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Sunday, 10 December 19:56 (GMT -05:00)



Business And Politics News

Trump’s Victory Won’t Bring Russia Any Good, Expert Says


According to Steen Jacobsen, chief economist for Saxo Bank, Donald Trump’s victory doesn’t necessarily mean that the Russian economy is going to benefit from that.

 

 

 

 
Mr. Jacobsen assumes that those who say that Donald Trump’s victory is a nightmare for America are completely wrong. His victory showed an urgent necessity of radical changes in the USA. Today, the USA is living in a world with the lowest labor productivity, the highest social inequality, the lowest interest rates and inflation, and the most inflated stock market in history.
If the latest U.S. presidential election had been all about candidates' personalities, and politics, neither Donald Trump, nor Hillary Clinton would have managed to become even candidates.
 

 

Frankly speaking, it’s not Donald Trump who won the election, it’s just his opponent Hillary Clinton who lost it. The thing is that most Americans saw Hillary Clinton as the candidate who would have continued Obama’s policies if she had won the election. She was seen as the living picture of the U.S. political elite. That’s why the Americans voted for changes. That was the key reason why they let Donald Trump win. 

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You can definitely say that these are not the best changes possible. However, Mr. Jacobsen assumes that Trump’s victory may well bring positive changes since this unexpected event made it possible to change the situation with ultra-low interest rates, as well as the economic policy, and to improve the labor productivity and so on.  Now it seems to be the right time for economists and businessmen to take the lead and be in charge of the country instead of politicians. That’s why Mr. Jacobsen feels more optimistic than 13 years ago. Today’s situation is worse than back then, which is why there is only one way, and this way is to a better future. Simply put, the electorate decided to risk this time and choose a Republican instead of seeing another Democrat as the 45th U.S. President.
 
As for emerging economies, they are seeing tough times, the expert says. Given the existing uncertainty and volatility, investors are likely to reduce exposure and even quit risky investments since the U.S. Dollar now looks more reliable than Brazilian, or Russian assets. Consequently, the American national currency is likely going to get stronger in the near future.

On the other hand, the Dollar cannot stay strong for a long period. This means that in 2017, the USA will face the challenge associated with economic growth. Most likely, this is going to happen within the first 100 days of Mr. Trump’s presidency. The U.S. economy is on the verge of falling into recession. If that’s the case, the U.S. economy will definitely drag the entire global economy into the same recession as well since the USA is still number one economy in the world.
 

 

As for Russia, the USA may cancel the sanctions against Russia since Donald Trump treats Russia as a potential partner rather than an enemy. If that’s the case, this is going to definitely have positive impact on the Russian economy. Still, it’s too premature to say that Russia will benefit from Trump’s presidency.  In particular, Saxo Bank anticipates a stagnating Russian economy, with a still weak national currency around 58-60 rubles per dollar. 

 

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Bitcoin Market Cap Exceeds $150 Billion

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American Sanctions Will Cut Investments In Russia

Some experts say that the next round of anti-Russian sanctions imposed a couple of weeks ago is going to undermine the Russian economy. In particular, they are threatening the investment capital inflow.

 

 
A few weeks after Donald Trump reluctantly signed the new sanctions approved by the U.S. Congress, Russian and foreign investors are still trying to figure out what the actual consequences of this decision are going to be. For now, they seem to have understood enough to be afraid of long-term negative consequences for their existing or potential investments in the Russian economy, which has just started recovering after a 2-year recession.
 
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