What Happens to Markets And Economy If Biden Wins - TheStreet

What Happens to Markets And Economy If Biden Wins

Author:
Publish date:
Video Duration:
9

The odds are that former Vice-President Joe Biden will win this year’s presidential election, and the results for the economy will be more stimulus, higher taxes, rising inflation, and higher gold prices, said Peter Schiff, senior economist and chief market strategist of Euro Pacific Capital.

“I think the outcome is going to be a Biden win. I also think that it’s more likely than not that the Democrats will take the Senate as well, giving them control of both Houses of Congress and the White House. As reckless as the Republicans have been with borrowing and spending, I expect the Democrats to be even worse,” Schiff told Kitco News on the sidelines of the New Orleans Investment Conference.

Biden is currently leading President Donald Trump in the polls, and Schiff noted that the margin is even wider than in 2016.

“I think a lot of people [in 2016] were willing to take a chance on somebody who promised to drain the swamp and make America great again, neither of those promises were kept by the president. He pretends that he kept them, but he hasn’t. The signature issue he ran on with the trade deficit. He was going to make America great again by reducing our trade deficits, we were losing our trade,” he said.

In fact, the trade deficit has only increased under Trump’s administration, Schiff said.

“Last week, we reported the single largest monthly trade deficit in goods in the history of the country,” he said.

Unlike with the current administration, the Democrats won’t have much opposition to reign in spending.

“The Tea Party is dead, Trump helped kill it,” he said.

The result of undisciplined fiscal spending is more money printing, which leads to inflation, Schiff said.

“Consumer prices have been somewhat under control recently, but I think they’re going to run out of control after Biden comes to the White House,” he said.

On foreign policy, a Biden administration may decrease tariffs on Chinese imports, Schiff noted.

Taxes are expected to rise should the Democrats take over the White House, he said.

“Taxes are headed up dramatically on corporations,” he said.

Corporate earnings, as well, are likely to take a hit, Schiff added, but what the stock markets really care about is stimulus.

“Bad news is good news. Why is bad news on the economy good? Because we get more stimulus, more money printing. That is the only thing that’s driving the stock market, so [markets] are looking at the bad news of a Biden win as being good for the stock market, not because it’s good for corporate earnings, it’s not. Corporate earnings are going to get crushed under Biden. What the markets care more about is the stimulus, the stimulus trumps the earnings. I don’t even think earnings matter anymore,” he said.

Latest Videos From TheStreet and Jim Cramer: