Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

2012: A Political Year for Gold

Commodities / Gold and Silver 2012 Feb 13, 2012 - 02:10 AM GMT

By: Bob_Kirtley

Commodities

Best Financial Markets Analysis ArticleThis year our screens, radio and the media in general will be dominated by politics as electioneering goes into overdrive in a massive attempt to convince us that their man has all the answers. Alas, the political machinery has long since lost our respect, but that will not deter them and so we must endure this attack on our senses from all directions. The presidential elections in the United States is high profile at the moment but there are other very important elections also taking place, a few of which we touch on below:


Greece: Parliamentary elections in April 2012

D-Day for Greece was 20th March when a €14.5 billion bond repayment must be covered, without a bailout a default would have been unavoidable. Greece has agreed to a controversial package of austerity measures, in order to appease the eurocrats and the IMF in return for a 130bn-euro ($170bn: £110bn) bailout. For now Greece remains in the Eurozone, however, this is an agreement between an unelected government and the suits from Brussels. The riots that are taking place in Athens suggest that the people are most definitely opposed it. The election may produce a government that decides enough is enough and that Greece exits the Eurozone returning to some form of Drachma, in order to put an end to the social unrest that is building towards a violent outcome.

Europe's political masters desperately want to keep Greece in the eurozone in a show of solidarity, otherwise Ireland, Portugal, Italy and Spain could follow Greece and exit this so called financial compact, rendering the future of Euro as a currency in some doubt. At the moment it looks as though a bailout coupled with a crippling austerity programme will have to suffice. More importantly this bailout will pave the way for future bailouts for the other indebted sovereign states such as those mentioned above. The idea that money can be borrowed from indebted states in order to redistribute it to other indebted states is not the solution. New money will be required and the printing presses will go into overdrive thus further debasing the Euro and driving the demand for gold higher.

Russia: Presidential election on 4th March 2012

Vladimir Putin looks set to regain the presidency, so no real changes there.

France: Presidential election on 22nd April and 6th May 2012


The incumbent president, Nicolas Sarkozy, is trailing in the polls and has enlisted the support of Angela Merkel to give his campaign a boost. Should he lose, then France will elect either the socialists led by Francois Hollande or possibly the National Front led by Marine Le Pen. Should he win, Francois Hollande, has promised to spend 20 billion euros on hiring 60,000 extra staff for the police and schools and create 150,000 state-aided jobs. Where is the cash coming from to sustain such a programme, you guessed it, the rich people, big companies, etc. From what we can glean about the fragility of the french banking system this may not be as easy as it sounds. France could well look to the ECB for assistance and they will have to print more cash.

Mexico: Presidential election on 1st July 2012

Mexicans will go to the polls in order to choose not only a new president, but also new senators and federal deputies. The opinion polls, for what they are worth suggest that Mexico could have a new governing party. This could be interesting should Mexico ever reconsider the idea of using silver coins as legal currency, as muted by Carlos Slim some time ago.

Venezuela: Presidential election on 7th October 2012


On the 12th February, Venezuela’s opposition will participate in their own primary elections whereby they will elect the candidate who will face President Hugo Chávez in October. Until we know who the opposition will be and exactly what their policies are its difficult to conclude anything at the moment, but we will need to keep an eye on developments, especially regarding any proposals to do with the mining industry.

China: Party Congress Elections in October 2012


The activists for democracy in China may mount a challenge to the ruling Chinese authorities, however, we doubt that they can become a credible opposition in time for the October elections. Assuming the status quo continues then we already know that China no longer exports gold and is indeed an importer with imports expected to rise. There is also the increasing wealth of the people to consider and their long held trust in gold as a store of wealth. This coupled with encouragement from the authorities to invest in gold, suggests that gold prices will driven higher.

United States: Presidential election on 6th November 2012


The Republican nomination appears to be taking shape, although by no means certain, it looks like Romney could be the man. Had it been Ron Paul then a return to the gold standard would have been one of his top priorities and gold prices would have gone ballistic. Still there is a candidate there who has helped to put the spot light on the issue of dishonest fiat currencies such as the dollar and its inability to act as a store of wealth.

Incumbent presidents are usually hard to eject and we know that Barack Obama is a formidable campaigner, should he be re-elected then debt ceilings will become a thing of the past and dollars will be printed at whatever rate is necessary, in an attempt to cure all ills.

In conclusion the political element forms an important part of any investment strategy, but cannot be looked at in isolation as there are many more elements and metrics to consider before forming an opinion. However, when faced with the tough decisions our political masters lean towards the soft options, in the hope that their own popularity will not suffer. Hence reductions in public spending and debt reduction does not provide a winning platform for those who dream of high office. The 'spend now and pay later' policies will continue, backed by an ever increasing amount of cash and the rainy day will be pushed back once again, or so they think. This short term-ism is going to end and quickly. Debt is a hard task master and it will return with a vengeance with devastating consequences for one and all.

We will have to endure wild oscillations and gut wrenching swings as each news bite sends the herd galloping far and wide in search of a utopian shelter.

All of our financial futures are on the line now, so it is our responsibility to take time out and make provisions for what we see coming down the line. It's ugly and so we must do our best in terms of cushioning ourselves from outrageous fortune, so we wish you well with your survival plans.

For what it is worth, we look to the precious metals sector, totally and solely to act as a safe harbor where we can endure the storm. As we see it physical gold and silver will be the outright winners in this era of currency debasement. Along with the metals we also retain a core position of the associated mining stocks, although as we have pointed out many times, they are not without their own inherent risks and we have no intention of increasing our exposure at this time as the HUI hasn't convinced us that stocks are worth the risk.

Finally, as opportunities present themselves, we will sally forth with the occasional options trade, as volatility can be rewarding as our record clearly indicates.

The implementation of your survival plan is down to you and you alone, so please don't delay, start today and lay those foundations.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. Winners of the GoldDrivers Stock Picking Competition 2007  

DISCLAIMER : Gold Prices makes no guarantee or warranty on the accuracy or completeness of the data provided on this site. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This website represents our views and nothing more than that. Always consult your registered advisor to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this website. We may or may not hold a position in these securities at any given time and reserve the right to buy and sell as we think fit.
Bob Kirtley Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules