At this point in time, it is fair to say that most of us would rather have Trump in the White House than another Clinton. After all, better the devil we don’t know than the devil we know we can’t live with. We do long for the day when we can see inaugurated to the highest offices in the land honorable and good men such as Darrell Castle and Scott Bradley, whom the Constitution Party put forth during this recent election. But that time is not yet….
But what might we expect now? Can we expect anything to fundamentally change for the better?
For what it is worth, the price of gold has fallen dramatically since the election. That was indeed a surprise to many, as before the election, the price of gold dropped when Clinton rose in the polls, and rose when Trump rose in the polls. But now that he is elected, gold has fallen. Go figure. Perhaps it is due to Trump’s suggestion that the Fed raise interest rates, as typically the price of gold has fallen at the slightest hint of a rate hike.
After an entire campaign of struggling against the entire power structure in this country, including the machinery of his own party which did all in its power to throw the election to Clinton, a campaign replete with endless invective and promises to “drain the swamp,” Mr. Trump did the unexpected. Upon giving his acceptance speech, he did not put the “Establishment” on notice that he was coming for them. Rather, he held out the olive branch. He declared peace, and asked his former opponents to work with him. Gone were the insults, the seeming bigotry, and the brashness. By most accounts, he sounded downright presidential.
Then, as the days passed, he softened his stance on repealing Obamacare. Perhaps he’ll want to replace it with the equivalent of Romney-care, not that that would be much of an improvement. But my money says that even if he tried to rid the country of that ill-begotten beast, the Republicans in Congress would find a way to prevent it. That is, after all, what Republicans in Congress do. As pro and con are opposites, so, it has long appeared, progress and Congress are opposites as well.
Moreover, it appears he has set himself to recruiting Washington insiders to his transition team. Now, this transition team may not be permanent staff, but their influence in choosing permanent staff will remain. It would appear that the swamp he pledged to drain has become a recruiting ground for those who would be expected to find the people to drain that very swamp. One may justly suspect that swamp will be with us for quite some time.
To give Mr. Trump his due, it appears he has placed a ban on putting active lobbyists into his administration. Fantastic! Further, some of his picks for major posts seem to be pretty good. And then, some others, not so much.
Mr. Trump has on the one hand pledged to cut our taxes, but on the other hand, he has pledged to spend perhaps a trillion dollars more of our money by building or rebuilding our infrastructure on a rather massive scale. That ought to be good for commodities, at least. The price of copper rose close to 15% right after the election. Apparently there is some anticipation going on. But this seems rather like strangling the chicken and expecting higher egg production at the same time.
Even with all the new money “printed” up as the TARP program and the various QE programs played out, it seems the Fed, through its policies, has been able to keep the bulk of that money out of the “real economy,” and consequently, we have not seen the sharp increase in prices that usually accompanies such an increase in the money supply. But with higher interest rates at the Fed, which Trump seems to be calling for, that might change. Perhaps we might expect a sharp and significant increase in prices if the Fed raises interest rates significantly.
And then there is the possible problem that, since the “establishment” failed to get the candidate they wanted through the election, it would not be inconceivable for these people, through establishment or control and manipulation of various policies (interest rates, reserve requirements, trade policies, etc.) to cause sufficient earth shaking to bring down or severely damage the financial and economic house of cards that has been built up over the years. The blame for all this, of course, would be laid at the feet of Donald Trump, thus eliminating any chance of a second term for him (remember Jimmy Carter), and crippling his first term in office in the process. We might expect such a reaction if Mr. Trump truly did set about to “drain the swamp.”
Bottom line at this point is, we really don’t know what to expect from Mr. Trump. Neither do we know what to expect from either his friends or his foes. We are truly in uncharted waters here. We may hope for the best. But with experience as the lamp by which our feet are guided, we expect that in the final analysis, little will improve, and much will worsen.