The US Vice Presidential Election and The Future of USD

This post was published first in and reproduced with permission.


We know that the US elections is affecting more people than ever this time when Singaporean and Malaysian taxi drivers have their favourite candidates, following a global mindset or just a brief hiatus from local government bashing ?

And we know the US elections is affecting Americans in a big way when they deviate from candidate polling to stress polling with a “recent online poll found 52% of Americans are simply stressed out by the election” and gave it an official name of Election Stress Disorder that manifests in “difficulty eating, sleeping, conflict, internal anxiety”, resulting in “fight” or “flight”. And we can suppose many Hispanic Americans and refugees would be terrified of a Trump victory after his promise to build the wall to prevent illegal migrants.

It is impossible to be prepared for the outcome of this one for sure because the level of mud-slinging has made uncredible characters of both potential leaders of the US for the next 4 years.

My personal feelings about the US presidential elections is that it should be more of a Vice-presidential elections instead because the choice of the Vice President is more important this time than ever given the scandalous baggage surrounding both candidates has heightened the possibility that neither would survive the entire term, health aside, even if they are both in the top 5 of the oldest candidates in history.


Vice Presidential candidates

vice presidential candidate


Who would blame the Vice Presidential candidates for failing to hog the spotlight with their running mates riding high on the scandal bandwagon ? The VP debate on 4 Oct was the least watched debate since 2000 and as it turns out, 3 out of Trump supporters wish Pence was running for the top job instead of Trump.

And with the spotlight on both candidates indiscretions and character flaws, few are paying attention to their proposed policies ! In fact, it is reported that in the final Presidential debate, “Trump and Clinton spent perhaps one minute of a 90 minute event on tax policy” and “Americans are learning far more about Donald Trump’s sex life and Hillary Clinton’s emails than about their respective policy agendas. This may seem strange since our actual lives would be affected far more by their economic policies than by the personal issues that seem to dominate every news cycle.

Election Anxiety and Taking It Out On The Mexicans

We have this anxiety taking a toll of complacency on financial markets that area already under strain as we read about hedge funds feeling like “it appears to be a feeling of being trapped in an investing world that no longer makes sense” as conventional indicators of market place stress fail to work these days as the human instinct fears the unknown.

Markets are not functioning, largely ignoring the central banks as the “risk-on/risk-off” meter swings between the news of the latest polls with USDMXN, the unwilling victim of Trump’s “wall threat” as the best hedge for a Trump win with the USDMXN 1M volatility highest in history except for the financial crisis and the Mexican Peso the worst performing currency after the Sterling Pound in the world this year.

Table of Global Currencies vs USD year to date

wcrs 4nov16


Chart of the USDMXN

Not knowing, not wanting to know, burying your head in the sand is not a strategy, to me, at least. Watch and waiting is what the rest of the market is doing, raising cash levels to highest since 9-11 in 2001.


global fm cash levels

The main takeaway we have from both Trump and Clinton is that they are only going to have to win over the people who hate them over after the elections. It is becoming clear that policies will be geared towards nationalism(protectionist) thereafter and that the US has lost the respect of many of her allies, and allegiances along with it as the Philippines and Malaysia turn towards China and Iranian President Rouhani sees the US elections as a vote between a “bad or worse” candidate.

Breaking Report by the Peterson Institute : link
The US Vice Presidential Election and The Future of USD


Methinks the USD will be gradually be losing its global clout, as countries pare back on the QE and the global political map changes in the months ahead.

And I am not really sure if China is devaluing on anticipation of strength to come or to boost its GDP, but either way they have a proper president, I will not be a big fan of the US dollar going ahead or until the Vice president takes control ?