The past 3 years has presented us with a wave of populism derived from referendums, elections, political events and the rise of the far right and the far left. This is not only bound to the UK but it is being witnessed across the globe, predominately within the western world. Brexit, Trump, Corbyn, Sanders and Le Penn to the events playing in Venezuela, North Korea, the Philippines and Turkey. The globe has witnessed a rapid rise in far right patriotism and protectionist views combined with the rapid rise of far left views based around nationalism, equality and anti-establishment agendas. All these events and movements have created an atmosphere consisting of a ‘demand for change’ and a shift towards an equal economy and a more fairer society. We are currently residing within an environment consisting of liberal open society advocates meeting patriotic protectionist advocates. One thing that can be sure said is that this wave of populism has created a major divide amongst nations and societies and even communities. From America to the UK to Turkey to France, Germany and even east Europe. Yes, it’s a fact, populism is global.
PERVERSION OR ORGANIC???
BREXIT WAS NOT AN ANTI-ESTABLISHMENT AGENDA, BREXIT WAS AN ESTABLISHMENT AGENDA. THE ANTI-ESTABLISHMENT VOTE AND WAVE IS WHAT WON THE LEAVE VOTE FOR BREXIT, WHICH WAS AN ESTABLISHMENT AGENDA.
TRUMP IS NOT ANTI-ESTABLISHMENT, TRUMP IS PART OF THE ESTABLISHMENT. WHAT GAVE TRUMP THE PRESIDENCY WAS THAT HE RODE THE ANTI-ESTABLISHMENT WAVE.
The above statements sound nuts don’t they? Yes indeed. However the fundamentals behind them bare some sort of common sense. A referendum that was created by the establishment sector within the Tory party and run by ex-bankers, ex-traders, insurance millionaires and funded by hedge fund managers, is not a vote against the establishment, it is a vote induced by the establishment. And now it is apparent that avoiding the ECJ tax crackdown, the devaluation of the pound and a 250 billion monetary policy package were very good reasons behind Brexit. A billionaire surrounded by bankers, oil barons and hedge fund traders is not a person viable to put the people before the establishment, who tend to be bankers, oil barons and hedge fund billionaires. This is a president who is literally part of the establishment yet gained presidency via the anti-establishment wave and vote.
So, my conclusion is that western modern populism is now being engineered by the elites and democracy is the vehicle behind this sort of, as one can say, ‘backing from the people’. No wonder why the recent youGov poll showed that 40% of Brexit voters would be happy with a recession, just to make sure Brexit is a success, WOW. They are literally giving the top dogs a free pass. And this is why we believe the £250 billion monetary policy package, just for Brexit, did not witness negative press like the bailouts did in 2009. If that package were to be released today, the backlash from it would be immense and the irony is that the ‘EU remain’ side did not seize upon this event, talk about economic shock therapy on steroids. We just hope the masses realize the agendas behind these democratic events and maybe a pure organic mainstream media that is not monopolized might help that but hey, small fish in a big pond as some may say. So basically modern populism is a movement to keep an eye on and democratic exercises are also events to watch out for. For T.U Markets, we would love more Brexit and Trump events, the market are subject to volatility during these events and we know, volatility is a trader’s best friend. Although the social effect is not as good as the effect seen in the market so time will show us the long term political and economic effects derived from the events of the past 18 months.
Gold, bitcoin and put options within the portfolio are a good hedge against this populism wave. Currently the wave is dyeing down however the sleeping giants have been woken up, so one must always be cautious around the market because these giants tend to hold a hammer consistent of a powerful wrath against the state of the market. Tread careful and keep an eye out for these events.