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Rickards: “Expect a Trump Win and Violent Market Repricing”

Saturday, November 5, 2016 8:42
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-- “If you skip this message,” Jim Rickards says in front of the NYC Trump Tower in his urgent new crash warning, “you’re going to miss out on something huge.”

In the video you see below, Rickards makes his boldest prediction yet: Trump will in and the markets will fly off the handle.

Here he is, revealing everything, right in front of the Trump Tower.

Jim Rickards Vid

Click the “play” button to see it for yourself…

The next few days, Rickards says, could make or break the average investor. And it’s time for you to perk up those ears a bit and pay serious attention.

If you’ve been following Rickards for a while, you know many of his predictions are incredibly spot on. For example, he was one of a few lone ducks who famously predicted Brexit before it happened, while the polls consistently leaned the other way.

Brexit Chart

He’s making this prediction now because it’s important to realize one thing: When you wake up next Wednesday morning, for better or worse, the world will have changed.

And you need to be ready.

So, with that said, I’ll spare you the usual ramblings from yours truly. Let’s get straight to the point.

Here’s Jim with his urgent new crash warning and boldest prediction yet…

Expect a Trump Win and Violent Market Repricing

By Jim Rickards

I expect that Trump will win the election on Tuesday. However, that forecast is a close call. The election will be close, and Clinton could win despite my expectation.

What is not a close call, however, are markets’ expectations. All major markets are close to 100% priced for a Clinton victory. If the actual odds of a Trump victory are just better than even money, and markets are priced for sure thing Clinton victory, then we are set up for one of the greatest asymmetric trading opportunities of all time — even better than Brexit.

You can bet on a Trump victory with some very specific trades. I outlined them in detail in an urgent video I recorded in front of Trump Tower in New York City. You should watch it right now to learn more about how to manage your money:

Jim Rickards Vid

Click here to watch now

If Clinton wins, you won’t lose much on these trade recommendations, if anything, because markets are mostly priced for that. If Trump wins, you win big because markets will have to instantaneously reprice for an unexpected outcome. That’s not just my opinion.

Simon Johnson is the former chief economist for the IMF. Johnson is a member in good standing of the global monetary elite. In a project syndicate post he writes, “If investors are wrong and Trump wins, we should expect a big markdown in expected future earnings for a wide range of stocks — and a likely crash in the broader market.”

We agree, but we have no intention of being on the wrong side of that trade. A Trump victory is not nearly the long shot that the mainstream media have been saying it is. You should prepare now.

If you’re a regular reader of my work then you already know that I believe the Fed will raise rates in December — we’ve been saying that for a long time. Now market expectations have caught up and the coast is clear for the Fed actually to do so. Some commentators have suggested that a surprise Trump victory on Tuesday might throw the Fed off its expected path, but it won’t. It is true that a Trump victory may cause stocks to decline 10% overnight.

But when I discussed this at a recent dinner with Bill Dudley, president of the Federal Reserve Bank of New York, he said “it’s not our job” to prop up the stock market. He also said he doubted there was much of a link between last December’s rate hike and the sharp sell-off in stocks in January 2016.

Apart from the election, all other stars seem aligned for a rate hike. The IMF gave the Fed a green light in terms of emerging-market expectations. Persistently dovish voices such as Charles Evans of the Chicago Fed and Lael Brainard, a Fed governor, have either been supportive of a rate hike or have remained silent lately.

The only thing that could throw the Fed off this path would be if a 10% stock market correction from a Trump win turned into a 15% or 20% collapse with global contagion.

However, we expect that once the 10% correction is over, investors will take a second look at Trump’s policies of low taxes, less regulation and big infrastructure spending and like what they see. This means stocks may stage a post-election rebound soon after any correction.

In addition to listen to watching urgent pre-election warning and recommended strategy, I also advise you to maintain a significant position in cash. The “big money” seems to agree with this advice. Mohamed El-Erian of Allianz, one of the world’s largest insurance companies, and former co-head of the world’s largest bond fund, PIMCO, is recommending cash. So are portfolio managers and analysts at Eaton Vance and numerous other large institutions. The reasons given include uncertainty surrounding the U.S. elections, overvaluations in stock and falling bond prices as interest rates begin to rise around the world.

Yet there are other reasons that don’t show up in the media and market surveys. Cash reduces the overall volatility of your portfolio (it’s the opposite of leverage in that respect). When you own volatile assets such as stocks, currencies and gold, cash takes some of the volatility out of their price movements from a portfolio perspective.

Cash also give you embedded optionality. If other investors change their minds about portfolio composition, it can be costly to exit stock and bond positions in a market panic, whereas if you hold cash you’ll always be ready to swoop in and pick up bargains when the opportunity presents itself.

Cash often lacks appeal to investors because it doesn’t offer big immediate gains. But for the patient investor, cash offers the biggest gains of all by avoiding losses. Cash allows you to “go shopping” when other investors are desperate to sell. It’s a prudent strategy ahead of Tuesday’s vote.


Jim Rickards

P.S. I’m issuing an urgent new crash warning for THIS Tuesday.

This cannot wait. Please read immediately.

Even though I’m traveling to promote my newest book, I’ve recorded an urgent video for you.

Jim Rickards Vid

Click the “play” button to see it for yourself…

It has nothing to do with the currency wars or gold.

Instead, my proprietary market timing indicator has just signaled that the most devastating market crash since 2008 could start THIS Tuesday.

You don’t have long to act… In fact, you may have less than 48 hours.

If you miss my warning right now, you’ll probably not see it in time.

Click here right now to watch — it goes offline on Tuesday. By then, it’ll be too late.

You need to watch it now if you want to position your money correctly.

This small window is the first (and will probably be the last) time anyone has ever heard me say what I’m about to share with you.

>> Click here to watch my emergency video warning ASAP < <</a>

The post Rickards: “Expect a Trump Win and Violent Market Repricing” appeared first on Laissez Faire.


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Total 1 comment
  • JKnTX

    It won’t be close at all, more likely a replay of 1980.

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