Batten down the hatches to survive 'Storm Donald'!

What can we expect from a Trump presidency?

This is the man who, after all, the last time around, wanted to buy Greenland, bomb Mexico and shoot Black Lives matter protesters.

Wall Street Journal reporter Michael Bender wrote that when top general Mark Milley refused to carry out his ‘shoot’ orders, Trump said: “Well, shoot them in the leg – or maybe the foot. But be hard on them!”

Trump was also talked out of bombing Mexico “to take out drug labs during his first term, but he hasn’t let go of the idea,” Rolling Stone magazine reported.

“‘Attacking Mexico’…is something that President Trump has said he wants ‘battle plans’ drawn for,” a source familiar told Rolling Stone last year.

By all accounts, this time Trump will not be thwarted as he has spent the past four years ensuring that he is surrounded only by ‘Yes people’. 

 “He’s complained about missed opportunities of his first term, and there are a lot of people around him who want fewer missed opportunities in a second Trump presidency,” Rolling Stone said.

Yes, we survived Trump last time.

But this time there will be no Mark Milley (whom Trump later said deserves DEATH (his capitals)) and Trump will have full backing from powerbrokers in a House and Senate now in the hands of a Republican party firmly controlled by Trump (which wasn’t the case the last time around).

Trump intends to fire tens of thousands of Government employees and deport tens of millions of immigrants “starting with the worst ones.”

If he actually does this, the US economy will take an unquantifiable hit from the sudden disappearance of a large portion of its civil service and cheapest source of labour.  

Some of his economic proposals are also ‘off the wall’, such as partly underpinning the dollar (the most important currency) with Bitcoin, one of the world’s most volatile assets.

Trump also wants a say in deciding US interest rates – normally the fiercely-protected reserve of central banks in well-run economies.

Trump appointed the current Fed chair Jerome Powell who resisted the President-elect’s encroachment on interest rate policy before.

But the Wall Street Journal reported this week that “Trump has said he should be consulted on the Fed’s interest-rate decisions, and a group of his allies drafted proposals earlier this year that would require candidates for Fed chair to privately agree to consult informally with Trump on the central bank’s decisions.” 

And yes, of course, Trump allies also want to give him the power to hire and fire ‘Fed’ chiefs and board members.

As things stand he could, as president, only reappoint them when their term of office expires.

And even that lever was denied to Trump in his first term as his own party cast doubt on the independence of his appointees. Now, few Republicans would dare to defy him.

Removing the keystone of central bank independence in the world’s biggest economy would send shockwaves through the financial world.

Populist politicians would love the ability to lower interest rates to curry favour with voters. 

But we’ve seen the potential impact of an unpredictable politician like Trump influencing loan rates. Turkish president Erdogan – one of several ‘strong man’ rulers admired by Trump – caused economic chaos by interfering in such decisions in his own country. 

The cast iron rule of central banking is that higher interest rates reduce inflation. But Erdogan bizarrely made election promises to keep interest rates low – claiming this would instead reduce rampant inflation!

It didn’t. Turkish inflation rocketed to nearly 90% in 2022 – a near-doubling of prices – causing a devastating cost of living crisis (ten times worse than our recent one.)

What Trump does with Ukraine could also potentially cause economic chaos across Europe.

He talks tough but seems cowed in Putin’s presence calling his invasion “a genius move.” His vice present-elect JD Vance has called for the withdrawal of all aid for Ukraine, which would lead to a flood of refugees and a spike in defence costs across Europe. 

One recent report put the cost of a Ukrainian battlefield collapse at €94 billion to Germany alone mainly due to additional refugees and defence spending. 

While sober-faced analysts can crunch numbers on shares and currency fluctuations, the potential cost of having a man who’s borderline bonkers running the world’s biggest economy is impossible to estimate.

What will be cost of all the chaos? 

But one thing’s sure – it’s going to be a hair-raising rollercoaster ride. 

So buckle up! Here's how:

Rainy day fund

How much have you got stashed away for a rainy day?

That’s a question we should be asking ourselves after the election of Donald Trump as the 47th President of the USA.

Trump’s reign may well turbocharge the US economy – or it may descend into chaos.

But for Ireland, many of his policies are laden with risk, if not downright catastrophe, with little if any upside.

Trump threatens a trade war with Europe by ramping up tariffs on exports to America, with many Irish products from butter to whiskey in his sights.

He’s also intent on lowering US corporate tax and luring US multinationals back home.

This threatens our solvency as a nation with almost a third of Government income coming from corporate tax, mostly from a handful of US multinationals.

Trump also brings chaos and conflict that is hard to price into the markets but is already being unleashed, as we described.

Meanwhile, the stock markets which had already hit record heights are teetering at what some analysts see as unsustainable levels – as are, arguably, Government debt levels.

So now seems a good time as any to ‘batten down the hatches and set up a rainy day fund if you haven’t done so already.

This is a bank account where you can readily access cash…usually an ‘on demand’.

And even if you have one already, you might need to bump it up – or review the interest rate you’re getting.

Irish banks are pulling a fast one on sleepy depositors who leave an extraordinary amount of money earning practically no interest.

The latest Central Bank figures show we had €158bn in short term deposit accounts at the end of September earning practically nothing.

Yet, all this money could literally generate billions in interest by switching to one of the better deals we outline here.

With so much money on deposit – almost €40k on average for every adult in the country - you’d think, most people would have plenty of money set aside.

Yet that’s an average figure showing that some people have an awful lot of money on hand – while many others are barely scraping by.

Many people are shockingly ill-prepared for a sharp downturn, despite the multiple shocks we’ve had to our finances in the past decade and a half.

One in eight people can only cover their costs for a month or less in the event of a crisis, a report by the Competition and Consumer Protection Commission (CCPC) found last year.

This month, another study showed that one in four (25pc) Irish adults have less than €500 set aside for a rainy day.

And almost one in ten have no financial cushion at all, the survey by Capital Credit Union found.

Even those that do have a rainy day fund…don’t have that much in it:

• Two thirds have less than €5,000, while more than half (53pc) have less than €3,000.

• More than three in ten people in their 30s have less than €500

• More than one in ten people aged between 30 and 60 don’t have any cushion at all.  However, those in their 70s are the least likely (5pc) to be in this position.

So what is a rainy day fund, how do we set one up and who pays the best interest?

You’ll need access to your money, so check out instant access deposit accounts.

As you’ll see from our table, the best deals are from online accounts. These take about five minutes to set up and you’ll need a digital proof of identity such as a passport.

The top rate of 3.36% at the moment is offered by BUNQ, a digital bank.

Trade Republic, a share dealing platform, also pays decent interest on your deposits.

Raisin.ie is another great resource. It compiles the best interest rates from banks across the Eurozone and makes them available in Ireland on  its website.

Revolut also pays rates on deposits of up to 3.5% but only if you pay extra fees for a premium bank account.

That may be worth doing for a range of other features but it complicates the sums when it comes to comparing bank accounts.

The comparable rate from Revolut – i.e. one with no fees involved – is the 2% deposit rate paid on its  standard free account, although that’s still decent compared to Irish banks.

After that, the rates drop sharply to An Post’s 0.75%, although this is tax free which bumps up the real rate of return above 1% if you have to pay DIRT.

That’s well above the rates offered on demand by Irish banks, which can be as derisory as 0.01% (Yes, we’re looking at you PTSB).

How can banks get away with paying such ludicrously low rates on such a vast amount of money?

The answer is simple: because we let them!

So get switching!

Entity	Rate	I yr interest on €10k
Bunq	3.36%	€325
Trade Republic	3.25%	€336
Nordax (Raisin)	3.25%	€325
Hoist Sparen	3.16%	€316
Revolut	2%	€00
An Post	0.75%	€75
EBS	0.25%	€25
AIB	0.25%	€25
BoI	0.10%	€10
PTSB	0.01%	€1

Rates from ccpc.ie  (apart from Trade Republic and Revolut)

Regular savings accounts

Another option for building up a rainy day fund is a regular savings account.

And this is where Irish banks are a bit more competitive.

Bunq has the highest rate but the Irish banks aren’t far behind.

But why are they so competitive with these accounts and while the interest on their general demand accounts is so paltry?

Again the answer is simple: because the sums involved are quite small as these are specialist accounts with restrictions on how much you can put in.

The banks boast about putting up these rates in press releases when interest rates change to cover up for the fact that they pay so little on the vast majority of our savings.

But there’s no harm in taking advantage of the decent rates on offer – even if it’s for a relatively small sum until you build it up.

Regular savings	Rate
Bunq	3.36%
Bank of Ireland	3%
EBS	3%
AIB	3%
PTSB	2.50%
An Post	1.75%*
*Tax free

Rates from CCPC.ie

Pay off debts

Another way to prepare for a rainy day is to pay off your loans, starting with credit card debts.

It makes no sense to pay 30% or more for a credit or store card debt hanging over you at any time – and especially not when there’s a threat of a sudden downturn.

If you’re sure you can clear the debt within a certain time period, you could switch to a new credit card that offers a low interest rate on balance transfers.

But don’t be lured by short term offers, the best ones are for 12 months rather than 6 or even three even if you have to pay a small amount of interest – and watch out for the rate you’re coming onto after that.

For example, unless you can clear the debt quickly, AIB’s 3.83% for a full year is better than Avant Money’s 0% over even nine months – where you could end up getting lumped with 23% interest for 90 days.  AIB’s basic 17% rate on this card is also lower than most. 

Best Credit Card Switching deals

Provider	Switch Rate	Duration	Regular rate
An Post	0%	12 months	22.90%
AIB Platinum	3.83%	12 months	17%
Avant Money	0%	9 months	22.90%
PTSB ICE	0%	6months	22.53%
Bank of Ireland Platinum	0%	7 months	19.60%

Rates from Switcher.ie