 
Why voting Obama will mean higher gold prices
Who will you vote for next
week? Romney or Obama? Democrat or Republican? It’s not a great choice,
we admit, but someone will have to win and one sure thing is it will either
be Romney or Obama, Republican or Democrat.
Luckily, most of us here at
The Real Asset Company don’t have to vote next Tuesday but we have been
thinking about who we would prefer. We could have thought about foreign
relations, national security or even which had the nicest smile, but
considering we’re in the business of gold investment we’ve been making our
judgements based on the gold price and how the next US
Presidency will affect it.
The statistics on Presidents
and gold prices since Richard Nixon make for some interesting reading; some
surprising and some not so surprising trends exist. Our main findings show
that voting Obama next week is best for the gold price.
Democrats and Obama worst for the US dollar
Obama is just the man for
the job if you’re hoping for a significant increase in the gold price. He has seen a bigger
percentage increase in the gold price than Bush did in his first term, but
there are bigger trends he’ll find hard to avoid.
The evidence showing
Democrats destroying the dollar more than Republicans, and second-term
Presidents benefitting gold prices even more during their second innings, is
over-whelming.
Even though Democrats prove
to be the best party for gold investors worried about the gold price, the
Republicans don’t do too badly themselves – accounting for a net
increase of 121.27% across their terms in office since Nixon, versus 358.68%
for the Democrats.
A recent YouGov poll found
90 per cent of Northern Europeans would vote for Obama, whilst I’d like
to think that’s because they invest in gold, apparently Romney is just
‘too Right Wing’. The European’s main gripe is that
‘Mitt Romney style’ doesn’t like too much reliance on the
State– something Northern Europeans could be described as eve more
guilty of at the moment.
Obama isn’t guaranteed
to drive up the gold price just because he’s a nice Democrat and spends
lots of money on taking responsibility away from people, our research also
found Presidents granted a second-term have a marvellous time showing
everyone just how much money they can spend, devaluing the currency further
and making that precious metal glister even more.
It seems that during their
first terms Presidents are more tempered than in their second.
Is this because they decide
to blow the doors off and show everyone what a great person they are, leaving
the next guy to pick up the mess? Either way the chart below makes for
interesting reading.
Give Obama another shot at ‘change’
George Bush Jr, has seen the
largest percentage increase in the gold price for Presidential second terms
– 88.81%, compared to 24.63% in his first term. Obama has already
contributed an additional 74.2% to the gold price; imagine the endless
possibilities if he’s allowed another shot at ‘change’.
Whoever wins, buy gold
We have sifted through a lot
of data, we have made a lot of calculations (a small part of me will always
be an economist) and Excel
has we have created many
graphs.
You can look at the minutiae
in the data as long as you wish, I’m sure we could even have some more
graphs made, but it doesn’t change that all governments in the sample
period are inherently inflationary, something which is clear in the gold
price since Clinton’s first term.
If the Republican gets in
then theoretically the gold price won’t increase by as much, it may
even drop slightly in the first year or so, but look at it as an excellent
buying opportunity. Who sits in the White House is not something which fits
in gold price fundamentals these days, gold is going up, just how quickly
depends on the President.
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