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.