by Chris Marcus
As the US presidential election draws closer, many continue to wonder how the outcome will affect financial markets. Among gold market observers, there has been speculation about how the metal might react if Mitt Romney wins. Many have hypothesised that the more conservative Romney might tackle unsustainable government spending, leading to an improved economy and thus a falling gold price. But a close examination of his views reveals that even if Romney is elected, it would be wise to hold on to your bullion.
While there are certain details that the two candidates disagree on, there is a strikingly large amount of common ground. Sadly, none of it seems to be good in regards to the dollar. Both candidates point out the need to reduce the deficit, but provide little detail on exactly how that will be achieved. In response to the coming fiscal cliff they both want to extend tax cuts (Obama for the middle class and Romney across the board). Reducing taxes is good for economic growth, but the effect is negated without a reduction in spending; absent these cuts, government debt will continue to grow.