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Could a Bear Market Year Bring a Republican Landslide in 2016?

Author: David Yee
Created: 20 January, 2016
Updated: 16 October, 2022
2 min read

The Royal Bank of Scotland's economists warned investors last week to "sell everything" other than high quality bonds, citing Chinese instability and continued suppression of oil prices.

With January's huge slump in the stock markets, it's looking like there's the significant possibility of a long-term bear market.

IVN has been way ahead of the news cycle, reporting on the Chinese economic crises since last year, as well as questioning the benefit of long-term suppressed oil prices on the American economy.

All of this comes at a time when Americans as a whole have less than $1,000 in tangible cash assets, coupled with mounting debt loads.

Trouble is brewing not only in the financial sectors, but in the agricultural and consumer markets as well.

In the $1.4 trillion American food budget, staple foods like beef and eggs are well over 10 percent higher than last year.

The consumer markets are being hit hard as well, with Walmart, the world's largest civilian employer, announcing the closure of 269 stores and laying off over 16,000 workers.

It's the perfect storm for the American economy, but it could be even worse politically -- at least for the incumbent party.

Voters tend to have incredibly short memories at election time when it comes to the economy, and somebody is undoubtedly going to be blamed.

A party keeping the White House for more than 8 years has been tough in modern elections, but under potential economic chaos it will be almost impossible.

Politicians love to take credit for a bull market, but voters equally punish them for economic slumps, regardless of the real impact that American politicians have on the world economy.

And this is where voters really need a reality check, and a firm understanding of how globalization has changed the economics of the world forever.

But in the end, a bad economy for 2016 could give the Republicans the White House and both chambers of Congress by employing Bill Clinton's strategy of "it's the economy, stupid."

Photo Credit: Mark Van Scyoc / Shutterstock.com