Axios/Javier E. David/11-12-2022
“‘Political risk’ is an investment thesis used to evaluate developing economies with histories of weak governance and social instability. But the Jan. 6 riot, widespread mistrust of institutions and a polarized electorate are symptoms of an increasingly anfractuous politics making policy decisions less predictable for investors. Perennial fights over the debt ceiling are one example, but some say things could get considerably worse, in ways that may have a more pronounced effect on the US as a draw for global capital.”
USAGOLD note: Few worry about instabilities in the US political system reflecting on the overall economy and financial markets but things are changing. Axios references recent events in the United Kingdom as an example of how markets can react “dramatically to politics and policy.”
