How the U.S. Election Could
Affect the Price Gold…
EVG Research Team here. Today is Election Day in the United States of America, and some gold bugs are claiming the outcome of today’s vote could have a huge impact on the price of gold over the next four years.
Is it legitimate research? Do we care? Should you?
These are questions we’ll look at today.
By the time you finish reading this newsletter in just a few minutes, you’ll understand exactly what we’re doing with our precious metal position…
… and whether or not it’s the right time for you to get in (or get out) of gold or silver.
But before we begin, we’d like to emphasize two important caveats.
First, we are not in the business of predicting short-term market fluctuations in the price of gold.
We’ve been buying gold because the fundamental reasons are too overpowering to ignore. That’s why we don’t fret over the wild price fluctuations within the precious metal market.
We know that once the current wealth cycle plays out over the next several years, any investment we make today is likely to return a very handsome profit.
Secondly, we are not making any political statement by presenting today’s analysis. In fact, the research comes from a British company that has no U.S. political affiliation.
They base their analysis strictly upon the impact the election may have on the price of gold (and silver) over the next 4 years. They do not take into account social issues or foreign policy agendas promoted by either candidate.
So, what is the analysis? What are their conclusions?
Well, essentially their research shows that…
An Obama Win Could Mean a
Boost in the Price of Gold
The analysis is simply an historical look at how much gold prices fluctuated since President Nixon took the U.S. off the gold standard in 1971.
The first part of their investigation looks at how much the price of gold went up (or down) during the tenure of a Republican president versus a president from the Democratic party.
Here’s what they found:
Gold has done quite well under Republican presidents, rising over 121% during Republican presidencies over the last 40 years.
But when a Democratic president occupies the White House, the figure is nearly triple, with gold rising just under 359%.
Now before you get too excited, please note that nearly 80% of the democratic rise occurred during the presidency of Jimmy Carter. During his four year stint as president between 1976 and 1980, gold skyrocketed by 285%.
So let’s rein that in to just the last 24 years (12 under Republican presidents and 12 under democrats).
Now we get a different picture.
During the 12 year reign of Bush I and Bush II, gold prices rose almost exactly 100% combined.
On Clinton and Obama’s watch, gold has risen only 75%.
But the real interesting piece of data is not whether a president was Republican or Democrat.
They found that….
The Price of Gold Always Goes Up
During a President’s Second Term
At least it has ever since the price of gold became free-floating under Nixon.
So if Obama is reelected, the historical trend suggests gold will be higher four years from now.
The British researchers who performed this analysis didn't offer any explanation why this might occur. But the phenomenon seems fairly simple figure out.
You see, in the United States, a president is limited to two terms. So when a president is reelected, everyone knows there will be change in presidency at the end of his second term.
People (as a general rule) don't like change.
Especially people in the financial world. Change in leadership makes investors nervous because they don’t know if current economic policies will be extended … or changed.
That means they aren’t sure which sectors of the economy will be good investments.
As we mentioned before, gold is the perfect chaos hedge. And while a presidential change isn’t always chaotic, the uncertainty it brings is chaotic for investors.
Financial markets always look forward. When all they see is uncertainty, they always hedge for that. And gold is the perfect hedge for chaos AND uncertainty.
What Happens to Gold if Romney Is Elected?
Some people feel that if Mitt Romney wins the election, the price of gold could go down. They base this on their (misguided) belief that Romney will run a tighter ship, and that his policies will somehow magically fix our broken economy.
Now Romney may in fact be able to cut spending better than Obama. His budget plan indicates he would.
But we call any idea that Romney wil fix the economy misguided because the systemic problems in our economy make it nearly impossible.
You see, under the eight year Bush administration, the national deficit grew from $5.7 trillion to $9.1 trillion. That’s a 60% increase.
During the (less than) four years of Obama’s presidency, the national debt has soared to $16.2 trillion. That’s 78% increase.
The debt is increasing now on an exponential curve.
How do you pay back all that debt? Especially when you have to pay interest on it?
You either debase the currency, or you default. To debase the currency, you print more money and flood the market with diluted dollars.
The Fed has been doing this in earnest since 2009, and it hasn’t helped the economy recover. It’s probably kept us out of an “official” recession, but we don’t think the 60 million people out of work care too much about “official” status.
Even a 6th grader can tell you the economy is broken.
Continuing with a policy of money printing will (eventually) cause runaway inflation.
Defaulting on the debt (or restructuring it) will cause massive deflation and another depression.
Neither candidate has put forth a plan that adequately deals with the problem. Frankly, we don’t think there is a candidate that could.
Romney's plan may be more austere than Obama’s. But it is only a plan to reduce the defecit spending. It doesn’t actually reduce the defecit itself.
In other words, Romney promises he will grow the debt at a little slower pace than Obama.
So at the end of four years he’ll have a $21 trillion dollar debt instead of a $25 trillion dollar debt?
Hang on folks! An economic crash is coming our way, and the wealth transfer will be breathtaking.
At The Elevation Group we understand that big picture … and how gold fits into it.
If Romney is elected and precious metals go down in the short-term we’ll see that as just another great buying opportunity.
If Obama is elected, we may not get that dip.
Either way, we’ll show you…
How You Can Be Confident With
Your Precious Metals No Matter Who Wins
We’ve been buying (and holding) gold and silver for nearly five years now. And while the “reasons” to own precious metals have not changed during that time, there have been a few other changes in the “rules.”
You see, there is a “right” way to buy (and sell) gold … and many “wrong” ways.
In fact, there are some huge “no no’s” you absolutely must avoid…
Including some HUGE tax repercussions if you don’t buy gold (or silver) the proper way.
This is not information your local coin dealer will tell you. You need to educate yourself first.
But don’t worry. You can get up to speed and know everything you need to be a savvy precious metals buyer in less than a day.
The EVG membership site will provide you with a complete section on buying precious metals … plus inside information on the tax implications you won’t find anywhere else.
In short, you’ll learn all the ins-and-outs of how to:
- Buy gold at the best price,
- Buy the proper kind of gold (you don’t want to screw this up!)
- Where and how to store your precious metals
- Maximize your tax advantage when you sell. including…
- A sneaky (but legal) way to sell all your gold Tax-Free!
- How to know exactly when it’s time to sell
- …and much, much more
If you’ve been thinking about buying gold or silver, this could be a great time to get in.
And even if you already own gold and silver, this information will help you know what to do with your investment as the wealth transfer begins.
EVG has everything you need to be confident about buying or selling precious metals:
Your Partner In Prosperity,
The EVG Research Team