The only thing the initial negative US stock market reaction to Donald Trump’s election revealed is who Wall Street did not vote for, says Uwe Parpart, Partner and Chief Strategist at Capital Link International. Once the Street got over its political knee jerk reaction, explains Parpart, the market just kept rising.
Parpart believes Trump’s proposed policies have a real chance of putting the US economy on a sustained path of recovery unaided by the continued support of the Federal Reserve.
In an extended interview by Ashu Dutt of BTVi, Parpart says former Secretary of State Hillary Clinton’s proposed policies would have meant more of the same slow economic growth as under out-going President Barack Obama. Parpart says Clinton wanted to hike taxes, increase deficit spending and would have forced the Fed to hike rates faster than expected to cope with the ensuing inflation, which would have quickly led to higher rates and negative equity impact.
Trump will cut US corporate taxes, says Parpart, which he believes will stimulate what the US has not seen in eight years: entrepreneurial energy and new business formation.
The Capital Link chief strategist says the possibility of Trump having a negative impact on US-China relations is nonsense. He believes these unfounded fears come from US China watchers, not the Chinese themselves. Parpart says China sees Trump as a pragmatic deal maker, not an ideologue; someone they can do business with rather than have to appease politically.
Parpart says Trump will eventually realize that the only currency manipulation China has been practising recently is to support the renminbi, not push it down.
Uwe Parpart is Editor of Asia Times.