TOUGH TIMES AHEAD

TOUGH TIMES AHEAD

Trump's policies will trigger the economic growth, and in turn, this growth will trigger inflation. And when the increase in debt is added to this, interest rates on bonds rose. The interest rate hike has strengthened. The strong dollar has forced gold to sink. Copper reflects the best of the developments. Growth-sensitive copper prices have risen more than 18,61 percent since 21102016.

The US presidential election ended like Britain's Brexit. The British elector turned out to be a more independent, anti-immigrant and economic protectionist policy by voting for the UK's departure from the EU. The Americans also led the United States in the same way by voting Donald Trump, an anti-globalization, insurgent, and conservative candidate.

If the promises in the election process are to be passed on, or partly implemented, the United States will be at the beginning of the process of isolation from the world economy. During his campaign, Trump promised that he would cut taxes, undertake infrastructure investments, bring American companies back to the United States, build skyscrapers with American steel, and set a wall in front of immigration and free trade. He sold his idea well and took his presidency.

Next is the referendum in Italy. It will be followed by the elections in Germany, France, and Netherlands in 2017. We will see that those who criticized today the US electorate by saying "How did the Americans chose this guy" will bring to the power their Trump. With this political wave coming after the global crisis, the world is rushing to the conservative politics in full speed. If everyone becomes inward, the results are obvious. It's like we're going through a cycle where globalization and world trade will take a hit.

If Trump succeeds in applying his promises, the American economy will win, but the rest of the world will lose. China, which can not sell its steel, will probably not keep the US Treasury paper in its possession. We can live the most severe phases of trade and currency wars in the coming period. This will bring about great turbulence and volatility in the world economy, financial markets and capital flows.

If Trump can fulfill its promises, public investments will increase, budget deficits will grow, private sector spending will increase, and growth and employment will increase. This is best reflected in copper prices. It is the most sensitive metal to growth, and it rose 18,61 percent since 21102016. The triggering of the growth will bring inflation.

Today's projection of inflation on the horizon is in the form of rising interest rates. As the interest rates increase and the policies will be implemented, the capital will be sent to the United States and the dollar will appreciate in value. As the dollar rises, other major currencies, and moreover developing country currencies, will depreciate in value.

US interest rates constitute the basis for the rest of the world. With the increase in the rates there, the interest rates of developed and developing countries are increasing as well. Country risks are rising, like it happened in the recent weeks. The first guiding against Trump's wind could be the FED again, through its speech or interest rate decision in December. But whatever happens, we have entered a period of high turbulence.

A NEW AREA IN POLITICS, GLOBALIZATION AND MONEY

A NEW AREA IN POLITICS, GLOBALIZATION AND MONEY

The US, presidential elections were won the Republican candidate Donald Trump. Two major factors influenced this.

First, Trump responded to the desire for change from the wider community after the global crisis. The image of "advocating America first" with the emphasis on protective politics, the walling and immigration prevention on the Mexican border, the image of shaking the current system with style and rhetoric has met a section of the need for change. The reaction against the FED, Wall Street and current status quo also reinforced this image. These rhetoric and attitudes jhave encompassed the unemployed, the low income, the broader sections that did not benefit from globalization and suffered from the crisis.

Secondly, the fact that the Democratic Party has been in power for two periods and that it has to change the presidential candidate due to the two-term rule is also an important handicap. The new presidential candidate Clinton was in front of the US public for a long time. She was not new as a face and was worn out. She did not say anything new either. FBI investigations of the e-mails from the Ministry of Foreign Affairsand and her health problems have also been handicaped her. She represented exactly the status quo and was defeated. With another candidate, the Democrats could have won more votes, but this could not be sufficient to win the presidency anyway.

We see that a global trend that started with Brexit in the UK and with the US selection, it is getting more clear. This trend is an anti-globalization, a nationalist and local trend that encloses countries and economies. It is due to the demands of large segments, who did not benefit from the benefits of globalization, to get more share from the economy. This can only be done under authoritarian leadership, with the determination and compulsion of the leader who is closer to the people. In the elections to be made in major countries after the UK and the US elections, we can see this in more or less the same way. The disturbances created by society and the deterioration of the distribution of income by globalization and the crisis are becoming more and more evident in the elections. Voters' orientation of politics in this way may not only increase the momentum and protection of globalization, but also increase the public weight in the economy. More statist approaches can come to the forefront.

It is difficult for the central banks to maintain their abundant and cheap monetary policies in the face of this change in the global political conjuncture. Anyway, when the signs from here are played out, it is possible that the period of abundant and cheap money ends with the influence of the developments on the side of politics. The large and inexpensive money that was launched against the crisis and sustained for 8 years did not favor the large masses. The prices of financial assets and real estate have increased, as the abundant liquidity created by the central banks were mainly used by the financial sector. Wealth and capital grew more and more. Now, the broader societies want politics to put an end to this situation.

Considering this situation, it would be more destructive for the medium and long-term effects compared to the initial impact of shocks in the markets in the short-term. Since 2008, the volatility of financial markets has built-up and moved on an artificial ground at high altitude. But it is also a big blow to the abundant and cheap money structure. The demolition of the structure will take some time.