From Birch Gold Group
At the time of this writing, the United States has not officially declared a winner in the presidential election.
Naturally, this has Americans on edge. As the Wall Street Journal described it, “As Tuesday’s election-night vote tabulations rolled into Wednesday without a clear winner in the U.S. presidential race, a sense of uncertainty—and fear—crept into the minds of voters on either side of the political divide.”
That uncertainty seems to be pervading the markets, too. Oddly, even though the election itself hasn’t been decided, stocks have been up.
That has many pundits scratching their heads. Wolf Richter can’t fathom the rationale for the “audacious rally that has the Dow Jones Industrial Average on track for its best post-election return in 120 years.”
As of the publication of this article, the rally had continued in spite of election turmoil — including a recount being called for in Wisconsin and a lawsuit pending for “ballot access” in Michigan, among other things.
“These narratives are funny. They change and adapt constantly, like a weather vane,” wrote Richter on Wednesday.
And there is a lot more going on that has the potential to put this unusual “morning after” rally in the rearview mirror.
Anxiety Levels Could Reach a Fever Pitch in the Coming Months
Aside from the fact that a president-elect could be declared at any time, or even potentially weeks from now, quite a few other immediate economic concerns exist.
An article on AZCentral summarized some of the current uneasiness:
We’re not just frustrated by the ongoing rancor and uncertainty over the election. The country continues to see spikes in COVID-19 cases, troubling unemployment levels and the painful site of struggling small restaurants and other businesses in our communities. A much-needed second economic stimulus package could be stalled for months…
If unemployed consumers don’t get spendable cash in their pockets, they are likely to cut way back on excess spending.
If small businesses struggle, that can cause ripple effects not just at the local level, but also nationally.
And that stock market rally might not look as good as it appears to, either.
The infamous Warren Buffett “yardstick,” which measures total market cap compared to GNP, currently sits north of 200% – its highest point in history.
Jesse Felder warns of “an extremely overvalued stock market, driven by a speculative euphoria even while the price trend is running out of steam.”
So, if you were hoping that the election would bring the last of any surprises in 2020, you may be out of luck. Keep holding onto your seat.
Gold and Silver Could Provide Needed Stability
Barring some definitive action, the election madness could last days, weeks, even the next couple of months. We’ll have to see how that plays out.
Now is the time to prepare, if you haven’t already, because who knows what will happen next?
There may come a time when you’ll be relieved that you held assets such as physical gold and silver, which can help provide a hedge against uncertain economic conditions.