If you don’t know the name… don’t worry.
He’s the leader of the British Labour Party. And he just went down in a historic defeat to “Britain’s Trump,” Boris Johnson.
I know what you may be thinking: “I don’t care about what’s going on in Britain. It doesn’t affect me.”
But hear me out…
As you’ll see today and tomorrow, there are some important takeaways for investors… including bullish news for the U.S. stock market.
And despite the fact that Democrats are today getting ready to impeach Trump, what just went down in Britain shows he’s here to stay.
In that way, he’s identical to U.S. presidential hopeful Bernie Sanders and rising star of the left Alexandria Ocasio-Cortez (“AOC”).
Corbyn ran the most socialist platform ever in British politics. He wanted to renationalize British public utilities and railway companies… give free broadband to all… and boost welfare spending.
You’d think offering all that free stuff would have garnered him a ton of support. But last Thursday, the Labour Party suffered its biggest defeat since 1935.
Even worse for Labour… it shed the most votes in its traditional working-class heartland in the north of England. The party even lost seats it had held since 1919.
And whatever your personal view of the president, that’s going to be a tailwind for U.S. stocks next year.
Because it shows that even working-class voters aren’t buying what democratic socialists are selling.
Despite Corbyn’s historically left-leaning platform, the majority of voters decided to pull the trigger for the Conservatives.
Now, admittedly, Brexit (Britain’s exit from the European Union) was a hot-button issue in the British election. And Johnson’s full-throated support of Brexit was a major reason he got elected.
But still, the British election result doesn’t bode well for the U.S. Democrats. And that’s especially true if they put forward a Corbyn of their own in Bernie Sanders… or even a “Corbyn light” in Elizabeth Warren.
Both of these candidates have a laundry list of free giveaways. But working-class voters in the crucial Rust Belt states are likely to be more persuaded by an anti-socialist message… as voters in Britain were.
Here’s a list of the vote share for social democratic parties in European national elections…
|
Country |
Year |
Party |
Vote Percentage |
|
Ireland |
2017 |
Labour Party |
6.6% |
|
France |
2017 |
Socialist Party |
10% |
|
Germany |
2017 |
SPD |
20% |
|
Italy |
2018 |
Democratic Party |
23% |
|
Spain |
2019 |
PSOE |
28% |
There’s been little good news for these left-leaning parties of late. And keep in mind, some of these parties dominated European politics for decades.
If the British election is anything to go on, a Corbyn-like candidate for U.S. president isn’t what voters in Wisconsin, Pennsylvania, and Ohio are looking for.
And those are the states that will likely swing the election – either way.
If you doubt the connection between British politics and U.S. politics, remember that the Brexit referendum in June 2016 foreshadowed Trump’s defeat of the status quo candidate, Hillary Clinton.
Now, before you send me a nastygram for weighing in on politics… an important disclaimer.
I’m not a fan of partisan politics. Never have been. And these days, the “debate” has gotten so shrill I just want to tune out.
But as my mentor Bill Bonner has been warning, never in our lifetimes has politics had such an impact on investors… and their wealth. Bill…
Never before has politics played such an important role in markets and economies.
Politics intrudes on money more aggressively than ever before – setting the terms of trade and the price of credit and indirectly bumping into stock and bond prices, too.
Bill’s right. However unpleasant… it’s vital you understand what’s happening at the political level.
He’s slashing taxes… pushing for lower interest rates… and championing every new market high via his Twitter feed.
And he’s going to continue to push for higher stock prices, because he’s made a rising stock market part of his brand.
If it’s President Sanders… or President Warren… in 2020, it’s going to be a different story.
They’re hostile toward Wall Street… and toward the wealthy. And in particular, they have their sights on the investor class. For instance, Warren wants to implement a wealth tax. And Sanders wants to levy a tax on stock trading.
In tomorrow’s Daily Cut, we’ll show you how Teeka Tiwari is setting his readers up to profit from Brexit… They’ve already booked gains of 76%, 89%, and 150% off his Brexit plays.
And for our more adventurous readers, you may want to consider how Legacy Research cofounder Doug Casey profited in 2016…
Doug was so sure of the U.S. election’s outcome, he placed two separate personal bets on a Trump win. One was a $500 bet he won 5-to-1. The other handed him 100 ounces of silver from a leading investor whose name we can’t reveal.
Until tomorrow,
 |
Chris Lowe
December 18, 2019
Lisbon, Portugal
P.S. I’m just back to my home in Lisbon after a week stateside. I visited Bill in Baltimore for a sit-down interview about what he sees coming in 2020. Bonner-Denning Letter lifetime subscribers can hear that in full after the holidays. I also attended the wedding of Bill’s son Jules. It was held in the Church of St. Thomas More in uptown Manhattan. And the reception was in held in America’s first women-only club. You can read more about the wedding from Bill here.
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