Late Tuesday afternoon, I sent the Wednesday daily to Laura, who edits and formats my information, so she could ready it for publication on Wednesday morning. It was mostly a compilation of the pre-election views from many of my favorite sources. Frankly, I never expected the results of the election to be known until days after the election – I thought it would be that close. The election was anything but close. I turned the TV off by 10 p.m. Eastern Time. It was already clear that Obama was in for a second term.
When I awoke at 3 a.m. I decided to scrap the daily and start anew. I want you to have up to date information and the elephant in the room now IS OBAMA. So I decided to re-write the daily – after 3 a.m.
One person who got it right was Richard Russell. Monday, before the election, he wrote:
“That’s the way I see it. Why the stock market at 4 p.m. Sunday suddenly decided that Obama is in for a second term is beyond me. But the above is the way I interpret the dramatic events of the weekend: Obama is in, Bernanke is to remain as Fed head, and ‘QE to infinity’ is to remain.”
Question — What’s coming up after the election?
Answer — I’m going to abide by the verdict of the stock market and state that Obama will be re-elected for another four years. If that’s the case, here’s what we can expect: (1) a liberal Supreme Court, (2) a blocked or stymied government, and (3) a permanently big government. Obama wants a permanently big government. His current budget plan calls for spending to reach 23% of GDP by the year 2022, which would be the highest spending, except during WWII, in the nation’s history. All the new spending will come from entitlement programs, and mainly from Obamacare. By 2016 Obamacare will fundamentally reshape the way Americans receive health coverage — with millions of people forced into subsidized government-run exchanges after their companies drop coverage, plus roughly 17 million people added to Medicaid. Obamacare’s regulations and mandates will fundamentally reshape the insurance market, making the rules virtually impossible to unravel. As is the case with other major new entitlements, once on the books, the fight will no longer be whether to keep it, but over arcane rules, cost controls, benefits and the like.
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A few weeks ago he also wrote that there was no way Romney could win because he couldn’t get enough of the Electoral College votes. Russell pointed out that for Romney to win, he needed to sweep virtually every “swing state” to get the necessary Electoral votes and that it would be virtually impossible. Well, Russell was right, as usual. Obama won the Electoral vote 303 to 206. Romney needed to win in Virginia, Ohio and Florida. He lost all three. It was over early in the evening. This was not a surprise to me. I expected an Obama victory, though certainly not by the margin that he won by, but what did surprise me was that Obama also won the popular vote 50% to 48%. Obama actually won a majority of 50%. He has his mandate now and we shall see what he has up his sleeve during the next four years.
Most of the pre-election polls seemed to favor Romney, or at least view the election as a toss-up. But when people walked into the voting booth, even with the economy in shambles, and unemployment near post-depression highs, the voters chose the status quo.
This is very telling – the message is clear. A majority of Americans don’t have a clue how bad things really are, but how could they? Our national media (MSM) feeds them lies and distortions. If every American read Jim Sinclair, Richard Russell and John Williams, the results would have been different. But most Americans are either completely un-informed or mis-informed.
The Democrats still control the Senate and even increased their majority to 51 to 44. The House, of course, remained in control of the Republicans 228 to 180. There will be more gridlock in Washington and that is probably a good thing. Neither candidate had a plan to fix the fiscal problem and as I have written, along with Bill Holter, Andy Hoffman – it is too late to fix the problem. It is mathematically impossible, so in a sense, the cartoon below says it all:
Mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray that we have the wisdom to choose wisely.”
I know that many of you are disappointed, and worried over Obama’s re-election. And many of you are angry and frightened. You should be all of the above. But not just because Barak Obama won. Most of our biggest problems are beyond solving, short of national bankruptcy and/or major dollar devaluation. How big are the problems facing Obama? The next cartoon puts things into perspective:
The thing is, I don’t believe an election as important as this one is should be decided on social issues and most of the people I know personally, who voted for Obama, did it based on social issues like gay marriage and abortion. I’m all for women’s rights and for equal rights for gays, but these issues should NOT trump the importance of our fiscal problems, which threaten to overwhelm us all. This was not the time to vote based on social issues!
Well, that’s how I feel, but my feelings and $1.38 (the national average) will get you a cup of coffee. By the end of Obama’s second term, the cup of coffee will probably cost at least $3 (probably more). Everyone who voted for Obama and who lives on a fixed income, a pension, Social Security, annuity or bonds will suffer.
My view has been that the party that wins, loses! The Democrats will be blamed for the disaster that is coming our way and they will be the party in power for the two consecutive terms prior to the “you know what” hitting the fan. I absolutely expect that the Republicans will sweep the Senate, the House and the White House in 2016 but it may be too late.
Bernanke’s “experiment” with QE has to end with massive inflation and dollar devaluation. John Williams, a real American hero, is convinced that by next summer we will already be experiencing the early stages of hyperinflation! He wrote, “The next presidential term most likely will see the onset of a domestic, hyperinflationary great depression.”
This is the last thing anyone in their right mind wants. Hyperinflation is a wealth-destroyer that will spare no one. Your only protection going forward is precious metals and tangible things. Paper investments are the last place you want to be. I know, the only people who agree with what I am saying understand it without me pointing it out. I am preaching to the choir, because the rest of you, and those of you who voted for Obama still don’t get it. But you will.
My long-time friend, Jim Cook (Investment Rarities) says, “Obama will be good for our business.” He’s right. Gold doubled in price and then some, during Obama’s first term and it will do even better in his second term, but the real “cost” in terms of life-style and safety will suffer along with the rise in the price of gold and silver. That’s a bad trade-off.
Jim Sinclair, hinted that we would be better off with Obama than with Romney because without continued QE, the entire Western world would collapse within six months and Romney had promised to dump Bernanke and end QE. Jim Sinclair wrote:
Very few have any idea what trying to change the course away from QE to infinity will deliver to everyone’s front door.
To your front door, no matter how well prepared you are, it will touch every person in the Western financial world. The feeling of the touch will be prompt and just awful.
This is a situation where a candidate’s Dogma is going to get run over very hard by a candidate’s Karma. [Choose] wisely!
–In The News Today, November 4 2012
We now have three or four years max until the dollar succumbs to the destructive force of QE and gold rockets up to at least $3,500 and most likely much higher. That’s when we hit the wall and the “can” can no longer be kicked down the road. No matter how we prepare, none of us will escape unscathed. Still, I’d rather navigate through the rough times with gold and silver than with the dollar.
It’s now 5:30 a.m. and gold is up to $1,729.20 and rising – and silver is $32.23 and rising. $1,700 gold and $32 silver are in the rear view mirror now and $1,800 gold and $35 silver will be back again, before you know it. The Cartel and the funds used the threat of a Romney victory, a long shot at best, to smash gold and silver. Now that their excuse to be short is finished, watch them cover and go long and please don’t listen to Larry Edelson. His $1,450 has a snowball’s chance in Hell of materializing!
Before I launch into today’s daily, I want you to watch this short YouTube video:
I see no way that we can create an economy that is strong enough to overcome our debt and deficits, but it is not the fault of our young creative college students. No, lay the blame where it belongs, squarely on the shoulders of our politicians, both Republicans and Democrats.