Popular ‘anti-Trump’ candidate elected as German President – A backlash to a backlash?
2016 saw a strong swing towards populist politics with Brexit and the election of Donald Trump, and this year we see the growing threat of Marine Le Pen to the French establishment. These developments bode well for the gold price and other physical commodities for 2017 with economic and political uncertainty scaring off investors.
Inflation expectations could also increase, owing to what Charlie Morris of Atlas Pulse called ‘nominal growth’ in a recent interview with Merryn Somerset Webb – increases in short-term, government-led economic activity that make indicators seem healthy on the surface, but aren’t backed up by any long-term productivity increases. This can lead to capital consumption, inflationism and wealth destruction.
It is, therefore, a notable development that this weekend saw the election of Frank-Walter Steinmeier to the Presidency of Germany. The former foreign minister from the Social Democrats (SDP) is regularly voted Germany’s most popular politician, and ‘has served as a top diplomat under Chancellor Angela Merkel twice’
Steinmeier has been quoted on record as referring to Trump as a ‘hate preacher’, and has criticised Brexit and the German nationalist party Alternative for Germany, according to The Independent.
Although the German president has little executive power he does embody the political mood. Those fearing a continued rise in populist politics across the world are likely to be reassured by Steinmeier’s election. He has pointedly criticised the rise of nationalist politics and Donald Trump
Whilst this may not translate into any kind of noteworthy policy, owing to the almost symbolic nature of the office, markets are sensitive to sentiment, and this could be one more in a growing line of voices opposed to the political trends of the year.
The German federal elections aren’t until this autumn, and are preceded by the French presidential elections in May. The market will most likely make a strong reaction either way – as results for or against the nationalist agenda will either enhance or dampen the political mood of the West, and both will have significant consequences for the gold price.
Link to this article: : http://www.goldmadesimplenews.com/analysis/popular-anti-trump-candidate-elected-as-german-president-a-backlash-to-a-backlash-12969/