What a Republican Win Would Mean for Investors

The Republicans seem headed for victory in next month's elections. Pollsters say they are likely to take control of the House of Representatives, after a four-year gap, and they might even win control of the Senate.

It's still early. What we don't know about the future is probably more important than what we do know. But one thing seems clear: A Republican victory makes it even more likely that the 2001 and 2003 Bush tax cuts will get extended, perhaps indefinitely. While President Barack Obama and the Democrats want to extend the cuts for households making less than $250,000 a year, the Republicans want to extend them for everyone.

And, all other things being equal, that's probably negative news for bonds and the dollar, but better news for stocks and gold.

GOP leaders in the House of Representatives—led by Minority Leader John Boehner—have already said they want to extend the cuts for at least two years. Senate Republicans unveiled a plan to make them permanent. Most Republicans would probably like to go along. Why wouldn't they? Party orthodoxy opposes any tax hike, on economic and political grounds. The fate of George Bush the first beckons for any Republican politician who breaks with the orthodoxy.

Yet the federal budget is already mired in red ink. The Congressional Budget Office forecasts that over the next 10 years, we will add $6.2 trillion to the national debt. But that's if the Bush tax cuts expire. Making those cuts permanent would cost another $4.8 trillion, taking the total to $11 trillion.

If Nick Guarino of Wall Street Insiders is right, the very last thing to put your money into is commodities like gold, silver, and the like. Commodities are merely a HEDGE against INnflation - they aren’t “investments”. He insists that we are in a DEflationary period and the government is desperately trying to inflate money to make it worth less and inflate their way out of the debt they owe, but that it won’t work, because it never has worked.. The definition of INflation is: “Too many dollars chasing too few goods”. To print money is to inflate it and devalue it.

He charges his subscribers $5,000 a year for his stock market advice which is always against the prevailing conventional wisdom,

For another perspective, you may want to read what he says here:

Wednesday, October 06, 2010 7:13 PM
Six months to biggest stock market crash ever
http://www.wsifn.com/instantfree/flashemail_100610.htm

Here are a couple of articles that reinforce his position:

Fed Deflation Concerns Trump Inflation Worries
The Market Oracle ^ | 10-`2-2010 | Bob Browne
http://www.freerepublic.com/focus/f-news/2606648/posts

The Fed’s commodity bubble
October 15, 2010 11:33 am http://finance.fortune.cnn.com/2010/10/15/the-fed%E2%80%99s-commodity-bubble/

See even more here: http://www.freerepublic.com/focus/f-news/2606648/posts

I know Nick Guarino.

I was his subscriber between 1993-1996 when his newsletter was called, WALL STREET UNDERGROUND ( apparently, he now calls in Wall Street Insider).

Back then he was calling for a stock market meltdown.

Well, I missed the 3 year boom until I quit subscribing and went full into tech in early 1997. I rode the hell out of the DOT COM BOOM until mid 2000 when his prediction came true ( a full 7 year after he said it would happen ).

Luckily, I pulled my money out the day the market crashed and lost only about 10% ( it continued to crash the next few days -— it was the DOT COM BUBBLE ). The NASDAQ has not recovered back to its DOT COM BOOM level for 10 years.

I still made over 50% on my investment between ‘97 to 2000.

This guy Guarinio is a like a stopped clock. He’ll be right twice a day, but he’s the eternal doom and gloom sort of fellow.

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