Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

How Will the Election Outcome Impact Precious Metals?

Commodities / Gold and Silver 2016 Oct 19, 2016 - 12:07 PM GMT

By: MoneyMetals

Commodities By Clint Siegner writes: Metals investors wonder what this presidential election will mean for gold and silver markets. Since Nixon closed the gold window in 1971 and the years of price inflation that followed, presidents have largely ignored gold, the Federal Reserve, and other issues related to sound money. Today, the devaluation of the Federal Reserve Note – the explosion of debt and the eternal deficits which enrich bankers and the political class at the expense of the rest of us – is getting harder to ignore.


The looming national bankruptcy coincides with this year’s extraordinarily divisive election. Regardless of which candidate wins, the Washington DC establishment has already lost a great deal of legitimacy. Polls show well over half of the population will not support the victor. As the trust and prestige of our Federal government fades, the potential for social unrest and even wrenching change in governance and policy is on the rise.

That represents a wildcard for gold and silver markets which is impossible to predict. We can only say history shows gold and silver as key assets during periods of upheaval. If crisis is coming in the next presidential term, the people holding physical metal will almost certainly be glad they did.

We can find very little reason to expect either candidate will fundamentally change the country’s fiscal or monetary outlook.

For starters, it’s important not to put too much faith in what any president can do. Congress has final responsibility for spending and debt. No one is seriously predicting a transformation in that “august” body any time soon. You can expect the status quo. The next Congress will remain beholden to the deep state, and unaccountable otherwise.

Neither presidential candidate is making any sort of promise to address the basic problems of too much debt and crushing entitlement commitments – Social Security, Medicare, Medicaid, etc.

Hillary Clinton is nothing if not perfectly predictable with regards to the policies she will promote. Count on more of the same:

  • Making America safe (and profitable) for cheating banksters
  • Central planning of markets via Fed policy
  • Escalating the war on cash
  • Invading your privacy
  • Taxing you more
  • Waging hideously expensive and deadly wars

Donald Trump has made a lot of hay campaigning as an agent of change. But he isn’t making any bold promises to dramatically reduce spending and entitlements. He intends to increase military spending as well as infrastructure spending, both of which will invariably increase government debt.

He wants Americans to believe he can promote enough economic growth to make these burdens bearable. Is there anyone who still believes this tired old political promise after hearing it repeatedly for all these decades?

For anyone who does, we suggest taking a look at the many good arguments about why we’re past the point of no return when it comes to avoiding a debt crisis.

One problem (among others) with the notion of growing our way out of the predicament we’re in is that higher rates of growth could be accompanied by much higher interest rates. Do the math on what happens to the federal budget when interest rates return to levels closer to what we had in the 90’s. It isn’t pretty. Borrowing costs of 5% translate to an interest expense of a trillion dollars per year.

Tax receipts will need to grow enough to wipe out the current deficits, plus cover the additional borrowing expense. Growing our way out of the current mess is impossible.

For those who want to still believe the federal debt is manageable if the U.S. can expand GDP, we’d point out strong growth does not necessarily translate to reduced debt.

Just look back at the Ronald Reagan years and the Bill Clinton years – both periods known for economic growth.

There is a limit somewhere when it comes to the size of the obligations our government can service. Even optimists should admit the U.S. is currently on a one-way road to financial ruin.

A default is coming – almost certainly via massive devaluation of the dollar.

This election is the most fascinating we’ve ever witnessed. But the fundamental drivers behind precious metals go far beyond the office of president. That is why you should expect prices to be dramatically higher 4 years from now, regardless of what happens at the ballot box in three weeks.

By Clint Siegner

MoneyMetals.com

Clint Siegner is a Director at Money Metals Exchange, perhaps the nation's fastest-growing dealer of low-premium precious metals coins, rounds, and bars. Siegner, a graduate of Linfield College in Oregon, puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals' brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

© 2016 Clint Siegner - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 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