The United States can be divided into more than one country

Sheer madness

Usually I don’t comment on absolute insanity but I do it this time because the person who said it, Jeffrey Gondlach is 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,” Gundlach speculates, “yet China has achieved tremendous growth and better infrastructure under authoritarian rule.” “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 that might 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 are 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 that the potential for fundamental change and fleshy tails is not the fleshy “tale” he proposes.

Interestingly, the Fat Tails topic appeared twice today.

The author of Black Swan, a book about fleshy tails, raised the topic today, as reported by Nassim Taleb, who accuses Trump of incompetence and denial.

Mish