Trumponomics still a disturbing mystery
Chances are Trumponomics might be bad for SA — in ways that go beyond his antitrade, anti-aid bias, writes Hilary Joffe
The shock election to the White House of a racist, misogynistic bigot with an ambivalent relationship to the truth had the most extraordinary effect on financial markets. Perhaps it’s because traders and analysts are programmed to look for opportunities even in the most trying of situations, but far from being concerned about Donald Trump’s victory, many instantly persuaded themselves that he was some kind of fiscal and monetary saviour, with answers to the problems of slow growth and ultra-low interest rates that have plagued the US and other advanced countries. US equity markets that were tanking during the count at the prospect of a Trump win, suddenly rallied. The dollar strengthened (while emerging market currencies tumbled). The prices of commodities such as copper shot up. But so, too, did the yields on US government debt. Yields rise as prices fall, as they did in the wake of Trump’s triumph amid a sell-off of US government bonds that reflected expectations that the US fisca...
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