Tags: Korelin | gold | president | inflation

Korelin to Moneynews: Obama Good for Gold, Romney Good for Stocks

By    |   Sunday, 21 Oct 2012 01:03 PM

Investors looking to play the presidential election can expect gold to rise should President Barack Obama be re-elected and more traditional asset classes like stocks to rise should GOP nominee Mitt Romney win, said Al Korelin, a market analyst and chairman of AB Korelin and Associates.

An Obama victory would likely allow the Federal Reserve to continue with loose monetary policies such as quantitative easing, under which the Fed buys bonds held by banks, pumping them full of liquidity in a way that drives down interest rates to encourage investing and hiring.

Such a policy, also known as printing money out of thin air, weakens the dollar and pushes up stock prices, though inflationary pressures rise as well, and gold tends to shine when inflation rates rise.

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“I think President Obama is much better for gold because I think that he brings a fair amount of, I would have to say, almost uncertainty,” Korelin told Newsmax TV in an exclusive interview.

“I wouldn’t call the current president, necessarily, a capitalist. I would say that he is very definitely a big government guy. I think he is a big regulations guy and I think that is good for gold personally,” Korelin added.

“If you want to look at the inflationary aspects of it if the president is re-elected, you are going to see a significant amount of dollar printing, for lack of better terms, and ultimately, that’s got to be good for gold.”

Romney, on the other hand, has said he opposes many Fed policies and would seek to foster growth and recovery by cutting and streamlining taxes.

“Now in terms of the conventional markets, I would say that Mitt Romney is probably a little bit better, because he is viewed, I would have to say, as a capitalist number one, and number two as a savvy capitalist,” he said.

“So in terms of the conventional markets I would have to say that Mitt Romney is the better of the two.”

Gold could keep rising as long as the Fed keeps its foot on the accelerator.

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

Gold is trading just shy of $1,745 an ounce, down from a record high of over $1,920 an ounce hit in late 2011.

“I think gold could break $2,000 any time. I think it’s conceivable that gold could break $2,000 within the next six months,” Korelin said.

Silver is due for gains as well.

Regardless of who wins November’s presidential election, it will take the Fed a while to mop up the liquidity from past rounds of quantitative easing. In addition, central banks around the world have rolled out similar measures, meaning all paper currencies have weakened.

“I think mid- to long-term it’s a great time to get into gold,” Korelin said, adding gains will take place over the longer term and within reason as well.

“I think you are going to see gold escalate in price. Am I one of these guys who is talking about $5,000 [an ounce] gold or higher? No, I am not even close. I don’t think that’s something that is really in the cards right now."

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

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Investors looking to play the presidential election can expect gold to rise should President Barack Obama be re-elected and more traditional asset classes like stocks to rise should GOP nominee Mitt Romney win, said Al Korelin, a market analyst and chairman of AB Korelin and Associates.
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2012-03-21
Sunday, 21 Oct 2012 01:03 PM
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