As I write this, the presidential results are in limbo.  With all of the stories coming out about ballot funny business, this could go on for a while.  Will it be Biden or Trump?

It is looking more likely that it will be Biden.  Either way though, there are some things that will go on, including the divisiveness.  What will also go on are the deep state and the administrative state.  This includes the Federal Reserve.

The Fed concluded its latest meeting with the latest statement on monetary policy and a press conference from Jerome Powell.  There is basically no change in the Fed’s policy except for a few changing words that don’t mean much.

The Fed is going to keep its target federal funds rate near zero for a long time to come.  If price inflation remains relatively tame, it could be for many years.  Meanwhile, the Fed’s balance sheet remains near its all-time high, which is nearly $3 trillion higher than it was at the beginning of the year.

The price of gold went up big today, while the 10-year yield has fallen back from its rise last week. The U.S. dollar has been down.

There are some things that will not change regardless of who is president on January 21, 2021. The federal government will continue to spend recklessly with trillion-dollar deficits.  The Fed will continue to help fund these deficits and do the bidding of the big bankers and the politicians.

The stock market has been up big during this election turmoil.  This is a bit curious given that stock investors tend to not like certainty.  However, there was a big sell-off the week before.

On Tuesday night, when things were looking half decent for Trump early on, stock futures were up. Trump’s performance was unexpected for anyone who actually believed the polls.  As things started to shift towards Biden on Wednesday, stocks continued to roar.  It has made little difference to the stock market.  Historically, it doesn’t seem to matter which party is in the White House.

Perhaps stock investors were happy that it was not a “blue wave” for the Democrats.  It was apparent early on that the Republicans have a good chance of retaining a slim majority in the Senate, while the Democrats lost some seats in the House but will still retain a majority.  So no matter who gets the presidency, there will be some gridlock.  There won’t be much gridlock in terms of federal spending, but there won’t be any wild tax hikes or nationalized healthcare.

As I’ve said in the lead-up to the election, I think there is major economic turmoil ahead.  I’m not sure if it will be a deep recession/ depression or if it will proliferate with significantly higher price inflation.  We could also get something resembling the 1970s with stagflation.  The good news, if Trump doesn’t get the presidency, is that Biden/ Harris will have to deal with these problems.  Blaming Trump will only work for a year or so.

I continue to be bullish on gold in the long run.  I am going to watch the inflation numbers closely.  I am a little less certain with gold mining stocks, as they do present significant risk if we go into deep recession.  However, I do think that gold stocks offer major potential if you are willing to accept the risk.

My next few posts will likely be political in nature.  If there are any major economic developments though, I will be sure to comment.