Emma Ann Hughes 

Trump turns £5 into £15m

Emma Ann Hughes

Emma Ann Hughes

If you bet £5 at the beginning of the year on Leicester being top of the football league, Brexit and a Trump victory you would now be £15m richer.  

The staggering sum you would have reaped from the bookies for making such a bet on the Republican political outsider managing to secure the White House in Washington as his latest abode is a sign of how extraordinary the US election result was.

How did this outspoken, reality television star manage to convince the US nation he was fit to lead them?

Like many parents on Wednesday (9 November) I was left having to explain to my six-year-old daughter when she woke up how Mr Trump had managed to confound expectations the US was going to elect their first female president by winning the US election.

Explaining to my lovely little girl how pollsters got it wrong and Democrat Hillary Clinton hadn’t smashed through the highest glass ceiling in the land was almost as unenviable a task as financial advisers and investment managers having to unpick everything Mr Trump said during his campaign to secure the highest office in the land and make sense of what it will mean for markets. 

Yet on Wednesday (9 November) the markets were sanguine about the result, as Mr Trump’s victory speech was graceful and took some of the heat out of the very heated campaign.  

But as the world has time to think we will have to return to some of his less pleasant, headline-grabbing sound bites.

Penchant for “pussy-grabbing” comments aside, we have a man who fears “Bad Hombres” and claims the Chinese are currency manipulators.

Perhaps the biggest threat to both world growth and financial markets in the next few years is Mr Trump’s protectionist streak. 

His proposals to raise trade tariffs – pledging, among other things, to levy a 45 per cent tax on Chinese imports – are a worry. 

His denouncement of China as a currency manipulator could also invite retaliation from the world’s second biggest economy.

The risk is the Chinese respond by selling their substantial holdings of Treasuries.  

Who knows if this will be the outcome of Mrs Clinton’s defeat, but that clearly would be very damaging for bond yields.

At a time when global trade appears to be experiencing a structural decline, Mr Trump’s stance casts a shadow over the world’s economic prospects.

So, sadly, unless you took a bet on him being president, the UK leaving the European Union and Gary Lineker’s home town team beating the likes of Manchester United all in the same year, I don’t think Mr Trump will manage to turn £5 into £15m again anytime soon.

Mind you, given how crazy this year has been I wouldn’t necessarily bet against him pulling off that trick.

Comments