Vote Obama to Help the Gold Price!

By: Jan_Skoyles

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.

Buy gold whatever the outcome in the US elections. Buy gold online in minutes…

Jan Skoyles contributes to the The Real Asset Co research desk. Jan has recently graduated with a First in International Business and Economics. In her final year she developed a keen interest in Austrian economics, Libertarianism and particularly precious metals.  

The Real Asset Co. is a secure and efficient way to invest precious metals. Clients typically use our platform to build a long position and are using gold and silver bullion as a savings mechanism in the face on currency debasement and devaluations. The Real Asset Co. holds a distinctly Austrian world view and was launched to help savers and investors secure and protect their wealth and purchasing power.

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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.

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