Danger of impeachment

Sometimes one has a feeling like the internet is giving them unbelievable opportunities. And sometimes one has a feeling that the internet took democracy from them. We do have unbelievably fast media and never-ending plurality because of the internet. There are so many opinions and news that one can’t distinguish real from fake and important from unimportant. Which is somehow complicating the legibility of world especially in the connection with the fact that not only Russia but the rest of the world is as well ruled by oligarchs who think that they are endlessly smart and unshakable. It is true even in the USA.

A fairly surprising news that has a strong potential to influence the financial markets came from the USA. The American president D. Trump is in a danger of impeachment, meaning the constitutional legal action leading to dismissal from the office for pressing the chief of FBI to not investigate his former security adviser who was accused of cooperation with Russia. On top of that, the pressure on Trump is growing because he told the Russian president significant military secret. However, the Russian president stated to the media today that the American president didn’t tell him anything. By doing that he stood up for the American president but didn’t calm down the situation in any way, on the contrary, he only added the fuel to the fire of speculators that Russia has financed Trump’s campaign and now it’s covering for him.

That started a spiral of hypotheses that are all leading to the democracy being rotten. Logically, that immediately rose worries among speculators that Trump won’t be able to unite the American parliament and enforce what he has been planning before the elections at this disturbing situation. That’s why the stocks are dropping and the dollar is depreciating. Let’s remember how the financial markets were growing in expectations at the beginning of the year that almost omnipotent Trump will fix the world. The excitement and the golden aura have vanished like when you swoosh a magic wand at least in the eyes of the financial speculators. Gold is thanks to that quickly growing. The market is looking for a safe haven just like I have been already mentioning last week. The price has been still under 1220 dollars per ounce on 10th May and now it is at 1248 dollars.

It is a habit of politicians that when the situation gets serious they are trying to divert the attention. That’s why there is a logical chance that Trump could surprisingly send a couple of missiles on North Korea like he did some time ago in Syria. Media would be paying attention to the chance of the nuclear war and not to the impeachment. But today the gold hasn’t even reached its twenty-day average yet. That’s why I think it still has more space for growth.
In the light of all these events, the dollar depreciated against the euro today to the weakest value since D. Trump has been elected into the office. That is a really weak exchange rate. The twenty-day average is stronger by two cents. If Trump won’t do some other misstep and handles the situation this time as well, I think the dollar is going to return to the stronger values. The current exchange rate is not matching the strength of the America. (It would be of course different if the impeachment was really set into the motion which is something I’m not betting on.)

Marketa Sichtarova, Vladimir Pikora