Trump's Assassination Attempt: Is America On The Brink Of A Civil War?

The US Presidential election, which is closely watched by the whole world, showcased the dark side of democracy when former US President and current Republican candidate Donald Trump was shot through the ear at a rally in Pennsylvania on Saturday in an assassination attempt that sent shock waves through America.

This could trigger the US stock market to slump after hitting record highs last week as investors worry about political violence and more importantly, a possible civil war in the world's largest economy.

On the contrary, if the recent shooting boosts Donald Trump's election prospects, analysts predict that 'Trump-victory trades' might involve a stronger dollar and gold. This scenario could also see increased investments in sectors like energy and defence.

But At What Cost?

The assassination was attempted by a 20-year-old. There have been many incidents in the past few years where the younger population in the US has used guns openly in schools and colleges. That should trigger several serious questions for the nation's leaders to analyze. Should America have a stricter gun policy? Is American democracy under threat?

While US democracy may be in question, the disconnect between Americans' downbeat perspective of the US economy and its primary healthy well-being could not be broader.

The economy remains strong after the Federal Reserve's most intense interest rate hikes in 40 years. Unemployment rates are at their lowest since the 1960s, real wages are increasing, and GDP growth is above average.

But this hunky dory image hits a road bump when it comes to inflation - consumer prices which has a direct impact on common man's life.

While monthly inflation for June has fallen for the first time in June, the year-on- year CPI figure remains higher than the Fed's target mandate on 2 percent. And while GDP growth for now remains stable, Federal Open Market Committee in June projected just 1 percent economic growth for the financial year 2024-25.

Market May Face Monday Blues But That's Temporary

The US stock market may slip today after the Dow Jones Industrial Average reached an intraday record high on Friday, doing catch-up with two other primary US indexes in current broad-based market gains.

But broadly, the Saturday incident could push Trump to win this term, as he gained people sympathy.

Investors have often responded to the possibility of a Trump victory by driving up Treasury yields. This reaction is partly based on the belief that his economic policies could lead to increased inflation and higher debt levels.

Analysts have observed that since March, the S&P 500 SPX's performance has shown a positive correlation with the likelihood of a Trump victory. This trend is evident in both prediction markets and polling data.

Interestingly, this relationship seems to be influenced more by the desire for a decisive election outcome rather than specific policy proposals. Before March, stock-market performance had been positively correlated with Biden's chances of winning.

The US market is anticipating a stricter trade policy and more relaxed regulations on various issues, including climate change and cryptocurrency, under Trump. Bitcoin has surged approximately 7% since the incident.

One Inch Away From Civil War?

The recent assassination attempt on Donald Trump at a Pennsylvania rally underscores the deepening divide in US politics. Although Trump survived, one attendee was killed and several others were injured. Arie Perliger, a scholar at the University of Massachusetts, Lowell, believes that if Trump had been fatally injured, it could have sparked a civil war in the country, Scroll.in reported.

Perliger suggests that the attempted assassination may reinforce the belief among Trump supporters and the far right that they are being marginalized and excluded from the political process. He argues that political assassination attempts often aim to achieve broader political objectives quickly and effectively, beyond just eliminating an individual.

Impact on Political Dynamics

Perliger highlights that political assassination attempts have larger goals beyond killing someone - they aim to achieve political objectives swiftly. In highly polarized environments like the US, such acts can validate perceptions of marginalization among certain groups, further fueling tensions.

The increasing polarization has created an environment where political rivals are portrayed as enemies rather than opponents. This mentality undermines any potential for collaboration and fosters a climate where violence becomes a viable option for some.

The recent events at Trump's rally serve as a stark reminder of the volatile state of US politics. The incident not only highlights the personal risks faced by political figures but also underscores the broader implications for national stability if such polarization continues unchecked.