Americans disregarded a track record of failure and voted Barak Obama in for another four years. After pulling-back several hundred points just before the election, stocks continued their slide with another 400+ point DJIA decline after the votes were cast. Gold, as one would expect, turned-around and reclaimed its superiority over broad market equities, rising 3% in the week. Stock market strength, already in correction mode, continued on its downward path. Here’s the picture.
When irresponsible fiscal management and condoning monetary policy are endorsed through elections more of both can be expected to follow. It is for this reason that gold and stocks moved the way they did this week – gold is anticipating more monetary pressure to further weaken currencies and stocks are indicating continued economic weakness.
And who could blame them.