What a difference a week makes. Two weeks ago we were in a nuclear standoff with North Korea’s mad dictator. Then just a week later the nation was plunged into a “crisis” over a few thousand – or is it a couple of hundred? – Klansmen and Nazis, which had the smartest people in government, business and politics refighting the Civil War. Kim Jong-Un and his sycophants in Pyongyang must be laughing themselves silly, or kicking themselves for backing down.
Image Courtesy of AP
If all we have to worry about is a bunch of Klansmen and Nazis parading in the streets, things must be pretty darn good in the United States. So intelligent investors shouldn’t be overly alarmed and go about their business, as they seemed to be doing by the end of last week.
Then again, this phony outrage has nothing to do with racism or hate or statues of Confederate generals. It has everything to do with President Donald Trump’s enemies trying to remove him from office.
Whether they will be successful or not remains to be determined. But last week’s events certainly should leave us a little concerned, since we learned a little bit more about who Trump’s friends are, and who he can count on for support if things get worse.
Indeed, if you’re one of the vast majority of investors who believe in the Trump agenda of tax, health care and regulatory reform and infrastructure investment – or those who have been happy to have been swept along for the ride since last November 7 – maybe you should be more than a little concerned about what’s in your portfolio.
As the nation’s first Third Party president, Trump doesn’t have a whole lot of support he can count on to get his agenda passed, but he has even less now. He certainly has none from the Democrats, but not a whole lot either from his “fellow” Republicans. It certainly can be argued that, among Republicans at least, it’s in their own political interest to get the Trump agenda passed. But I wouldn’t necessarily count on that.
If there’s anything we can count on from the Republican Party, it’s cowardice; indeed, the higher the officeholder, the more cowardly the politician. If anything, they can be counted to deliver the fatal blow to their supposed allies.
Trump does, however, still have lots of support among the millions of people who actually voted for him in November. Whether that’s enough to carry the day remains to be seen. Trump supporters know that, like Yogi Berra, he really didn’t say everything he said last week. His detractors only heard what they wanted to hear, or thought they heard, or simply put words in his mouth when that didn’t suffice.
Treasury Secretary Steven Mnuchin said much the same thing in a statement on Saturday night in response to calls for him to resign to protest Trump’s response to the violence in Charlottesville, Va.
“While I find it hard to believe I should have to defend myself on this, or the president, I feel compelled to let you know that the president in no way, shape or form believes that neo-Nazi and other hate groups who endorse violence are equivalent to groups that demonstrate in peaceful and lawful ways,” Mnuchin said. About 300 of his former Yale classmates from more than 30 years ago had posted a letter online Friday asking Mnuchin to resign.
That followed the rumor last Thursday that Trump’s leading economic advisor and possibly Federal Reserve Chair-in-Waiting, Gary Cohn, had resigned in protest. That rumor, which turned out to be just another piece of fake news, temporarily unsettled the financial markets, boosting prices of Treasury bonds.
So at least two senior financial people in Trump’s cabinet managed to keep their heads when all about them were losing theirs, including the heads of some of the largest and most influential corporations in America, who deserted Trump at the first sign of controversy.
Should investors hope this latest kerfuffle eventually blows over and things return to relative normalcy? Or is the beginning of the end?
If you didn’t know it by now, the next three and half years – if Trump can hold out that long – are going to be like this. So get used to it. Trump haters are never going to stop trying to remove him from office. It’s been their goal since November 8. The problem now is that more of his supposed supporters are turning their back on him, if not actively working against him.
If that unnerves you, then probably the safest place to be is in good, high-quality bonds. Or just take all your money and put it in the mattress.
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INO.com Contributor - Fed & Interest Rates
Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.