The United States can be divided into more than one country

Sheer madness

Usually I don’t comment on absolute madness but I do it this time because the person who said it, Jeffrey Gondlach is the CEO of DoubleLine Capital.

Gundlach says The United States can split. He also explains how to invest to achieve this outcome, and predicts that Trump will win the election.

Donald Trump is likely to win re-election, but regardless of the outcome of the presidential race, the United States may find itself divided into more than one country with unrest and violence gripping voters, investor Jeffrey Gundlach said Monday.

Can America lose its faith in democracy? “People are firmly committed to the concept of democracy, yet China has achieved tremendous growth and better infrastructure under authoritarianism,” Gundlach speculates. “What do we do when our results are inferior? Is it possible for us to change in this regard? Yes, it is possible. I think we will witness fundamental changes in the next six years.” He said this could even include the United States intruding into more than one country.

Now, Gundlach said, “I think we’ll move to an area with fleshy tails.” He thinks a rise in missile inflation is just as likely as a reduction in inflation or outright deflation.

He said, “I hate long bonds, but I still think you’re supposed to own some, and in a deflationary environment, you might want your portfolio to have that hedge.”

There is no constitutional provision

There is no provision allowing states to declare independence.

The United States will not allow this outcome if the country declares its independence.

We can argue whether a country should be allowed to secede, but there is no way to invest for an outcome that has no chance.

Fat Tails Versus Fat Tales

I agree with Gundlach about the possibility of fundamental change and fleshy tails but not the fat “tale” that he proposes.

Interestingly, the Fat Tails topic appeared twice today.

The author of Black Swan, a book on fleshy tails, raised the topic today as mentioned in Nassim Taleb accuses Trump Of incompetence and denial.

Mish