Consequences of US Election Volatility

The Obvious: Stocks and Crypto Markets

The markets are pricing in uncertainty, and that's a recipe for volatility, those who bag truckloads due to volatity are busy 24/7 before they get ready for Christmas shopping. As long term investors scramble to adjust their portfolios, stock markets are experiencing wild swings. The Dow Jones has plunged while the S&P 500 has erased its gains for the year. Cryptocurrencies, now being touted as a safe-haven asset, have also been caught in the crossfire, with Bitcoin plummeting.

The Not-So-Obvious: Climate, Dollar, and BRICS

But the effects of US election volatility extend far beyond the financial realm. Climate policy, for instance, hangs in the balance. A change in administration will have significant implications for global climate governance. The US withdrawal from the Paris Agreement under a new administration can embolden other nations to follow suit, derailing international efforts to combat climate change.

The dollar, too, is feeling the heat. As investors seek safe-haven assets, the greenback has strengthened, causing ripples in emerging markets. A strong dollar can be a double-edged sword. While it may provide a short-term boost to US exports, it can also exacerbate debt burdens in developing nations and stifle global growth.

Meanwhile, the BRICS nations (Brazil, Russia, India, China, and South Africa) are watching the US election with bated breath. A shift in US policy can have significant implications for global trade dynamics. The BRICS nations may see an opportunity to assert their influence in the global economy, including pushing for a new BRICS currency, potentially reshaping the world order.

The Unforeseen: Ukraine, Israel, and Global Conflict

The US election is also having an unexpected impact on global conflict zones. In Ukraine, the ongoing conflict with Russia has taken a backseat to US election news.

In the Middle East, the US election is being closely watched by Israel, which has relied on US support. A change in administration can significantly impact the Israeli-Palestinian peace process. The US has long been the primary broker in the region, and a shift in policy will definitely have far-reaching consequences.

As we wait for the outcome of the US elections, financial markets are experiencing unprecedented levels of volatility. But the implications extend far beyond the realm of finance, influencing everything from climate policy to international relations. As the great investor, Warren Buffett, once said, "Price is what you pay. Value is what you get." In this case, the value of stability and predictability is what the world is craving. Will the US election deliver?

-CD