Hi Everyone

I have been wondering for a while if besides the obvious reasons, some of the market volatility might be due to our upcoming election. Is the market reacting to the possibility of a one party government with a filibuster proof senate? Is the market scarred about what a potentially very liberal, left leaning government will do to our economic recovery with new social programs and an unwillingness to lower taxes on corporations, capital gain as well as individuals?

I don’t have the answer, but I do think this is a distinct possibility. We might know in the days following November 4th if the market rallies on some unanticipated election results.

Looking at history, having a filibuster proof senate run by the Democrats created large social programs like in the 30s and 60s, and a lackluster economy during the late 70s. The markets certainly don’t like that, as it will be poisonous to our worldwide competitiveness.

If this comes true, I guess we have to bullet proof our portfolios even more and expect inflation to get even worse in the years to come than it will anyway with all the money being created right now.

Cheers,

Patrick