Wednesday, November 25, 2020
 
Columnist
Martin Hennecke

Investors must be wary as reform inevitable
 
23/11/2020
 
Last week, I had written that America is destined to have a weak president and government for the next four years, no matter who is finally declared the official winner in the 2020 US presidential race. If Joe Biden takes office, as media polls project, he will be pushed into a corner by the radical left wing, and struggle to implement his policies. Now, internal divisions have begun to spring up within the Democrats because of the behavior of radical party members. Two senior Democratic senators from Minnesota last week suddenly announced they were quitting Democratic-Farmer-Labor Party - the state's version of the Democratic Party - mainly because they were disillusioned with the state of affairs within the Democrats. And while unconfirmed results show that Biden has won the presidential race, the loss of Democratic Party seats in Congress shows an increasing number of Americans are unhappy with the liberals, while the resignation of the two senators also shows that the radical left is harming the party. If Biden is elected, it won't be because he is strong leader or has a proven track record. There's a good chance that those who voted for Biden did so because they hated President Donald Trump, not because they loved the Democratic contender. So if Biden takes over the reins of office under these circumstances, how will he impart good governance over the next four years? And when is comes to morals and family ethics, Biden stands on shaky ground. Before the election, there were reports that he had abused his power when he was US Vice President for personal and family gain, but he has not come out with explanations this far. Had it not been for the mainstream media, which shielded him from these accusations with their silence, it is believed that Biden would still need to worry about these charges. But just because he's not facing any criticism does not mean that Americans trust the Biden family, especially now that Democrats are starting to quit and the radical left is demanding that he follow their path. How can Biden govern effectively when everyone is demanding their pound of flesh? However, it's important to note that even if Trump succeeds in turning things around, he will face no fewer problems than Biden, because the radical left will continue to tear America apart as they believe that only their path is the right one, and America will not be at peace. Of course, sometimes some good can come out of a crisis, because if the tearing of America leads to major reforms and an awakening among its citizens, then it will not necessarily be a bad thing in the long run. For instance, look at the two senators who quit the party. Similarly, if the mainstream publications continue to be partial towards Biden, people will eventually realize that the media has forgotten the importance of media responsibility. However, if reforms do come as America is torn apart, investors should be prepared. US financial markets might come in for a big adjustment because stocks keep hitting records only because of the rescue policies from the US Federal Reserve and federal government, which leave no adjustment space for asset prices. But once reforms start to happen, can the Fed and the US government money only be used to support asset prices? Of course, politicians are afraid of a financial crisis because if a crisis emerges it will hurt their performance, though proper adjustments of assets can give people the opportunity to create wealth. However, due to this fear among politicians, there has not been an adjustment in global asset prices since the financial tsunami of 2007-2008. This has also led to a sharp decline in the number of the middle class worldwide. The bigger the gap between the rich and the poor, the more riven society becomes. Therefore, reform is destined to come, it is only the question is whether 2021 will prove an opportune time for it to happen. Andrew Wong is chairman and CEO of Anli Securities
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