Benjamin J Butler: I invited my friend and new advisor to the Emerging Future Institute, Alexander Shulgin, to comment on the upcoming Presidential election and the financial market ramifications. Being a global expert on media and investment, I thought he might give us a useful perspective.
Alexander Shulgin: This is surely an unprecedented election; perhaps the most followed in history and certainly taking up more airtime than even the Olympics. Actually the Election-2016 reminds me of a scripted and somewhat predictable reality show:
a). There is an epic contest
b). The audience is betting on different outcomes
c). It’s being streamed on all 5 continents
d). There are villains and heroes and heroines.
e). There is drama, betrayal, new twists and turns, sex and tears.
In the story of the Titanic, after hitting the iceberg a huge hole appeared in the side of the boat. The passengers were not aware of the fatal problem, but the captain was. And he ordered the orchestra to play louder and louder to cover up the problem. There was only one form of entertainment to cover up the issue, today the media has many.
I could list a dozen more obvious similarities to TV products in the global spectacle titled “Election-2016.” However, this is not article by a TV critic, I still intend to make a forecast.
The most important question for the mass audience this week as we approach the final episode is: Who will be the winner?
But does it really matter who wins in a reality TV?
I will avoid flowery explanations in my scenarios so I don’t invite too much controversy. I think one can apply the logic of the current financial and economic situation. The backdrop – about which I have previously written – is that I am expecting 2017 to be a tough year economically. In fact, it looks like a recession might commence in about May 2017 give or take 2 months. Or if you take a wider corridor, in the March-August 2017 period. So lets look at some scenarios with this in the background.
So, we hear a drum roll, the winner is ….
Scenario 1: Trump. The population votes for Trump as they are upset about the economic fallout from globalization. Markets immediately enter a nosedive.
Scenario 2: If the winner is Clinton, we see a big market short covering. Markets gallop for six to nine months and then we enter a deep correction.
Ultimately Trump will be proven to be correct about the economic situation. The markets will have exhibited what is called a “false break out” on Wall St.
Scenario 3: An exogenous event demolishes the elections (a terrorist attack or something). In this case, the electorate might assume that this was engineered in order to prevent Trump from getting access to the levers of power.
Personally, I think scenario 2 is the most likely, a short term win by Clinton (but ultimately a Trump win).
As you can see, Trump’s position on this chess board is pretty good. Even if the candidate loses the election, he wins. But if Trump wins, it is not Clinton that loses: it’s the USA. In fact really there are no winners, but just one loser the USA – this is idea. I do not say that Trump is winner . It actually doesn’t matter who wins the election , She or He, the matter is that the country will loose , because of that ‘hole from the iceberg ”
The nation is already divided going in to this election. but once the economic and financial markets start to crack, and joblessness rises the fault lines will be further exacerbated between some might say the rednecks who came to the US 200-300 years ago and the newcomers who arrived 50-70 years ago. It seems like a very challenging period ahead.
BUT THE SHOW MUST GO ON!
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