In a matter of days, barring similar circumstances to 2020, the most powerful nation on the planet will have a new leader. The implications for the rest of the world, both economically and geopolitically, are extremely important, as are those for both American and international investors. As is customary by now, this vote has been described by the media as “the most important election in history”, like the one four years ago and the one before that too. Levity aside though, it is not an exaggeration to say that this particular election cycle has been different than the ones that preceded it on quite a few different levels.

For one thing, the change of the actual candidate of the Democratic Party so late in the campaigning process was certainly one of the elements that set this vote apart. Not only was it very unusual, but it also stirred significant discontent on both sides. Clearly, Republicans, including Donald Trump himself, felt it was unfair, especially since it happened after the first presidential debate against President Biden who was the candidate at the time. However, it didn’t sit well with some Democrats and independents either, since it bypassed the normal nomination process, involving primary debates between a number of hopeful nominees competing with each other and presenting diverse ideas. Nevertheless, whatever the case might be, the fact remains that Vice President Harris certainly made the election a much tighter race, at least according to polling data (at the time of writing and depending on which polls you follow, of course) that showed her chances to be significantly more favorable than those of the sitting President.

Another element that makes this election different than previous ones is the fact that social media and online news platforms are now playing a major role, perhaps even a decisive one. While it is true that social networks have been heavily influential in past elections (especially Facebook in the last two), this is the first time that we see the owner of one of the most popular social media companies get so actively involved and personally invested in the outcome of the vote. The richest man in the world, Elon Musk, after having bought Twitter (now known as “X”) and radically reforming it, in accordance with his stated mission to restore free speech and end censorship, formally endorsed Donald Trump after his (first) assassination attempt on July 13th at a rally in Butler, Pennsylvania. Since then, he has announced that he will play an active part in Trump’s government, should he prevail, after being tapped to lead a government efficiency commission.

Last but certainly not least, there are also very consequential external factors that will heavily influence the 2024 vote. There are two active conflicts that have radically divided public opinion on a global level. The US is widely seen as instrumental in the outcomes of both the Ukraine war and the Middle East conflict, which also has a lot more eyes focused on this particular election.

The candidates’ platform

As one would expect in any US election in recent memory, there is little to no common ground between the candidates. Donald Trump and Kamala Harris have fundamentally divergent visions and opinions on how to improve the average citizen’s life and how to solve the problems that plague them.

One of the most urgent of said problems is, of course, inflation. Despite the fact that official CPI numbers show a drastic fall in consumer prices over the last year, inflation still remains above the Fed’s own target. However, the picture in the real economy is even more grim, as presented by inflation calculations that are much more in line with the lived experience of the average consumer, such as those provided by ShadowStats.

The Vice President’s proposed solution to this is to alleviate the financial pain of the average household by addressing the symptoms of inflation. The relevant measures include additional welfare benefits and subsidies, income redistribution (“taxing the rich”), and most strikingly, price controls. Kamala Harris backed a plan that would outlaw “price gouging” and tackle what she argues is the cause of inflation, namely corporate greed. Numerous economists and financial experts have criticized the idea and warned that it would, in fact, exacerbate the problem. After all, it was reckless government spending that created this problem to begin with, so one cannot possibly expect that doing more of the same thing can actually solve the problem. As Peter Schiff concisely put it, the VP “keeps telling voters that her plan to deal with rising grocery prices is to crack down on price gouging. But that will only increase the upward cost pressures on food prices caused by the inflation created by government deficit spending and Fed money printing.”

Furthermore, the VP plans to ease the financial woes of Americans through various benefits, tax credits and other subsidies, among those being a $6000 child tax credit and $25,000 in down-payment support for first-time homebuyers, which is very likely to push home prices even higher. Her most recent proposal unveiled in mid-October was her “Opportunity Agenda” for Black men, which included a plan for forgivable loans of up to $20,000 to Black entrepreneurs. Finally, when asked how she plans to pay for all this, Harris explained she would force the rich “to pay their fair share” and even backed a plan to tax unrealized gains, which predictably shocked a lot of investors. Even billionaire entrepreneur and fervent Harris supporter Mark Cuban warned that "if you tax unrealized gains, you're going to kill the stock market”.

Trump’s economic plan is very different. His approach to making the US economy “great again” is reminiscent of his first term and involves tax cuts and reducing regulatory burdens on businesses that could improve employment data and be especially beneficial to SMEs. However, the ex-President’s views on trade haven’t really changed since his time in office. He continues to be staunchly anti-China, so his platform also includes tariffs and other protectionist measures that have the potential to impact US competitiveness and push prices higher for American consumers, since domestic producers wouldn’t have to compete with cheaper imports.

When it comes to geopolitical questions, the contrast is also very clear between the two candidates. Starting with the Ukraine conflict, Trump’s stance is quite simple: he wants to end the war as soon as possible, and with it, the US funding to Ukraine. According to the Council on Foreign Relations, “Since the war began, the U.S. Congress has voted through five bills that have provided Ukraine with ongoing aid, doing so most recently in April 2024. The total budget authority under these bills—the 'headline' figure often cited by news media—is $175 billion. The historic sums are helping a broad set of Ukrainian people and institutions, including refugees, law enforcement, and independent radio broadcasters, though most of the aid has been military related."

The Democratic Party is much more reluctant to support proposals that would end the conflict, and the VP herself has condemned recent plans as unacceptable “surrender” offers. As for the voters themselves, a Pew Research poll in May found that “about a third of Americans (31%) say the U.S. is providing too much support to Ukraine. Roughly equal shares of U.S. adults say the U.S. is providing about the right amount (25%) or not enough support (24%) to Ukraine, while 18% say they are not sure.”

On the (also very divisive) question of the Israel-Gaza conflict, which recently spread to Lebanon too, the candidates seem to embrace the opposite positions. Trump has vouched his unconditional support and continued funding to Israel, while Harris has called for a ceasefire, a stance that makes a lot of sense given the opinions of large swathes of Democrat voters. Many prominent and popular members of her own party, like Alexandria Ocasio-Cortez and Bernie Sanders, have also fiercely condemned Israel’s actions over the past year, while there have been numerous protests and demonstrations around the country, and around the world.

Finally, we see the deepest contrast when it comes to social and cultural issues. Abortion has been, quite predictably, a central topic in this election again and it continues to divide the country, as it has done for decades. After Roe v. Wade was overturned, tensions have been building up once again and female voters, who have consistently turned up to the ballot box more often than men in every election since 1980, are being courted by both sides. Trump remains committed to leaving the issue up to the states, while Harris has supported the reinstatement of the overturned federal law.

On social justice topics, like DEI policies (Diversity, Equity and Inclusion), the battle lines are very clearly drawn too. The VP’s camp is fervently supportive of race-based redistributive measures (like the forgivable loans she recently pitched), an approach that Republicans flat out reject in general.

And of course, we cannot fail to mention the hot button issue of immigration. This might very well be the most decisive issue of this election. A lot of Americans have become increasingly uncomfortable with the Democratic border policies, but a lot of others have also benefited from them, either personally or indirectly. The fact remains though that elevated numbers of illegal immigration have been linked to a rise in crime and gang violence and the Republican Party has certainly used this point to their advantage. On the other hand, Democrats insist that providing a pathway to citizenship will give the country a massive economic boost.

Implications for savers and investors

While it remains impossible (and highly irresponsible) to rely on polls to try and anticipate the victor of this election (doing so has landed a lot of people in trouble in past two elections), it is certainly not too hard to anticipate the economic and investing impact of Trump’s vs. Harris ’agendas.

The geopolitical turmoil that’s been dominating headlines over the last two years, and escalating further since last year, is likely to continue for some time. Even if the Ukraine-Russia war comes to a peaceful resolution under Trump, the situation in the Middle East could deteriorate further, especially since the conflict has already spread into Lebanon and since the former President has clearly expressed his hostility against Iran. Vice versa, under a Harris administration, a ceasefire agreement could be reached in the region, however a peace agreement with Russia could be a lot more elusive. This means that, either way, investors should be prepared for further escalations, or at least a more prolonged period of global geopolitical tensions, with all the implications that can bring to energy markets, currencies, and of course, precious metals.

Another very important factor that all savers and investors must take into consideration is that inflation is very likely to persist, no matter who wins. Of course, with Kamala Harris ’big spending promises consumer prices could rise much faster and sooner, but that doesn’t mean that investors should become complacent in the case of a Trump victory. After the recent monetary policy U-turn of the Federal Reserve and the return to lower rates and easing, further loss of purchasing power is all but guaranteed.

All in all, we at BFI Bullion see this as a pivotal moment for gold and silver investors. As the ongoing, and very resilient, precious metals rally clearly demonstrates, there is a lot of uncertainty and the flight to safety is more than justified. Given all the turbulence and risks going forward, we believe this bull market to be in its early stages and we strongly encourage investors to secure their positions against potential market downturns, fresh inflation waves, and possible geopolitical surprises by increasing their allocations to physical precious metals.

This article is part of our latest BFI Bullion Digger. To read the whole newsletter, go here.