Gold Cares Nothing About U.S. Elections
Source: Whiskey and Gunpowder, Charles Goyette (10/18/10)
"Gold doesn't seem to care about the Republican's prospects this fall."
Unless Republicans will go into the next election cycle having taken on healthcare, there's not much hope that they'll do anything meaningful about fiscal policy. Announced on September 23, the Republican Pledge to America promised to save "at least $100 billion in the first year alone."—$100 billion/year? One week later, the federal debt had already grown another $100B.
Some real money could be saved rolling back the American empire. Congressman Ron Paul and others calculate total war and foreign spending at about $1 trillion/year. In this context, a return of the Republicans reminds us of Talleyrand's comment on the Bourbon dynasty that returned to the throne of France after the abdication of Napoleon: They "had learned nothing and forgotten nothing." Republicans seemed to have learned nothing and forgotten everything. Betraying a hubris not seen since Bush set off to "rid the world of evil," the pledge from November's likely winners includes "bringing certainty to an uncertain world." Republicans do take their military Keynesianism seriously. On the monetary front, the Fed is counting on inflation to kick-start economic growth. Money printing is its religion—now with new names: liquidity operations, deficit accommodating and quantitative easing (QE).When Chairman Bernanke said something euphemistic last week about additional purchases, gold shot up again. The USD moved decisively lower; down 12% since June.
Where does one weather a currency crisis? . . .Gold. It keeps hitting new all-time highs and doesn't seem to care about the Republican's prospects this fall.