A lot of people in Europe start their morning coffee, partially in frustration over US election results. Let us look on the bright side of this election results, that will rock the world at least in the same way that Brexit did. As Nigel Farage put it: „2016 has brought two revolution to us“ or the Ryanair CEO „At least it will be entertaining“ or famous US rapper Snoop Dog, reflecting on legalization of Marihuana in California (that was also voted vor tonight): „let us all take a spliff and relax“.
But: Congratulations to The Donald. The most powerful office in the World is won by a man, who has beaten main street, wall street, media, and last but not least his own party. He has put an end to Bush and Clinton family clan dominance and an end to an 8 year period that has turned the world more un-stable. It is a clear victory for democracy, and I predict, Trump will be a strong President. The people have voted to take their Government back, against all odds.
After nearly 18 months of an extremely entertaining election campaign, here are our main take-aways, of course purely subjective, but being a result from talking to many leaders and great minds:
(1) Trump will be a strong President: presumably winning not only Oval office, but also House and Senate, Trump will have a strong backing to push the political agenda and bring real change. He will turn the energy of all systems to make the US stronger economically, and that will not only be good for the US, but for the whole world. The GOP will be a slave to Trump, as it is purely thanks to him, that they are still in business.
(2) Endgame of party dominated representative democracies: Both Trump and Sanders have proven, that in today’s instant information world, parties have become obsolete. An authentic candidate can gather and engage masses of followers without big infrastructure, party apparatus and political experience. This has also been confirmed in other countries in the recent past. Given the fact that the multipolar party systems have been a stabilizing factor in post WW2 Western democracies, we are only starting to realize what impact this can have on the future of public governance, policy shaping and decision making.
(3) New negative levels of trust: Complete and instant global transparency on mistakes, failures, betrayals and inconsistencies have led to an incredible deterioration of people’s trust in institutions. We do not trust any more, and often we even hate: the establishment, the parties, the leaders, companies (Volkswagen), Islam, immigrants, even the Church. Authenticity and brutal personal branding will be the key political success factors of the future, an Eldorado for the new Populists in this world. But also an enormous potential for changing rigid political structures and red tape bureaucracies, bringing power back to the people. Trump, at least, has not held back with his views, with his flaws, with the human side of him, and he has a personal brand, that is of course not appreciated by everybody, but it is authentic, and that has made him President.
(4) Elections are influenced from outside powers: Media and IT based democracies are very vulnerable for outside influence meddling. As we know, everybody is spying on everybody and now everybody is hacking everybody. Our IT infrastructures and social media are dominated by a handful of players. Both foreign powers and NGOs/companies with IT capabilities wield power in this respect as we have seen in the US elections – and they are ready to use this power for their political objectives. This will be for sure one of the top IT security topics in the coming years.
(5) World will be safer: The world needs a strong US and a strong US leader. In the 8 years of Obama’s (and Hillary’s) foreign policy mess the world has become less safe. It was characterized by a complete lack of political and military coherence and the readiness to throw even long term allies under the bus for short-term PR gain. The Middle East is exploding, the Pacific Strategy imploding and the relation with Russia in a cold war state. Even for creative minds it is difficult to understand how Hillary with her Egypt, Libya and Syria legacy and her failed Russian re-boot could have improved this for the better. Trump will concentrate on the US, and he will only interfere where he sees a long-term benefit for the US. Now there is real opportunity to come to terms with Russia and solve at least some of the burning conflicts. He will however demand stronger contributions from US allies. Arms producers and defense services providers can prepare the champagne.
(6) Economy and Investing: Financial markets will go down in the short-term, perhaps even significantly. This should be welcome, as we have been in a mega bubble state of financial markets, and any development of deflating this bubble without complete crash, should be welcome. There is hope for a re-surrection of real industries, and the containment of financial markets and central banks. With interest rates set to rise (hopefully), Brexit to materialize, China slowing down, and political risk increasing everywhere, there is a high risk that the mother of all bubbles will now find an inflection point to slowly deflate. In the mid-term we would clearly overweight: US, EU (Germany, Spain, CEE), USD/Gold/real estate/industrial assets/agriculture, and preferably direct investments. Avoid: China, Mexico, Latin America, Middle East, UK, Oil.
(7) One last word: We credit the US to be one of the most stable and admired democracies. This was a victory for democracy. Clinton, Bush and Kennedy family clans and all administration and financial market elites have dominated the political establishment for too long. This is a real-world win over cnn, google, mainstream media; and again the polling industry should seriously review its business model. Many players will lose huge money thanks to their forecasts. Now, all eyes on Trump. He has to demonstrate, that he is not a Bully, but a President for all Americans. And he will.
Enjoy your day, God bless America, and may Donald Trump prove all critics wrong and become the best President ever in US history!