Joe Biden has outrun his predecessor so far

Donald Trump once was sure that stock indexes’ dynamics reflected his policy’s efficiency, so he eyed them. The S&P 500’s growth would show the Americans’ confidence in their president better than anything else. In that context, Joe Biden outperformed his predecessor. In the first 100 days of the Democrat’s presidency, the S&P 500 grew 11%, while the Republican could boast just 5.3%. However, any impressions depend on when and where. If you see a bear in the circus, you’ll laugh. If you see a bear in the forest, you’ll soil your pants.


In contrast to Trump, who attempted to boost the economy by cutting taxes, Biden opted for massive fiscal stimuli. Both presidents experimented, but the pandemic ruined the Republican, and the current president’s performance is yet to be assessed. Both presidents found enemies to combat. Those were China and Jerome Powell for Trump and Russia for Biden.

According to research by Queen’s University Centre for Economic History in Belfast, the greenback may follow the pound’s fate if the US continues to use it as a geostrategic weapon. Before World War II, the pound served as the main reserve currency. Back then, the UK used its issuer status to impose various restrictions that eventually led to the sterling area’s collapse. These days, it’s the US that introduces sanctions, and US sanctioned countries give up the greenback. In Q4, the USD’s share in Russian exports dropped below 50% for the first time in history. The euro’s share grew by ten base points to 36%, on the contrary.

Times change. When girls have butterflies in the stomach that call for love, women have moths that call for a new fur coat. One cannot compare the current situation with the post-war one, but both presidents’ strategy – “I do bad things, but I do them well” – bothers other countries. In 2019, Europe, concerned about Trump’s trading wars, was ready to promote the euro’s role in the global trade. China had had that plan for the yuan for a long time already.

Could the US dollar weaken in April because some countries abandoned it due to sanctions and other related threats? The greenback has closed in the red zone for four straight weeks, the longest losing streak since July. However, in April, we learnt that the employment rate had grown by almost 1 million, GDP expanded 6.4%, inflation accelerated to 2.6%, and personal consumption had been the second-fastest since the 1960s. Joe Biden asserts America is ready to take off, but its currency is getting to the bottom. I can’t say that the 46th US president is worried about that. His predecessor would often say a strong dollar harmed the economy, only making it stronger on tension. The Democrat chose another strategy.


Back to top button