Gabriela Berrospi is a Latina entrepreneur and founder of Latino Wall Street, a Spanish-language financial education platform. She was born in Lima, Peru, and studied at New York University. She spoke about how the economy is doing in this election year and said that the memory of the level of activity during Donald Trump's government could be decisive for some voters in November, compared to the criticism of "Bidenomics."

In an exclusive dialogue with LPO, the Latina investor details what is coming. The reason why almost full employment, lower inflation and an economy that resists recession are not enough to improve the valuation of the current government and what can happen in the market in terms of uncertainty if there are events similar to January 2021.

Trump arrasó en Iowa y dan por liquidada la pelea republicana por la candidatura presidencial

How do you assess the economy at the beginning of the year? Are you worried about the level of federal and family debt?

We are starting the year with a record debt in the United States, and not only national debt, that has exceeded 34 trillion dollars, but debt at the consumer level. For the first time, we have crossed $1 trillion in credit card debt. This doesn't take into account mortgages, cars, or student loans. So, obviously we have a debt problem at the national level, at the consumer level in general, and the result is that it will become more complicated if rates remain high. So we are in a context of high rates because we have had rate increases for a year and a half. And that's obviously a challenge when there are records of debt.

There is definitely a better memory. If we look at it in simple terms, that is, the way a normal person thinks. In other words, what was my life like those four years when Trump was president. For most it was better. But that doesn't mean it actually helped us.

It seems that this year rates are going to start falling and there will be some relief.

We have a projection that rates will finally begin to be cut this year and this may begin as early as March, in the first quarter of the year. So right now we are seeing a financial market, for example, that is being influenced by interest rate projections. We have the first meeting of the Federal Reserve on January 31, and they are going to talk everything about inflation, rate cuts, everything related to the economy. So that's like our guide. The official meetings of the Central Bank, but there is a great probability that in March we will begin to cut rates and that will trigger a series of things. There is a projection that all markets will be boosted, which is what generally happens, but that this will affect people's economy, because when you increase rates, you control inflation and prices, but when you cut them, inflation can get out of control. So, it is more complicated for the consumer.

Still, it would be a positive thing, right?

The debt is going to be cheaper: cheaper money, fewer fees. In fact, the risk is that prices get out of control. So, for the investor it can be very good and it will be very good this year due to everything that is happening, but for the consumer the projection looks increasingly complicated at the prices and debt levels.

Does the Latino investor see these positive effects that some Bidenomics issues have had in some way? Or do you see that the Latino consumer and investor does not see that as much and continues to have a critical view of the government's economy?

What I see is that there is general dissatisfaction with the current administration, and the same happens with the situation of the people at the moment. Is your money enough? What do you think of the prices? What about your lifestyle? And based on that, on what affects them, people base their opinions, their decisions, their votes, so right now there is a lot of discontent in that sense. I know that the Biden administration says that the labor market is strong, that jobs are good, they are solid, but if you analyze that economic data on jobs, the jobs that are being created are the best, their quality is not the best. There may be a number of jobs, like part-time jobs, many government jobs that have been added, which in the end we pay for because we are the taxpayers, but of good quality, full-time jobs that give you all the benefits, there is less of them.

So it is not as linear as the government says, which has created 2.7 million jobs in 2023 and that everything is fabulous.

It is very confusing sometimes when you see economic data and it shows that there are more and more jobs and leaders say that the labor market is getting stronger. But you really know about economy and numbers, and when analyzing this, you realize that that is not the case. Now we have a record of people who have two to three jobs and that causes a weak labor market, because if you have to work two to three jobs at the same time, that does not make a strong labor market. A strong labor market means you have a job and with that you can pay for everything, but you need two or three jobs, it's not quality, it's quantity. That actually makes us conclude that we have a weak labor market.

And those are the things that directly affect the voter.

This affects people on a daily basis, the issue of prices, the issue of jobs, salaries, everything, and they are not happy with the current administration. It's what I see, it's what they write to me, it's what they share with me, but the investor is very excited because there are many events, a lot of innovation happening right now about the financial markets in general, the stock market, cryptocurrency. That we have all the potential due to the issue of rate cuts and presidential elections to be able to boost all those markets even more, although it may seem crazy, it's like, how much can they go up? There is room to go up with everything that is coming this year.

We are starting the year with a record debt in the United States, and not only national debt that has exceeded 34 trillion dollars, but debt at the consumer level. For the first time we have crossed $1 trillion in credit card debt.

There is also a whole additional "seasoning" for the elections that will be very polarized with Trump getting stronger from the Iowa Caucus.

Trump is very strong because he is not really a politician. Trump is a businessman, he is a man who has created an empire and knows how to make money, so he did not owe those four years of his position as president to create a strong economy, and in fact, people are happier in their daily lives due to how they were with Trump. But he was also one of the people who in 2020 had to do all this money printing, he had to approve all these systems that in the end caused us more inflation, so sometimes people like to excuse a person or another, or say who is better, who is worse, but if we analyze things carefully, it is not that overnight we ended up with 34 trillion debts, it is that we have been carrying this for a long time and this got too much worse in the pandemic and for who was president in 2020.

There is a better image of Trump on the surface of voters.

Those are things that we have to think about, I invite people not to just see the surface or look for a culprit. Who is better, who is worse, but to see it through the analytical, historical point of view and see when that debt skyrocketed, when the money record was printed, it was during the pandemic and everyone was receiving checks of stimulus and it seemed like this was never going to end. Rates were at rock bottom, everyone was buying properties, Trump was sending checks to people with literally his face, as if to say I'm sending you the stimulus check, and it was very good marketing and everything, but at the end of the day it complicated the issue of purchasing power too much.

Understand that, there is no such thing as free money, in the end you end up paying for it with inflation or with taxes, so it ends up coming out of your pocket in one way or another. Just because you received a check for 600 dollars from the government does not mean that it was free, you are going to have to return it, of course, in some way or another. So that's what we have to think about.

Do you think then that people have a better memory of Trump's economy than of Biden economy?

There is definitely a better memory. If we look at it in simple terms, as I think, a normal and average person is not going to overthink or do much analysis, but rather what my life was like, how my investment portfolio is, or how the prices were. In other words, what my life was like those four years when Trump was president. For most of us it was better, but that doesn't mean it actually helped us. Maybe at the time it was seen, but then it complicated us in other ways and sometimes people don't understand that, they don't connect the two things. And now Biden we have wars, we have high prices, we have many jobs but not quality ones, etc. So yes, I think it is very possible that people see it that way, that they see Trump as a business leader, that he does know how to manage the economy, that he is not the typical politician... He is very disruptive, very different and very intelligent.

What I see is that there is general dissatisfaction with the current administration, with the way people's situation is. Is your money enough? What do you think of the prices? Your lifestyle? And based on that, on what affects them, people base their opinions, their decisions, their votes. So now there is a lot of discontent.

Could it be decisive for the election?

Yes, because unfortunately most people do not have adequate information, they do not understand exactly how things work, the cause and effect, they look at the surface and it is natural, it is natural for a human being to think, who did I do better with? And based on that I have made my decision, in fact it is human for people to think like that. So, I do think that that is why Donald Trump is so strong, because people make a comparison and they felt more comfortable then, more prosperous, calmer, there were fewer wars, etc. I mean, there are many things, many things that were better before and that is why it is very possible that he will continue to be the candidate who dominates these elections.

Is Wall Street already taking sides with any of the candidates? What is the market predicting?

Obviously everyone is looking at what can happen with stocks and so on, and the volatility that all of this can bring. Yes, definitely volatility, everyone should expect volatility. When a lot of uncertainty is created, that is, not knowing, that is not good for the financial markets. When something happens with a candidate or something is not clear, a black swan appears, and that is an ugly surprise. All of this can have a negative impact because the market does not like uncertainty. And a lot of that can happen in an election year. But if there is more certainty and we have clear results and we are not trapped in a whole issue of who won and so on, it would be better. If we don't know what is going to happen and we are waiting for days... we are supposed to know on the day we have to know and that's it, then the feeling of certainty versus uncertainty will depend a lot on that. Certainty is good and it is bullish for the markets. Everything that is uncertain affects negatively.

Translator: Bibiana Ruiz.