.
USA Today has chosen not to endorse a presidential candidate, a decision mirrored by the Washington Post. This has led to threats of resignation from key staff and the cancellation of 200,000 subscriptions. In response, owner Jeff Bezos wrote an op-ed in which he acknowledges the lack of trust in journalists and the media. He argues that presidential endorsements create a perception of bias and do nothing to influence the outcome of an election. There are rumors that Bezos is planning to hire more conservative journalists to balance the paper's coverage, which could indicate his prediction of the political climate.
