But observing all this from the UK, I don’t feel any of the above have a serious chance of defeating the existing President in November. Sanders is both too old and too left-wing to carry Middle America, while I somehow doubt this constituency, which is vital in a Presidential election, is ready yet to elect an openly gay President like Buttigieg. Klobuchar remains an outsider and has a past as a prosecutor in Minnesota which may not appeal to the very significant black section of the population. Biden is caught up in the Ukraine corruption scandal and whether he is guilty or not is probably irrelevant. Mud sticks. While with his Pocahontas jibes at Warren, Trump has possibly relegated her to electoral obscurity. He is something of an expert at that.
To me that leaves Michael Bloomberg, who is biding his time so far, as possibly the only Democratic candidate who has a serious chance of defeating Trump for the Presidency. He has virtually unlimited funds available to flow into the campaign coffers and much as it may irk them to do so the Democratic Party hierarchy is likely, in my view, to come down to this conclusion too. He is probably the only candidate capable of attracting dissident Republicans to vote for him as a former politically expedient Republican himself and unless he makes an electoral faux pas he actually looks to have a decent chance of winning in the November vote – particularly given the Biden campaign looks to be fading.
The parallels with the Trump rise to power are somewhat similar. Trump was once a Democrat just as Bloomberg was once the Republican Mayor of New York, although the latter has been a Democrat for most of his life. Both have substantial resources to throw into their respective campaigns, with Bloomberg certainly having the edge in this respect as reputedly the ninth richest person in the U.S. with assets said to be worth around $60 billion. Both are media savvy, although Bloomberg perhaps does not have quite the vitriolic tongue of the current President. Doubtless, the Trump administration is well aware of the threat Bloomberg poses and will be working hard to find ammunition with which to belittle his candidacy.
Recent polls published on the Real Clear Politics website mostly put Bloomberg ahead of Trump in a head to head appraisal. The possible Bloomberg poll lead in the head-to-head count with Trump is perhaps the strongest for a Democratic nominee by nearly all organizations although he still does not necessarily top the poll as the likely Democratic Party contender. But at the moment the polls are volatile and it is probably too early to call Bloomberg the current front runner unless he comes out comfortably on top when he enters the primary/caucus fray on Super Tuesday (March 3rd) when 14 states hold their primaries. Bloomberg will be then well and truly in the race (he has not been a candidate in any of the primaries or caucuses so far and is not participating in the next two – in Nevada and South Carolina).
But Bloomberg will have ground to make up if he is going to be the Democratic candidate. At the moment the odds are probably with Sanders or Buttigieg who have outperformed the field so far. If Sanders ends up running against Trump – and Bloomberg has said he will back anyone financially against Trump – we suspect the gold price may take off. Sanders is tagged as a ‘socialist’ – akin to communist in right-wing American parlance - and the slightest chance that he could win the Presidential race will have Wall Street running for the hills and also to invest in supposed safe havens like gold. It would roil the equities markets too. Buttigieg or Bloomberg would not spook the markets to the same extent as they are both seen as centrists and likely to preserve the political status quo. But, as we pointed out above, we see Bloomberg as the only possible candidate who has a chance of besting Trump unless other events conspire to move the goalposts.
Trump still has to be the favorite to retain the Presidency. His popularity in the USA seems to be ever-rising despite his volatile approach to both foreign and domestic policy and his often somewhat dubious relationship with the truth. The partisan moves to have him impeached and removed from office which, as expected, failed miserably at the Senate hurdle, have probably strengthened his position for the time being. The majority of Americans may seem to believe that Trump may have acted outside his powers in trying to persuade Ukraine to investigate the Bidens, but then they don’t seem to care as they don’t seem to have cared about the accusations regarding his past indiscretions. The President seemingly can do no wrong in the eyes of his increasingly vocal supporters!
If Trump should appear nearer the election date to be ahead in the polls against whosoever the Democrats end up selecting, his volatility and tendency to make policy on social media will probably slightly benefit gold, but only marginally while the likelihood of a Bloomberg Presidency may bring initial rises because any change would bring forth some uncertainty, but as a likely occupant of the center ground, any advances, as a result, would likely be muted.
Overhanging everything though is the state of the economy and this may well be dependent on the control, or otherwise of the now officially designated NCOV-19 virus. A serious recession in the U.S., which is on the cards if the virus is not quickly brought under control, would dent Trump’s re-election chances and even if the virus spread outside China remains limited the inevitable decline in the Chinese economy itself will affect global economies adversely – not least that of the U.S. because of its strong trading relationship with the Middle Kingdom with many U.S. companies sourcing production from currently shut-down plants there. The incidence of the virus in China shows little signs of a slowdown and deaths are rising alarmingly.
The fate of passengers on the Diamond Princess cruise liner demonstrates the potential spread of the virus in densely populated areas and it is probably only a matter of time before there are multiple cases in major cities around the world – with some of the major population centers in North America among them. Governments will do their best to play down likely economic effects of the potential spread but statistical evidence of an escalation will likely grow and start to bring down equities markets. A global recession has to be on the cards as a result and this should benefit perceived safe havens like gold, although the gold price too could be brought down in a rush for liquidity from overstretched funds and investors. If so, though, gold would likely be the first to start to regain pre-crash levels and then go from strength to strength as in 2008. We think one should perhaps be wary of silver under these circumstances because it is a far smaller market and the potential price dip is far greater in percentage terms, while pgms will also likely underperform in a recession as industrial, rather than precious, metals.