For those who have been following my market-focused articles in the Trends Journal, you’ve got a heads up: you know what’s going to happen before it does.
I am glad for the opportunity to bring you cutting-edge information on the markets, keeping you “in the know” with actionable plans to consider before the market reacts.
In this article, I will outline two scenarios regarding the upcoming election and how the market will respond.
First, let’s put together the current situation in America. Debts and deficits are exploding. In fact, the U.S. budget deficit just tripled – hitting a record high of $3.1 trillion. Meanwhile, the U.S. has spent 90 percent more than it’s taking in. The U.S. trade deficit is surging – hitting an all-time 12-year high as industrial production is cratering. Poverty is skyrocketing, with eight million formerly in the middle class who are now falling into financial destitution.
Last Thursday, the Labor department reported that the week prior, another 898,000 Americans applied for new unemployment benefits. The U.S. middle class is fast becoming extinct.
In the midst of all this, U.S.-based multi-national corporations are stronger than ever, and Wall Street is expecting record high bonuses this year. What we are seeing now is indeed the manifestation of a phenomenon I warned would happen long ago: the creation of a society in America consisting of extreme haves and extreme have nots; a wipe-out of the middle class. This is no accident.
Today, the Federal Reserve is fulfilling the mission it began on its creation in 1913: to be the buyer and lender of last resort; to own it all.
The last two Presidents, especially, are responsible for this… by suppressing rates (which have robbed the middle-class blind of trillions in realized wealth), and calling for more debt and a weaker dollar. Who has benefited from this? Big business!
This week, we also became aware that the Treasury Department privately encouraged banks to prioritize existing clients when implementing the federal government’s Paycheck Protection Program, which benefited medium and large businesses but caused harm to small, underfunded U.S. businesses. Surprised? You shouldn’t be.
Today, America is losing because the middle class is losing on an epic scale.
Election Results and the Markets
Here are the two scenarios regarding the upcoming election and its effect on the markets:
If Biden wins: expect massive debt expansion with a normalization of U.S. trade partner relations. Stocks will vault higher. A normalization of trade relations would boost U.S. industrial production, which is currently cratering, creating more jobs.
If Trump wins: debt will continue to expand although to a lesser extent. U.S. trade relations will remain stagnant and may even deteriorate – a big negative for job creation.
Regarding the middle class, look around, it’s over. As I have explained in previous articles, the middle class has been robbed of trillions in realized wealth via suppressed rates.
America is destitute with debts and deficits out of control. Both Trump and Biden must raise taxes – there’s no way out of this. Any candidate who says he/she will lower taxes is not being honest… but, then again, can you imagine any politician not being honest?
To summarize, America has been sold out to the Fed to inflate the stock market and re-inflate a massive housing bubble, which has created an illusion of prosperity while the economy is actually in collapse. The fact of the matter is this: unless something dramatic happens, the free fall of a free society will accelerate, and tyranny and despotism will be the new law of America.
by Gregory Mannarino TradersChoice.net
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