Polling should show a Biden lead going into Tuesday’s general election given that Democrats have historically participated in early voting in significantly larger numbers than have Republicans.
Too Close To Call
We believe that Tuesday’s election between two fiscally irresponsible parties will be closer than many voters anticipate. Various polls show an early lead for Biden but Democrats have historically participated in early voting to a greater degree than Republicans.
More Money Printing, Higher Asset Valuations & Taxes
A Trump victory and GOP Senate could result in another $1-1.5 Trillion stimulus package with Infrastructure projects at the package’s core.
A Biden victory and Democrat Senate could result in a $3-4 Trillion stimulus package in January combined with higher taxes. We foresee a follow-on stimulus package in June/July also in the $3-4 Trillion range under Biden.
Stocks and other asset valuations will head higher (i.e. inflation) so long as the Federal Reserve is printing money to maintain zero interest rates and to monetize fiscal “stimulus”. Productivity won’t improve as a result of fiscal “stimulus” yet whichever political party is in power will be quick to claim victory. In fact, we expect Real GDP per capita to decline, especially under a Biden Administration as more people opt to collect unemployment assistance rather than find gainful employment.
UBI & Western Europe 2.0
We also believe a Biden Administration will usher in some form of Universal Basic Income. It will be at this point that the U.S. will have become Western Europe if we are not there already.