By Nick O’Connor – Capital and Conflict (Great Britain) –
Well. That just happened. Donald Trump is the next president of the United States.
I’m not here to talk about party politics. And to be honest, opinion on who might be the best president is pointless now. Trump has won and now we get to see what he actually does and what actually happens.
You have to invest for the world as it is and not for as you may want it to be. I have notes from our in-house experts Eoin Treacy, Tim Price and Charlie Morris on what’s happened and what that means for your money coming up, in just a second.
But first, what does a Trump win tell us about the way the world is? Whether you’re a Trump fan or not, it’s clear he’s a political outsider and outlier. He’s anti-establishment. What makes people look outside the political mainstream in such a way?
Ironically, I think perhaps it was Bill Clinton who got it right. Yesterday I saw a leak of a speech he gave last year in which he talked about the UK political scene, particularly Labour. Here’s what he said, with added emphasis from me:
And they moved to the left and put his brother in as leader because the British labour movement wanted it. When David Cameron thumped him in the election, they reached the interesting conclusion that they lost because they hadn’t moved far left enough, and so they went out and practically got a guy off the street to be the leader of the British Labour Party, who I saw in the press today said that he was really a British citizen and had real British (inaudible). (Laughter.)
But what that is reflective of – the same thing happened in the Greek election – when people feel they’ve been shafted and they don’t expect anything to happen anyway, they just want the maddest person in the room to represent them.
That’s not exactly how I’d put it. But it’s certainly true that when people feel “shafted” they’ll do things they may not normally do. (And things they may not talk publically about, meaning they don’t show up in the polls until the day of an election.)
Why do people feel shafted? A full answer to that question is probably outside the remit of this letter. But my suggestion is that it comes back to a fundamentally unsound monetary system that allows the state to create money out of thin air and inflate asset prices. Incomes stagnate and assets inflate. That creates division. Division leads to discontent. Discontent leads to unusual, outlier events.