Hillary Clinton's landslide victory against businessman Donald Trump in the upcoming U.S. presidential election is all but a foregone conclusion at this point. Readers of this column will note I pointed out as much nearly 20 months ago. Trump has become the gift that keeps on giving for the former secretary of state and in exactly two weeks, there will be no more bows to untie. The one remaining problem for Clinton, however, is not whether or not Trump will lose, but how he will lose and the answer to that question may move global markets for some time.
Following last week's final presidential debate, Trump made it clear, that even if he loses, he will not go quietly. The Republican nominee has begun calling the election process "rigged" and has said Clinton will essentially "steal" the election. Asked whether or not he would concede defeat should Clinton garner the majority of Electoral College votes needed to win, Trump said he would only accept the results of the election should he "win." Speculation has begun that Trump's words are an attempt to convert the new-found popularity he has within some parts of the U.S. electorate into a new business venture. With the departure of Fox News executive Roger Ailes last month, Trump may move to setup a Fox competitor with Ailes while poaching Fox's top talent for a new television network.
While Trump's words may be an attempt to soften the blow this loss will have on his ego, they are both near-sighted and potentially dangerous to global financial markets. The strength of the United States broadly and the strength of the U.S. dollar in particular is based on transparency: Transparency at the Federal Reserve, transparency in Congress, and transparency on Wall Street. The Wiki-Leaks emails shed light onto the inner workings of the Clinton campaign and the line between the U.S. government, Wall Street, and even foreign governments is not as clear as the public may have thought. Advisors to lobbying firms appear to simultaneously advise then-Secretary Clinton, perhaps without her knowledge. Questionable advisors lead to questionable policies.
Imagine a scenario on Wednesday, Nov. 9, Trump holds a press conference in which he contests the results of the election. He again calls it "rigged." It reiterates that the Clinton political machine "stole" the election. What then? He goes on to call on his supporters to protest the election. Thousands protest, maybe hundreds of thousands. In states where "open-carry" laws allow the protestors to protest while fully armed, would the protests get out of hand? Law enforcement is called in. An errant shot goes off, a protestor is shot, then what? It's not difficult to see how a simple protest against the legitimacy of the election could very quickly turn into a violent scenario with guns drawn and shots fired.
If only 10 percent of Trump supporters protest, that would mean literally millions of people. Continued protests of the election would lead to a very awkward transfer of power and oath of office for President-elect Clinton. Prolonged wide spread protests would be devastating for consumer confidence and the broader economy. The already fragile post-Great Recession economy would continue to stagnate. Trump, never known to shy away from a fight, probably continues to fan the flames among his base.
There is a real divide among the U.S. electorate and this election will most probably deepen that divide. The major internet outage on Friday in the United States crippled much of the commerce done online and may be only a harbinger of what's to come. If Clinton is correct and the Russian government is behind the release of her advisors' emails and if the "distributed denial of service" attacks that took place last week were also a part of the state sponsored terror against the United States by Russia, then Trump's current rhetoric could end up being more than just a sore-loser whining. In an environment where millions of Americans oppose the government, any blow to said Clinton administration would be welcomed by Trump supporters.
A real-life "Mr. Robot" scenario in which disenfranchised members of society use internet malware to bring down governments and financial markets they see as "rigged" would wreck mayhem. Trump's continued attack on the legitimacy of U.S. democracy in general and the upcoming election in particular needs to be answered and transparently dismissed. Failing to do so now, may be as disastrous as a Trump presidency itself.