Looking at one week of tweets from President Donald Trump and it is easy to say that with regards to Russia, Putin, China, Canada, Germany and of course Mexico, the world of politics is not at all predictable. Candidate Trump stepped onto the world stage when he made shocking comments about illegal immigrant, sending mainstream media into a fit of rage that has only increased with different subject matter in the past 20 months. This is the new world of politics, the driver of global markets. But it wasn`t always like this. Up until about 18 months ago, and as a result of the 2008 Great Recession, markets were driven by Central Banks, who made sure that markets had significant liquidity and of course, made everyone aware that they would gently unwind this massive stimulus as not to upset markets.
Central Banks are predictable but Politics …. absolutely note. So global markets will surely provide opportunities in 2019 and 2020.
As we see global multi-nationals start to fade away, with the United Nations, NATO, World Bank, World Trade Organization, and G7 all becoming less meaningful in what Mr Ian Bremmer calls the GZero World, in which each country looks after itself, the political shocks will be numerous and nonstop. And the most interesting point is this – after Trump is out of office, these shocks will continue.
At Classiarius, we see the era of Central Bank intervention and supporting markets as coming to an end, and the rise of powerful political personalities coming to the top. Keep in mind that the mainstream media talks about President Trump being a horrible man but in the past 5 years we saw Russia and China elect leaders for life. The Leader-for-Life, Xi in China is never challenged as he can put, and has put, about 2 million officials and business leaders in prison. No one will challenge his power for decades to come.
Big, Powerful, Political Leaders are back and here to stay…