As expected, the mid term elections were mostly a non event other than the Democrats taking control of the House. That will certainly ramp up division even more and we can expect a lot of efforts to investigate and/or impeach President Trump.
This will all mostly be window dressing as with a solidly GOP Senate, impeachment efforts will go nowhere eventually. They might disrupt markets though and we can expect continued volatility there. We are due for a recession now so that might be likely to happen during these next two years. The Democratic take over of the House will provide Trump and Republicans with a scapegoat for that now which did not exist prior to this election. All this is pretty predictable.
I don't see anything from this election at this time that would lead to major monetary system change unless we get the new major crisis many have predicted for a long time now. So nothing has really changed much.
------------------------------------------------------------------------------------------------------------------------Unless something dramatic does happen to the overall economy and markets, it now seems pretty likely that President Trump will be re-elected to another term. I say this because we did not see a major voter revolt against President Trump in this election as some were expecting. Instead, we saw voters in some areas not happy with President Trump elect enough Democrats to the House to create a check on his ability to move forward much more with his agenda. So, we can expect mostly gridlock for the next two years.
Gridlock is not likely to hurt his chances for being re-elected because he will just blame the Democrats for being obstructionists and his voters will be fine with that explanation. If Democrats spend the next two years just trying to impeach him, that will actually probably play to his advantage in 2020. In some ways, the result of this election may have actually helped him out.
In addition, with the GOP winning key Senate races and governor races in Ohio, Florida, Georgia, and Iowa, he will have strong state level support in those key states in 2020. Also, the Republican side of Congress is now much more pro Trump, especially in the Senate where Senators who were critical of Trump were replaced with pro Trump Senators.
On top of all this, now if the economy and markets take a nose dive in the next two years, Trump now has the perfect scapegoat available. It will all be because the Democrats took over the House, blocked his agenda, and ruined the economy. We can predict this will be his talking point under that scenario. Again, it is almost a perfect setup to run for re-election in 2020.
Conclusion: As usual, after all the hand wringing and hyperbole, the election was really mostly a non event for a mid term election. The party in power always loses seats and this was a relatively minor loss from a historical standpoint. It will likely create full on grid lock once again, but we as a nation are pretty used to that anyway and many voters seem to actually prefer it.
Nothing from this election seems likely to promote any major changes in our monetary system or anything else for that matter for the next couple of years. Maybe they will pass an infrastructure bill, but it seems unlikely much else will happen. In the Senate, Presidential nominees should make it through quicker and easier now, but that should have little or no impact on the economy or monetary system.
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