Trump's First 100 Days In Office
Trump's First 100 Days in Office
As Donald Trump completes his first 100 Days in Office, we take a look at his performance; his achievements, failures and the affect his reign has had on gold, silver, the dollar and sterling.
A Nation Divided as Trump Wins US Presidential Election
When Trump won the US Presidential Election on 9 November 2016, the world was taken by surprise. Against the odds, Republican Trump, the brash and bolshie businessman turned politician, defeated the established favourite of the political elite, the Democrat's Hilary Clinton. However, as with the Brexit Referendum, the win was marginal and whilst Trump won the College Electoral vote he actually lost the popular vote by 2,868,691.
A nation divided into two opposing camps, Republicans v Democrats, each side wanting to be heard, makes for a difficult term in office, particularly when tempers are riled. More than half the electorate felt that their vote had been ignored. A difficult situation for any president to bring the two factions together, even when working towards a goal that would benefit every American; to Make America Great Again.
Trump Pledges to Make America Great Again
Donald Trump lay out his pledges long before his inauguration as President of the United States of America on 20 January 2017. During a rally on the campaign trail in Gettysburg, Pennsylvania on 23 October 2016, Trump outlined his presidential pledges in a Contract With the American Voter. They included:
- A drive to tackle corruption and collusion in the capital including limiting the number of terms that Congress members could serve, banning officials from becoming lobbyists within a 5 year period of leaving governmental departments. Prohibiting White House officials from petitioning for foreign governments and a hiring freeze on all federal employees, except for the military.
- Protecting American workers rights by renegotiating international trade deals, lifting restrictions and reinstating any energy projects (including shale, coal and gas). Incentives would be provided to encourage public-private partnerships to improve infrastructure. Payments to the UN climate change programs to cease and money from these schemes to be used to repair and improve America’s water and environmental infrastructure.
- Imposing immigration restrictions to prevent any refugees or visitors from any countries listed as terror-prone regions. Commencing an immediate repatriation and deportation drive to rid the USA of any illegal immigrants who have committed a crime. Build a wall between the USA and Mexico to prevent further illegal entry by Mexicans into the promised land of America.
- Implementing an economic growth plan to create 25 million jobs by reducing taxes, trade reforms and slashing corporate taxes. Ending the offshore tax schemes where wealthy American businesses were using loopholes similar to British tax avoidance schemes to bank trillions of US Dollars.
- Parents would be given the right to educate their child at any school, or home-school, of their choice. Higher education will be made more affordable for all.
- Replace the Obamacare health scheme with a Health Savings account and allow American taxpayers to deduct child and elder care from their taxes. Employers would be encouraged to provide on-site childcare facilities.
- Improving law enforcement agencies by creating a task force to fight violent crime that would liaise with local police forces. Increasing investment in the military and providing better aftercare for members of the armed forces, past and present.
2016 Trump Silver 'Dollar' Round Obverse
100 Days in Office
The first 100 days in office acts as a benchmark for every president to be judged upon. It gives a preliminary indication as to whether their full term will be successful or not.
As the 75 day mark approached, none of Trump's goals had been achieved, indeed, some had been publicly white-walled. The next 25 days saw a feverish attempt to implement his pledges. As the 100 day mark drew near, Trump had signed off more executive orders than any other US president in history. Many have yet to be followed through.
The Achievements, The Failures and The 'Wait and See What Happens'
It's looking like the achievements are being outweighed by the failures, however, there are a few accomplishments which President Trump can be proud of.
One of Trump's biggest success has been to appoint Neil Gorsuch to the Supreme Court. This candidate favours the governing of the nation by lawmakers and not individual judges and had Republican, Democrat and public approval.
After the horrific chemical attack on the Syrian town of Khan Sheikhoun on 4 April 2017 where over 80 victims died, Russia asked Trump what his strategy would be in dealing with Syria. Russia have been complicit in backing Assad's regime and providing military support on attacks against areas in rebel hands, little did they realise that this fairly simple question would provoke such a response. Trump's reaction was to launch an attack of 59 Tomahawk missiles at the Shayrat air base which was responsible for the initial chemical attack. A spectacular display of strength from Trump, showing that when it comes to atrocities against innocent civilians America will not stand back and rely on long winded diplomacy.
After labelling China a currency manipulator in his election campaign, Trump has taken a more subtle approach with the Chinese. However, as the Chinese President Xi and his delegation were meeting with Trump for economic negotiations in Florida when Trump ordered the attack on the Syrian military base, it was a fine show of strength to ensure that the Chinese Dragon didn't underestimate the power of the mighty Eagle. America is in a strong position to negotiate a much tougher trade deal with China. The Chinese need the US demand for their cheaper imported goods to continue. President Xi is up for re-election this Autumn and a substantial fall in US demand for Chinese products would sorely affect their export figures.
Although Trump is facing difficulties with recalcitrant judges opposed to his immigration policies, a dramatic reduction in immigrants, both legal and illegal, has been reported. Immigrants are being deterred, often before they even get to the border, with increased enforcement to refuse visas and asylum seekers and the threat of detention beds for anyone found to be in the country illegally. Trump has shifted the focus to deporting immigrants who have been convicted of serious crimes, a move which has found favour with the American public.
The US Eagle - a symbol of strength, wealth and freedom
Trump was humiliated when his Executive Order to ban travellers from selected Muslim countries was blocked by a federal judge in Washington. Trump issued a new ban but this was quickly scuppered by another judge in Hawaii. Trump plans to take the ban before the Supreme Court but unless he can convince these judges that he is not discriminating against or affecting the constitutional rights of Muslim residents in the USA it is unlikely that he will succeed.
Similarly, the Executive Order to penalise sanctuary cities for protecting illegal immigrants by withholding funds has been blocked by a federal judge in California. Trump has tweeted that he plans to see the judge in the Supreme Court. Plenty of work for Trump's lawyers.
The bromance between Trump and Putin appears to be over. Perhaps Putin thought Trump would prove to be a soft ally in the White House but President Trump is putting America first. Rumours of financial ties with members of Trump's administration and Russia's cyberattack on the US election refuses to go away. With investigations prompting resignations from national security adviser Michael Flynn, campaign chairman Paul Manafort, foreign policy adviser Carter Page and aide Roger Stone, Trump's administration needs to be squeaky clean. Anyone with a whiff of Russian dealings should step down now before they are forced out.
Obamacare is here to stay. Support from his Grand Old Party has failed to materialise and until Trump can provide a comprehensive alternative to Obamacare, his plans to repeal and replace President Obama's affordable healthcare act look likely to fail.
The 'Wait and See What Happens'
Trump is determined to reduce imports and to increase purchases of American made goods. On paper the scheme to Buy American, Hire American looks great, increased manufacturing will create more jobs and bring more taxes into the government's coffers. However, it may need more than a hard psychological sell to persuade consumers to get onboard with the plan. American consumers are used to having a wide range of low cost products to choose from. Whilst it is a good tactic for negotiating better trade deals, the proposal has already met with resistance, particularly from US manufacturers who have their products (or components) made cheaply overseas and then imported back to the USA to sell to their customers. They certainly don't want to attract higher import duties to do this.
Trump's proposed corporation tax cuts from 35% to 15% have been well received by US businesses. This would be a huge boost for company earnings, growth and the creation of more jobs. It would enable US companies to be more competitive against their international rivals and would give businesses an incentive to invest in Trump's plan to make America Great Again. Whilst it is planned that the predicted economic growth that would result from the cuts would be used to cover the cost of the tax cut, it remains to be seen exactly how this could be monitored. Some analysts fear that companies may hoard the benefits of this tax break in offshore accounts, thus adding to the deficit instead of reducing it. Trillions of untaxed US Dollars already sit in international tax havens. Unless a more tempting carrot is offered or heavy measures are introduced to punish tax avoidance, it is hard to see how much of this would be brought back to US soil and actually used to pay for the tax cuts. The Democrats will be digging their heels in hard as they see problems with the mathematics of this bill which in turn will make it difficult for businesses to see the longevity of the bill.
North Korea's Kim Jong-Un continues to taunt Trump with flamboyant displays of military strength and boasts of a huge nuclear arsenal directed at the country's arch-nemesis, the United States of America. Trump is showing a little restraint; attempting to defuse military tensions and seeking diplomatic solutions whilst lining up his armada in the Sea of Japan and setting up the Terminal High Altitude Area Defense (THAAD) anti-missile system in South Korea. China and Russia are keen to find a solution that doesn't involve military might. The last thing they want is for their neighbour to be at war with the mighty Eagle as it could provoke a massive influx of poverty stricken refugees via their borders. With both sides showing that they are ready to commence a battle, will Trump and his advisors manage to find a resolution whilst allowing Kim Jong-Un to save face? It's anyone's guess.
Together with the US $1 Trillion infrastructure vision, Trump's plans to build the Great Wall of Mexico are still pipedreams. Until enough money is found to implement these plans they will remain a fantasy for the future.
2016 Trump Silver 'Dollar' Round Reverse
The US Economy Under Trump
The markets welcomed the election of the businessman-president with big spending plans to stimulate the economy and an understanding of debt management. However, there is a massive difference between managing a huge conglomerate and running the country. The US government cannot call upon Chapter 11 to give them time to renegotiate debts whilst continuing to do business.
Trump needs companies and corporations to join him in his vision to Make America Great Again. His plans to build and repair America's infrastructure will rely heavily on public and private investment. Perhaps he should introduce a system similar to the Queen's Honours Lists or the peerage scheme in the House of Lords where commitment and service to the country are recognised and rewarded. It may provide the encouragement that business leaders need to get on board with his plan.
Currently standing at US $19,851,463,219,469* and growing at a rate of $14,034 per second, equating to $61,203 per US citizen, America’s deficit cannot be ignored. America ranks as having the third largest deficit in the world, behind Italy and Japan! Financially, the country is in a perilous state. Fiscal conservatives in Congress are determined to reduce not increase the deficit so any big spending plans are likely to meet with strong resistance.
Social Security continues to be the largest government expenditure with payments exceeding US $2 trillion a year. This is closely followed by Military spending; America ranks in the global top ten for expenditure on the military as the cost of America's war on terror both at home and abroad multiplies. Trump needs to boost the economy. The income from federal revenue and taxes needs to grow; when more people are working and paying taxes and more companies are paying corporation taxes, the less of a drain it will be on social security. It all makes sense on paper but the realities of implementing real schemes is proving nigh impossible for the president.
The Weaker Dollar
The US Dollar surged when it was announced that Trump had won the Presidential election. Closer to the 100 day marker, Trump announced that he wanted a weaker dollar. As investors lose confidence in Trump's ability to push his policies through Congress it looks like he'll get the weaker currency that he wanted. The dollar has been falling slowly and softly over the last month. Sterling hit a seven month high against the dollar and the 1.30 ceiling is expected to be crossed - but according to analysts, not for long.
Whilst consumers will feel the pinch as the US $'s purchasing power is diminished and companies see lower profits, opportunities will abound for exporters and multinational businesses. Countries whose debts are measured in US Dollars will heave a sigh of relief but Trump may find it harder to persuade investors to part with the devalued monies to help build his dream.
There's an old adage that a 'weak dollar is a weak president'. Will Trump do an about turn and strive for a stronger dollar?
The Trump Effect on Gold and Silver
As news broke that Trump has succeeded in the election campaign, gold jumped to £1047.29 and silver to £15.11. As the 100 Days in Office approached, gold settled to a two month low of £979.50 and silver hit a three month low of £13.30.
Demand for gold and silver bullion by the US market is huge. The desire to protect your wealth is felt as a necessity by millions who are concerned about the future of the dollar and the possibility of economic crisis. Many Americans would welcome the return of the Gold Standard and see ownership of physical bullion as the only way to protect themselves if the dollar collapses. Overstock.com, one of America's largest retailers was reported as stockpiling gold, silver and food to pay employees in the event of a financial system collapse. Whilst this may seem extreme, to many Americans this is seen as a sensible plan as historically gold and silver have been the favoured method of settling debts.
Whilst the US Eagle is the favourite bullion coin, the US Mint has struggled at times to meet demand. Delays and production issues have encouraged investors to seek coins from other international mints. The Canadian Maple has always been a popular alternative, but the Australian Perth Mint are making huge investments to increase production of their bullion range to become the next choice for US investors.
Gold and silver have been particularly volatile during Trump's first 100 days, with spiked reactions to global terrorism attacks and economic statements.
Whilst the United States' main focus is on events that affect America the Great, we will be watching with interest the adventures of 'What Trump Did Next...'
If you've enjoyed this blog, you may be interested in reading Donald Trump, President of the United States of America and Trump Wins US Election 2016. Let us know what you think about our blogs.
* Based on information at midnight 28 April 2017.