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How a threat of impeachment affects the economy

This is an important topic because in many countries people think that a threat of impeachment does not cause any problem at others departments of a nation. The population thinks that it is needed to express themselves but, we truly have to carefully consider the attitudes we take. Expressing dislike through marches and speeches seems to be something revolutionary mainly for the youth, but have you ever thought about how the economy “behaves” when a president of a country is undergoing an impeachment process?

Well, if you invest your money at the stock exchange (or if you want to) and you do not know how these kind of things can affect an investment, pay attention to this article.

In 2015, in Brazil, when our first woman president was impeached, Mauro Calil that is a specialist in investments of  ‘Ourinvest Bank’ told to a famous Brazilian website named ‘UOL’ that when an impeachment is happening, government worries about politics and they usually care much less about the economy and tax adjustment. As a consequence a common trend in this period is the rising of unemployment.

An impeachment process would mean different things depending on the president that is undergoing the process. Basically, if the acting president is not reliable according to the foreign market there is an improvement in the economy because he or she is going to be probably impeached. It is totally the opposite if the president seemed to be reliable to the foreign market showing good results or if his vice president takes office without offer good or intelligent proposals for the future, though.

As I summarized the mainly point, let’s analyze USA situation!

On September 24th Trump has attacked China’s trade practices and this attitude induced a pessimism on investors. They feared the possibility of a trade war between these two countries. Remember that Trump wanted to place tariffs on products imported from China in order to stimulate the domestic production?

That’s it! Then, we had news about his impeachment process. On the same day, according to CNBC, stocks fell “amid concern the impeachment inquiry would hamper the economy”. As I told you a president that seems to be reliable, that show good results when he is undergoing this type of process, the economy fells.

Of course! Can you remember all the things he did for United States in the last years? Well, someday we can list most of these things but for now I wanted to emphasize that at the end of two years in office: the country’s unemployment rate became the lowest since 1967, the GDP (Gross Domestic Products) growth rate reached 4.1% in 2018 and a tax reform has been promoted by its administration.

What I want this article to do for you is to stimulate you to speculate. To be sure about the economy situation of US and your investments in the stock market (if you invest, of course) you need to keep up with news!

References:

https://economia.uol.com.br/financas-pessoais/noticias/redacao/2015/12/03/saiba-quais-os-efeitos-do-processo-de-impeachment-de-dilma-no-seu-bolso.htm

https://epocanegocios.globo.com/Dinheiro/noticia/2016/05/como-o-impeachment-afeta-seus-investimentos.html

https://www.cnbc.com/2019/09/26/trump-warns-again-that-the-stock-market-would-crash-if-he-is-impeached.html

 

 

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