NATHAN’S THOUGHTS ON A TRUMP PRESIDENCY
As Donald Trump settles into his new post at the White House, many people are asking what will this mean for Australian real estate? Nathan shares his thoughts below.
AN “INTERESTING VICTORY” THAT CAUSED STOCK MARKET INSTABILITY
According to Nathan, Trump’s triumphant entrance into US presidency was an interesting victory that caused concern for a lot of people.
Against all odds, Trump made his way into the establishment and is now leader of the most powerful nation in the world.
This threw instability into the stock market, with almost everything dipping into the red at first.
Commodities were still in the green as investors turned to less volatile stock. Although the dust has now settled, it was a sign that the market sees commodities as a safe bet in an international economy with Trump at the head.
TRUMP AS A LEADER
Trump is well known for his frank style of communicating and refusal to adhere to political correctness. Despite this quality, which many people find confronting and even alienating, he has made it into office.
He is now a president who doesn’t have to worry about political correctness while he focuses on making “what is right” as he sees it.
Will he stick with his guns? Has he still got more surprises? Time will tell.
TRUMP’S PLAN FOR THE US ECONOMY
Nathans says, Trump’s economic plan appears to be focused on bringing industry and jobs back to America.
While it has become an international trend to export production to countries such as India and China. Trump wants to bring production back home to the US.
Trump is a protectionist and wants to reshape America’s trade agreements to favour American business. This could be detrimental to some economies, such as China, which is already straining to find enough consumers for its production output.
This could also put political strain on relationships between the two countries. A lot of foreign interests could be withdrawing their money from the US and diverting it to Australia, as we represent a stable economy with an attractive commodity and resource sector as a backbone.
Trump’s presidency is also likely to affect international trading agreements that were wrought while the US racked up trillions of dollars in debt during the GFC.
Possible outcomes of the new Trump order
• Stock market volatility
• Foreign money being taken out of the US
• An increase in foreign investment in Australia
• Increased mineral prices as investors focus on commodities as a “safe haven”
• Another mining boom in mineral rich Australia.
WHEN INSTABILITY ABOUNDS, INVESTORS LOOK FOR SAFE HAVENS
Nathan says, during the GFC of 2008, some bread and butter properties went up in value. He attributes this to the stock market instability that prompted investors to look for a safe haven in which to park their money.
Australia has a fairly insulated economy and well-regulated financial sector. This means that in times of uncertainty investment capital is attracted to our shores.
WILL AUSTRALIA BE AFFECTED BY GLOBAL ECONOMIC INSTABILITY?
Nathan says, he thinks Australia will be protected from any financial instability stemming from international shores.
While Australia remains rich in minerals and resources, the possibility of another mining boom is on the cards as investors choose commodities in favor of more volatile stocks.
As foreign money exits the US, investors will look for other countries in which to invest. Australian property may appeal to investors as a safe haven in which to park their money.
Nathan say he remains optimistic about the result of the US presidential election and is very interested to see how things play out over the next few years in the word of finance. He feels Australia is once again in a position to be insulated from any negative fallout.
How do you think Trump’s victory will affect the global economy? Please share your thoughts in the comments section below.
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