Whether it's Obama or Romney, the U.S. "will continue to run large budget deficits," predicts Steve Saville
Regardless of whether the winner is Obama or Romney, the US Federal Government will continue to run large budget deficits and rapidly increase its indebtedness. Under a Romney presidency there would probably be reduced spending in some areas, but these reductions would be offset by increased spending on the military. ... Both of the two possible election outcomes are therefore negative for the US economy. ...
A reasonable argument could be made that the re-election of Obama would be the more bullish outcome for the stock market. After all, Romney has said that he would replace the pro-inflation Bernanke as Fed chief.
If it is true that an Obama victory will lead to more monetary inflation than a Romney victory, then an Obama victory is the more bullish outcome for
gold and commodities and the more bearish outcome for T-Bonds and the US$.
It isn't necessarily true that an Obama victory will lead to more monetary inflation than a Romney victory. For starters, Bernanke is certainly not alone in his ignorance about how monetary inflation affects the economy. Almost all the other senior people at the Fed are just as ignorant, so there is no good reason to expect that Romney's appointee would be any better. This means that there will probably be a lot more "QE" over the years ahead irrespective of who comes out ahead on 6th November. For seconds, the risk of the US becoming involved in another war would arguably be higher with Romney as president, and wars invariably result in rapid inflation of the currency.
Further to the above, both possible election outcomes will end up being bullish for
gold. However, an Obama victory would probably be the more bullish in the short term.
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