Whatever you say about the rise of China and India, and the spreading of wealth across the world, America remains the most powerful nation on earth. And as Barack Obama has shown, if this power is used well, it can be an incredible force for good.

That’s why the forthcoming election will have an impact beyond the US, on the global economic and business environment, and on stock markets such as the FTSE 100.

America faces a stark choice

And I think it’s even more important because it pitches Donald Trump against Hillary Clinton. America faces a stark choice: does it want to cling on to the past, and to the vestiges of earlier glories, or should it aim for a progressive, optimistic future?

I see Hillary as continuing Barack’s drive for a better environment, for gun control, for fairer healthcare, and a balanced approach to immigration. She aims to build 500 million solar panels across the States, and generate enough renewable energy to power every home in America.

I see Donald as resuming George W Bush’s aggressive, nationalistic approach. He has little interest in protecting the environment, ploughing on with oil, coal and fracking. Despite high gun crime, he’ll do nothing to control the use of guns. He wants to repeal Obamacare, and he will try (I suspect unsuccessfully) to ban immigration.

What’s more, the impact I think he’ll have on the world could be similar to that of George W Bush. Even though some of Bush’s policies were actually quite moderate, his populist, demagogic approach created quite the wrong impression around the world.

Keeping my fingers crossed for Hillary

Remember that during his presidency we had 9/11 and reaction was the invasion of Afghanistan and Iraq. And the seeds were sown for the Syrian civil war. A strong part of any presidency, and people shouldn’t be afraid to say this, is marketing. You have to set the right tone. Trump, if elected, would have to be very careful not to repeat the mistakes of George W Bush. The world is finally looking ahead to the future. It can’t turn back to the past.

Whether Trump or Clinton is elected, there will have to be a strong pro-business stance to help both the USA and support stock markets like the FTSE 100. Trump has, at least, recognised that his country’s manufacturing industry is suffering badly because of intense competition from China; the pretence that everything is fine and dandy can’t be continued. Yet his approach of increasing protectionism is, I think, the wrong one.

Instead I think America must do what Japan has done, and reflate drastically, first with standard QE, and then with helicopter money – printing money to invest, or to provide a universal basic income. I’ve been disappointed to hear none of the presidential candidates even mention the word ‘reflation’.

Fears about what Trump will do if elected could have a negative effect on the FTSE 100. Whereas Hillary, if she can pay more attention to the faltering American economy, could produce a relief rally. That’s why I’m hoping that it will be Hillary that enters the Oval Office in January.

Carry on investing

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Prabhat Sakya has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.