Investing.com – The outcome of the US presidential election may be too complex to predict, but Charles Gave of Gavekal Research believes that if Republicans win gigantic on Tuesday, investors should sell the French bond market and the French bond market as soon as possible, as is the case with the single market, economic problems will certainly get worse.

“I have no idea if Trump and the Republicans will actually win,” Gave said. “But I know that if they do win, and win big, investors should sell the euro and the French bond market as quickly as possible,” he added.

The warning is not unfounded. The eurozone is already struggling with an economic crisis, and France, which is struggling with constantly growing deficits and debt, is at the center of investors’ worries.

History also shows uncanny parallels between the current situation and the 1980 U.S. election, Gave suggested, highlighting Ronald Reagan’s victory in 1984, which ushered in significant changes in economic policy.

A similar shift could occur if Republicans took control of Congress and former President Donald Trump won the election and enacted his tax cuts and plans to shrink the federal government, then the return on invested capital in U.S. companies would likely boost, as would debt.

“Higher long rates in the U.S. will also push up long rates in other major economies,” Gave said.

This will be a stern problem in France, Gave warns, with rising deficits and debt without offsetting compensation in the form of faster economic growth.

“Soon France will be as bankrupt as Latin America was in 1982, Asia in 1997 or Greece in 2011.” – he added.