THE TIDE IS TURNING
permanent “America first” mentality (even if it’s a “PG” rated version rather than Donald Trump’s “R” rated iteration), companies and markets will suffer. Maybe the United States and its investors continue to be extravagantly lucky – like an old-timey movie’s blindfolded drunk who miraculously misses getting flattened by a falling safe, weaves through traffic untouched, and doesn’t misstep when he’s on a tightrope. How to Invest in Our Current Reality But what about Joe Biden? The new president-elect will be an evening mug of warm milk predictability compared with the Day-Glo Tequila Monster Triple Headache that has been Trump’s swamp-upending, ally-insulting, incompetent-authoritarian, explosive impulsiveness and volatility. The problem, though, is that the toothpaste is out of the tube... The U.S. has shown what it can be and what it’s capable of. Once you’ve experienced Dr. Jeckle’s Mr. Hyde, you know he lurks under the surface, and it’s just a question of time before he’s back again. Four, or eight, or even 20 years of calm, predictable decency won’t put to bed the notion that the United States is one election away from bringing back a Mr. Hyde.
So the U.S. stock market derates to emerging market valuations... the sun sets on the dominance of the dollar... and “America first”-style hard power is the only currency of American power: It sounds like a tough time to be an investor in the United States. Or... maybe the United States and its investors continue to be extravagantly lucky – like an old-timey movie’s blindfolded drunk who miraculously misses getting flattened by a falling safe, weaves through traffic untouched, and doesn’t misstep when he’s on a tightrope. The equivalent of that would be the chasms that divide the American electorate miraculously heal, allowing for sensible legislation and quiet elections, and the de- politicization of much of the American economy... a restoration of faith in the global leadership of the United States and the U.S. dollar... and a return of a more benign and less dog-eat-dog global environment. But it probably won’t unfold like that. The Great Man has changed the course of the supertanker of state. Whoever is the American president, we now live in a different reality. And you should also have a financial Plan Z in place for whatever American foreign policy or the U.S. dollar brings to your door. That should include... Gold It’s the best long-term store of value of any asset. It’s fantastic disaster insurance – when bad things in the world happen, the price of gold rises. Gold benefits from the Federal Reserve printing lots of cash. When the value of the U.S. dollar weakens
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November 2020
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