What Would Impeaching Trump Mean for Precious Metals?

by: Clint Siegner,  Money Metals News Service

Robert Mueller appeared to be spinning his wheels for the last year and a half. But recent prosecutions of prominent Trump campaign figures now have Democrats giddy over the possibility of being handed grounds for impeachment.

Tasked with investigating whether or not Donald Trump and people working for him colluded with the Russians during the presidential campaign, the special counsel finally got some traction last week.

Metals investors are wondering if political turmoil ratcheting several notches higher might have ramifications for gold and silver prices.

Looking At Impeachment

The chances for impeachment did get a boost, although it would seem to hinge primarily on whether the Republicans lose the House and Senate in November.

Suddenly a number of people in Trump’s orbit have either fallen to prosecution or appear eager to cooperate with the investigation against him.

Paul Manafort, Trump’s former campaign chairman, was convicted of financial fraud and tax evasion early last week.

One of the president’s former attorneys, Michael Cohen, pled guilty to charges related to paying off two women who claimed to have had affairs with Trump.

David Peck, who owns the National Enquirer and is considered to be a friend of the president, was given immunity for whatever testimony he can provide on the subject.

And finally, Allen Weisselberg, the CFO of the Trump Organization also got immunity for whatever he might have to share about his boss.

Some are now speculating on how an impeachment effort might play out in the metals markets. But we’ll get a much better idea of which way the political winds are blowing for the White House after the crucial November mid-term election.

Last week isn’t even the first-time investors have contemplated the possibility of impeachment. So far, the markets seem to be ignoring the possibility.

“With McCain dead and Corker & Flake retiring, there are fewer Republican senators around obsessed with sticking it to Trump.”

It’s a very daunting political task. Only two presidents have ever been impeached – Andrew Johnson and Bill Clinton. Neither were convicted in the Senate and removed from office, however. That can only be done with a ⅔ majority vote.

Even the most optimistic Democrats are not expecting to win a majority of that size in this Fall’s midterm elections.

To convict, Democrats will need some help from Republicans – and with John McCain now dead and Bob Corker and Jeff Flake retiring, there are fewer Republican senators around obsessed with sticking it to Trump.

It could certainly be said Trump doesn’t have too many true friends amongst the Republican leadership in Congress. However, the President has plenty of loyalty amongst his base. It seems unlikely Senate Majority Leader Mitch McConnell is going to risk suiciding the party by collaborating with Trump’s enemies across the aisle.

Impeachment looks like a bad bet based on what we in the public know today.

If the threat of impeachment somehow becomes more credible based on the revelation of more serious crimes, then all bets are off. It will move markets. But, for now at least, it remains a longshot.

Major political turmoil is just one of many reasons to buy insurance in the form of gold and silver bullion. Investors can add upheaval in Washington to a longer list, which, at the moment, also includes:

  • Precious metals looking oversold.
  • Extremely bullish relative positioning of banks versus speculators in the Commitment of Traders data.
  • Several potential catalysts which could reignite safe-haven buying – not the least of which is a major correction in the exuberant stock markets.
Advertisements

Trump Turmoil Grows, Prompting Flight to Safety

By Clint Siegner*

Donald Trump has been dogged by efforts to undermine his presidency since winning the election in November. Deep State operators and political partisans have been working around the clock to hang a scandal around the president’s neck large enough to ruin him.

If markets are any indication, they got some help last week from former FBI director James Comey. Comey’s leaked memo asserting the president tried to interfere with the investigation of Michael Flynn, the former National Security Advisor, prompted a selloff in stocks and a boost in precious metals.

James Comey Firing

Drama around former FBI Director Comey
may trigger Trump’s impeachment.

Democratic Congressman Al Green became the first in Congress to actually call for impeaching the president on the House floor. While there have certainly been plenty of people making the suggestion more informally, Trump’s opponents hadn’t gotten a lot of traction.

Now may be the time to start taking the impeachment threat more seriously.

There are signs that even some Republicans could support the effort. Representative Justin Amash from Michigan told reporters on Wednesday that if Comey’s memo is accurate, it provides grounds for impeachment. He trusts the former FBI director more than Trump.

Meanwhile, there is little reason to expect other prominent Republicans who have often voiced opposition to Trump, such as Paul Ryan, Mitch McConnell and John McCain, will fight very hard to protect the president.

To be fair, Trump has done plenty to weaken support amongst his own base. Many perceive him to be filling, not draining, the swamp by appointing a number of bankers and other insiders to key positions. His posture has been much more conciliatory than expected toward Hillary Clinton and other corrupt figures.

The president also appears anxious to compromise on key promises such as avoiding further entanglement in the Middle East, repealing Obamacare, and building a border wall.

PredictIt, a prediction market where participants can effectively wager on political outcomes, shows the odds of Trump being impeached moving significantly higher.

2017 Trump Impeachment Odds

It’s strange that markets, particularly for stocks, continue pricing in the eventual implementation of Trump’s economic agenda. The persistent controversy and the lack of cooperation from Congressional Republicans should have put a dent in investor optimism already.

In any event, traders are suddenly more anxious regarding what comes next. The president may survive this latest assault, but his opposition has proven committed to keep trying. There is a growing chance they will eventually succeed.

The escalating attacks make Trump likely to respond by going after Democrats, ratcheting up the turmoil even further. There is no shortage of fodder. Last week, for example, new evidence emerged that murdered DNC staffer Seth Rich, not the Russians, was behind leaks of DNC emails. The development drove further speculation that high ranking Democrats had Rich murdered for the transgression.

There is also a chance Trump will resort to the favored tactic of governments everywhere for boosting support and deflecting controversy – launch a war.

Trump is not known for any ability to quietly de-escalate. The drama in Washington is likely to keep on rising, and precious metals markets may be starting to reflect that.