What a Romney Presidency Would Mean for the Economy and Markets

Phoenix Capital Research's picture


Yesterday we assessed the impact a second Obama term would have on the US economy and markets. Now let’s assess what impact a Romney Presidency would have on the US economy and financial markets.


For starters, Romney has already stated that he would fire Fed Chairman Ben Bernanke if he wins office. While this doesn’t represent the real shakeup that the Fed needs, it’s definitely a step in the right direction.


With that in mind, if Romney wins and makes good on this promise to fire Bernanke, then we need to consider that any market rally that occurs based on the perception that the US economy would strengthen would be short-lived.


The reason for this is that the primary driver of stock prices over the last four years has been the hope and promise of Fed intervention. So if Bernanke were to be fired (or more likely step down as Fed Chairman) the market would lose one of its biggest props.


What would follow would be a potentially hellacious correction as the markets adjusted to the underlying realities of the US economy. Based on the business cycle, this would put the S&P 500 down near 1,000 or so (and that’s ignoring any other negative items developing).


This was the very problem with the Fed intervening so heavily to begin with: by attempting to prop the markets up, the Fed didn’t let the bad debts clear out of the system. As a result, the big reset has been pushed down the road.


If Romney wins the Presidency, it’s quite possible he would let that reset finally hit. After all, he could easily fire the economists at the BLS who have massaged the data, fire Ben Bernanke, and then blame the subsequent market correction and bad, but realistic economic data on Obama (much as Obama has blamed the bad economy he inherited on Bush).


Another issue to consider is that if Romney wins and does fire Bernanke and cuts back on spending, then the “inflation trade” could take a hit.


Bear in mind, Gold and Silver would continue to see increased demand based on investors fleeing the Euro and from Central Banks buying. However, a Romney win, accompanied by cuts in Government spending, would result in a powerful US Dollar rally, especially when you consider the state of affairs in other major world currencies (the Euro, Yen, and Yuan will all likely collapse before the US Dollar).


I have noted, as I am sure you have, that both Mitt Romney and Paul Ryan have mentioned that if the US does not get its deficit and debt in check, it will end up like “Greece.” The Obama camp has made no such statements and in fact never refers to the European disaster.


I also want to draw your attention to the fact that several EU leaders have stated that the Obama administration has asked for them to keep things calm until after the election.


            Troika report on Greece may come after U.S. vote


"The Obama administration doesn't want anything on a macroeconomic scale that is going to rock the global economy before November 6," a senior EU official told Reuters, adding that previous troika reports had also slipped.


The European Commission's representative on the troika, Matthias Mors, denied that the report could be delayed, and an official at Greece's finance ministry said he had been assured that there would be no slippage.


A U.S. official said the United States had made clear to European officials that it wanted to avoid any "downside" economic surprises because of the fragile U.S. recovery, but denied that it had anything to do with the U.S. election.


Several sources in Germany described those conversations with their U.S. counterparts and said the message had been that the Americans didn't want surprises before the election.




This, combined with reports that EU leaders do not like Romney indicates that they perceive Romney as a threat. Given that the EU is only being held together by Central Bank intervention, this threat can only be based on the idea that Romney will not move to help Europe with its financial difficulties (and will be anti-Fed intervention)


On that note, if you’ve yet to prepare for Europe’s BIG collapse…we’ve recently published a report showing investors how to prepare for this. It’s called What Europe’s Collapse Means For You and it explains exactly how the coming Crisis will unfold as well as which investment (both direct and backdoor) you can make to profit from it.


This report is 100% FREE. You can pick up a copy today at:



Best Regards,


Graham Summers


PS. We also offer a FREE Special Report detailing the threat of inflation as well as two investments that will explode higher as it seeps throughout the financial system. You can pick up a copy of this report at:




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lakecity55's picture

Mittens has Faith. Now, if you will unjade yourselves for a minute, just a minute, maybe we will have a chance to get rid of whoever the half-white guy is, and have a chance using strategery to get some more Libertarians inside.

Look how far RP went, guys. He changed 50% of the entire polictical discussion!

You have to think strategy. It takes longer, you have to be + instead of - and you have to get the national conversation going. I talk to people from all walks of life and get them thinking when I can about Libertarian stuff. Most of them find out they are actually in agreement with it, instead of the dogma from the Republocrats.

Mittens is not some magic panacea, but he will give us time.

Soldier on, and Keep Stackin

monad's picture

Time? "Corporations are people."

monad's picture

Already SCYTLed. Shut it down.

monad's picture

Mitt Romney's cabinet & replacement for Bernanke: Matt Romney, Tagg Romney, Craig Romney, Ben Romney, Josh Romney and Sir Allen Stanford.


Translator's picture

What HASN'T Obama lied about, and why would anybody vote for a serial liar?

Matt's picture

Obama has kept (as much as a non-dictator in a system with checks and balances can) 80% of his promises from the last campaign:


Translator's picture

I'm voting for Ron Paul, because I am stupid enough to believe the ridiculous lie that 'both candidates are exactly the same', and that a wasted vote for Ron Paul is not a vote for Obama's Lies, socialism, racism and incompetrence.





Now who exactly is the gimp?



One eyed man's picture

Don't think Romney is going to win. Reason: I have yet to see even one Romney bumper sticker. In previous elections I saw lots of Bush stickers and a few McCain stickers. On the other hand, I am not seeing very many 2012 Obama stickers either.

monad's picture

Try & remember that zero members of the Senate and Congress voted for the Obama budget. Can't blame the republicans for that most damning verdict.

lakecity55's picture

Tomorrow is Chick Fillet Day.

Barry, the brown stain in America's underwear, will be stomped like Hunter Thompson by Hells Angels.

Oldwood's picture

People got tired of having their cars vandalized. For most conservatives their political persuation is a perspective. For liberals it is what defines them. They need to shout it out, in your face. Conservatives are a bit more...conservative.

One eyed man's picture

I ask myself: "After four years with trillions of dollars of debt added and no discernable recovery, could the American people really be idiotic enough to elect Obama for four more years?".

And a little voice in the back of my head says: "Yes, they could!"

Not that I really think that Romney has some magic potion to restart the economy. But if what you are doing isn't working, you should at least try something else.

uncle_vito's picture

Is gainsandpaincaptital SPAMMING us.  Tell them to get lost or ditch the ads.

Herkimer Jerkimer's picture

I also want to draw your attention to the fact that several EU leaders have stated that the Obama administration has asked for them to keep things calm until after the election.


            Troika report on Greece may come after U.S. vote


"The Obama administration doesn't want anything on a macroeconomic scale that is going to rock the global economy before November 6," a senior EU official told Reuters, adding that previous troika reports had also slipped.



That’s why there's been an absolute derth of articles on ZeroHedge lately! It usually takes me hours to read it all and lately, there's been nothing!




lakecity55's picture

Look, even tho I don't speak Austrian, I need you euro guys to keep a lid on things. I promise I will make the USA a shitty place like Greece!

OK, just bring them down. We want to be #1. We will keep up the baloney.

Oldwood's picture

If a republican can't win this race, I doubt we will see another conservative president while under this form of government, if ever. Republicans have compromised every conservative value for the expediency of electorial victory. We have reached the tipping point. There is no surprise that Ron Paul failed in his attempt. Regardless of the crap the the RNC pulled, he just couldn't muster the public support he needed to win. He preached the truth and the truth doesn't sell anymore. Everyone is much more interested in freebies or at the very least the avoidance of pain or discomfort. And there are plenty of politicians out there pandering.  Truth has failed. Everybody here seems to feel that there is no difference between the candidates and if that is true, what chance would someone truely different have? I used to believe that it was a problem of lack of choice, but now I think it is a lack of choices we like. I'm selfish. I want Romney because I think if he is elected we might actually see a boost in spending and investment from many of the small business people out there who do the bulk of the hiring and spending. I know it likely won't solve any of the big problems but it might actually help and it might save my business. As I am not in green, government or investment markets, Obama has nothing to offer me and I don't think spending borrowed or fake money will do it anyway. Small business people have cash, and if they think by spending it, it might actually come back to them in the form of business, I think they would do so. If the governmnet would just stop spending and especially wasting money, and those people who actually have cash to spend would actually invest it in business and other productive enterprises, rather than taking it to the casino, we might just have a chance. I'm not normally optimistic but with no hope we have nothing but selfpity.

walküre's picture

They said in 2008 that Obama voters were drones. The guy turned out nothing like the Republican smear campaigns prior to the elections would have you believe. The Republican smear from "conservative" talk radio to "conservative" media painted a picture of Obama as the devil personified. That didn't happen.

Who is the Republican party and why should the ordinary American either side with them or vote for their candidate? On a grass roots level their strategy might be attractive to Americans who subscribe to a more conservative world view. However, is being conservative an excuse to invade Iraq under false pretenses? Is conservative the reason that the banks became unhinged and nearly drove the nation into a financial Armageddon? Is it a conservative benchmark to ridicule and condemn all forms of alternative energy or concepts of sustainability?

If you looked at the track record of those who claim they represented a conservative world view, it doesn't exactly correspond with anything they have achieved in terms of "conserving" OTHER THAN conserving the STATUS QUO which has benefited a small elite minority and always to the detriment of the vast majority.

Why would the majority of Americans who got screwed by "conservatives" like Romney and his gang of Wall Street bandits want to vote for this party and their candidate who undoubtedly is going to screw them even more once elected? It makes no sense to submit yourself to the King billionaire unless you are sitting at his table. How many Americans are sitting at the table vs. those sitting on the floor picking the scraps or not being anywhere near the palace, let alone inside the court.

Ordinary Americans who think they can vote themselves a better future by putting the King billionaire in power must be either completely delusional or totally misguided.

When you're not part of their group, you don't vote for them to have control and power over you. Plain and simple.

Obama may not be your favorite guy, but at least he's not going to rape you blind. That's what Wall Street does, every day of the week and twice on Sunday (church).

Romney "drones" give your head a shake, will ya?


Augustus's picture

"They said in 2008 that Obama voters were drones. The guy turned out nothing like the Republican smear campaigns prior to the elections would have you believe. "


Actually, he turned out to be much worse and much more inept than anyone could have imagined.

We have not heard him mention "shovel ready" for months, certainly not in any campaign speeches.  It was $800,000,000,000 of pure plunder.  And his pride in GM?  Most likely to take bankruptcy again under the next president, whoever is elected.

walküre's picture

No, no... the smear campaigns painted the picture of a socialist or communist President who would redistribute wealth from the top to the bottom. Really? The top is richer than ever, they didn't do too shabby under Obama's reign.

Where did the $800,000,000,000 get spent or how did that money get allocated?

monad's picture

Williard isn't going to make a damn difference. Technofeudalism is already in place, they are both pathological traitors. WAKE UP! 

dcj98gst's picture

The easy fixes--throwing around trillions in "free money"--have all been tried. Now the only choices left are the hard ones everyone has avoided for 20 years because they're politically impossible.


FACT IS >>>>> WE ARE GOING OFF A CLIFF WITH EITHER OBAMA OR ROMNEY.  It is too late to change course.  We are looking at a currency collapse in the next few years.  As soon as we loose our reserve currency status, our rates will spike and we will be TOAST.


First off.  Romney is not going to stop the train from going off the cliff.  His proposed spending cuts are way to mild and will probably compromise.

Given that a majority of the US public is very uneducated from an economic standpoint, they are very likely going to blame this collapse on the politics on who is currently in office.  I think we can agree that neither Obama nor Romney are going enact measures that will prevent this collapse.

Therefore, we need to ask our selves the following:  Do we want an economic collapse under an “Overt Socialist” i.e. Obama?  Or do we want the collapse during the administration of a RINO that supposedly (at least in the minds of the ignorant US public) stands for Free Market Capitalism?

I am scared of a back lash against Free Market Capitalism if the Economic Collapse happens during Romney’s administration.  This could very well lead to the government enacting much harsher economic controls and lead to a totalitarianism state. 

But if the Economic Collapse happens during the Obama administration, then the US public will more likely see the actual writing on the wall and finally return to Free Markets.




gonetogalt's picture

DCJ...that's what I thought too, but (pardon the regurgitation from a $39 a year advisory), if brazillians of barrels of shale oil and beau coup natural gas drive a manufacturing resurgence and create a strong trade surplus the guy in the WH could come out looking like a rocket scientist through no fault of his own.   Obama...4 more yrs...make that 8...You won't even recognize your own country.  I'm staying gone.

lakecity55's picture

Hmmmm, Soros bought up shares in Brazil Oil. O'Mooselam shipped all our oil rigs to Brazil and killed American drilling.

Tomorrow, YT strikes back against African Communism.

Augustus's picture


I pretty much agree with your assessment.  The cliff dive has become all but inevitable, just a matter of when  Obama will simply get us there faster.

I can only see one ray of hope from a Romney win.  If he is able to reform the entitlements and accelerate the growth in the oil and gas industry, allowing jobs and taxes from exports and increased production, it might be a real game changer.  That scenario will never play out under Obama and the current and proposed EPA regulations.

1100-TACTICAL-12's picture

Here is the deal Barry is going to come after our guns. He has said as much the man has got to go, a dry cow turd would be better than what we have now.

Citxmech's picture

Without a veto-proof majority, he won't be able to do shit on the 2nd ammendmenet front.  So, unless the Repubs in the House/Senate are going to fold, nothing's going to happen (absent a major SupCt shakeup).

monad's picture

There are alot of alternatives, and they all require guts and action. Its just a question of how much and whose guts.

walküre's picture

You're thinking too much as an idealist. Guts, glory and action has got nothing to do with it.

Unless the alternative to the current model does not benefit the 1%, they will keep going AS IS.

Once the 1% is positioned to BENEFIT from your "ideal" alternative, YOU AND I will get screwed AGAIN.

WE CANNOT WIN AGAINST THE 1%. It is their game, their market, their manipulation, their fraud.

Are the banks (which represent the 1%) healthier today than they were in 2008? Is the 1% now positioned to rake all of us ordinary Americans over the coal yet again?

monad's picture

Yea I guess you're right. We should just mope around looking pathetic, maybe they'll feel sorry for us and give some of it back. Its better to just watch tv, bitch, hope somebody else does something, and surrender without upsetting anyone. Your way is just better, wankery. Wait til they soften and 'we' might, just might get a sympathy fuck before 'we' die. At least Clinton can tell 'us' what its like, to engage in unlawful carnal knowledge... with that attitude you've got to be a virgin.

walküre's picture

I misread your post. When it happens, I'm with ya right there in the trenches. It's a powder keg out there. I read everywhere that Americans are buying more guns & ammo with Obama's 2nd term.

What I don't understand is how they can underestimate the forces should Romney win tomorrow. That's when you want to be armed to the teeth.

Lord Peter Pipsqueak's picture

If Romney wins he may fire Bernanke but what does it really mean?You replace one money printer with another. The Fed and the banks are still in control, whoever is the chairman of the Fed doesn't make any difference. He is only the figurehead,the face representing all the people behind the scenes you never see or hear about who really control things.The corrupt symbiotic relationship between the government and the Fed whereby the government postphones the difficult decisions regarding fiscal policy and as a result the Fed picks up the slack by maintaining artificially low interest rates to help the govt. finance its deficits,and by printing money and market intervention to prevent a fall in aset prices thereby protecting banks from the losses from the folly of their speculation will continue.The govt will not balance the budget as long as the Fed manipulates interest rates and markets to enable it to do so. The govt will not crack down on banking corruption and fraud as long as the Fed subsidises its unsustainable spending.

Does anyone really think Romney will come in and hit the reset button and prices of assets return to their real i.e non Fed inflated levels?No chance, tinkering around the edges and a long slow nasty war of attrition on Capitol Hill over the future of Benefits, Defence,Medicare, taxes and pensions is the likely outcome.

cpzimmon's picture

Words from the same people who said we wouldn't get QE 3. I'd rather trust a duck...Quak.

Zero Govt's picture

Crumbs, I couldn't find any 'choice' Graham. 

There is no difference between these bwankers puppets, it was a pretty futile task for some articles from the start.

A Study of Democratic Choice R.I.P.

crusty curmudgeon's picture

More people understand football than politics. 

Hypothetically, a school gets to vote on who will be the starting quarterback.  The current or incumbent QB (let's call him Obummer) loves to run and can't pass to save his life.  This is all fine because the coach (Tom P.T. Barnum) loves running QBs and doesn't like to risk passing.  The offensive line is huge and very quick--the team runs over every opponent, racking up an impressive average of more than 500 yards rushing every game.  The QB doesn't need any skills--the line opens up a huge hole for him every time. 

A candidate for QB (let's call him Rumney) appeals to the voters who love to see pass plays.  He says he will pass more and he enjoys passing.  He stands up for those who like to watch passing on Friday evenings. 

If Rumney gets elected, what will change?  Hint:  The coach (TPTB) calls the plays.

Hope this helps...

steve from virginia's picture


 I don't support Obama and did not vote for him and will not.


 - Romney is more likely to add more wars (and add more war costs).


 - Romney talks about kicking out Bernanke but he can't. Romney isn't smart enough, he doesn't know how. Bernanke a) is not a Federal employee, and b) has made himself indispensible to Wall Street, Romney's boss.


 - Romney cannot reduce the deficit, either: the public sector deficit is the private sector's debt service! The government can run perpetual deficits, something no private sector entity is allowed to do. 


- It's 'damfyado, damfyadon't': if the deficit is cut the private sector collapses, if it isn't, the private sector collapses anyway! Any new debt simply monetizes maturing debt: there is no more productive return to adding debt.


I expect Obama to win handily: the 'too close to call/dead heat' meme is a creation of the media (to suck funds out of super-pacs). Obama is incumbent, he has massive advantages including favorable demographics.


Another problem for Romney: he makes Obama look like a man of wisdom and integrity.



Oldwood's picture

How many people do you know that voted Obama in 08 that will repeat as compared to those past Obama voters who will go for romney or none of the above. I see a lot of dissenchanted obama voters. How many do you know that will vote Obama this time that didn't vote for him in 08?  I haven't heard but a few, and they just want to burn it all down. Just don't see how Obama can win on this, but what do I know?

walküre's picture

Don't forget, how many that either didn't vote in '08 because the Republican ticket was garbage or didn't vote Obama are now voting Obama because he's the ticket to get free health care for all.

That's a BIG ticket and it benefits THE MAJORITY. The majority doesn't care how it's paid or what it's going to cost. Why should they?

Did you see the lines in Ohio yesterday? That early voter turnout is standing in line to make sure they get health care.

nofluer's picture

are now voting Obama because he's the ticket to get free health care

They'll vote for him because the Sheeple do not understand the TANSTAAFL Principle. They'll vote themselves into free Soviet style health care.

How do they expect to get free health care when there are so few doctors that the majority of sick people will never see a doctor this side of heaven/hell. And that if they are admitted to a "hospital" they are most likely to be admitted to a hospital that practices the US equivalent to the British Liverpool Care Pathway with a vengeance - for profit... and the health care "facilities" will be so cash starved they won't even be able to pay for bandaids.

Many have called the Great Unwashed Masses the "sheeple" for a long time. Now we get to see just how close to sheep they really are - and God help us if the Elite's sheep dogs round us up with the rest.


Zero Govt's picture

I don't think Lucifer could give Bumma a look of integrity

a marxist weasel who can just about deliver an auto-cue speech of "promises, promises, promises" without stuttering and fluffing his lines.

Wall Street are clearly getting pretty desperate in the Puppet Dept

vix is for kids's picture

Mitt Romney and Paul Ryan have mentioned that if the US does not get its deficit and debt in check, it will end up like “Greece.”

Candidate Obama in 2008 also sounded like a deficit hawk.  Of course the challengers will always run against huge deficits.  But even the tea party winners succumbed to party today, diet tomorrow way of life once in office.

I'm writing myself in for President.  I won't win, but al least I know I'm not wasting my vote on unworthy candidates.

fuu's picture

Thank god this will be over very shortly.

Metalredneck's picture

In real news:  Halo 4 comes out tomorrow!!!

Canadian Dirtlump's picture

If TPTB want QEternity, QE sandy or Fiat Bazooka, which from a wall street perspective they do, I don't know how anyone could rationalize Willard Romney walking on the scene and shaking things up - that being the case I pray to every mormon god (all quintillion of them) that he wins  because I want to see the entire MSNBC building get flooded with tears..


Call me Cynical, but to paint differeing market conditions between the kolob kid and the bastard son of a marxist pervert and a low end leftist radcial is ridiculous. People mock those who think professional wrestling is real. THIS is professional wrestling.


Overal, either one of these guys will do what he is told, or he will be dealt with. Either way, you lose - and if you don't lose, it is by coincidence, because they win period.

Diamond Jim's picture

we will find that if PrezOwe wins we will continue to kick the can down the road, and will spend more to continue to prop things up. We will have a longer way to drop. Granted a romney win will not be much bettter. It is time to take the bad medicine and just rewards for the years of a false economy and stock market rebound. Hopefully good policy will prevail and as we finally unwind all the bad derviatives etc we will be healthier and on the correct path. We should have ate it 5 years ago. Long live Austrian economics..........

OhBaldOne's picture

"If Romney wins the Presidency, it’s quite possible he would let that reset finally hit. After all, he could easily fire the economists at the BLS who have massaged the data, fire Ben Bernanke, and then blame the subsequent market correction and bad, but realistic economic data on Obama (much as Obama has blamed the bad economy he inherited on Bush)"

Romney won't dare to let the economy reset - his oligarchic handlers would and will not let him collapse the system. He will continue to let QE go to whatever level it will and keep the "blame game" going as long as possible. He and Obama have no tools left in the chest to do otherwise.

The elite corporatists in charge won't let their money trough be upended - it will be extend and pretend for as long as it takes to rape and pillage the system.

So it doesn't matter who wins, since they are a virtual tie when it comes to policy and the choices they have to make to keep the ponzi alive and kicking.

Matt's picture

The difference is, whether you want ~$100 Billion per year for Green Energy subsidies, or for new boats for the Navy.

carambar's picture

definitly for New energy.


dscott8186's picture

What would follow would be a potentially hellacious correction as the markets adjusted to the underlying realities of the US economy. Based on the business cycle, this would put the S&P 500 down near 1,000 or so (and that’s ignoring any other negative items developing).

An excellent opportunity to short the market and clean up nicely.  As your 401k's and IRAs...  a huge buying opportunity once the market takes a significant dump and I advise upping your monthly percentage to maximum or as high as you can tolerate in the 25 to 30% range.  Any paper loses you think you got from the initial correction will disappear just like the 1987 crash...Those who bought in 1987 were well rewarded.  If the S&P drops to 1000 from the current 1400 level, with patience you will reap a 40% return within two years.  Buy and Hold.

STAY WITH the INDEXES and sector funds, don't go with individual stocks because some companies are not going to survive the downdraft.  GM may not survive this ride.

are we there yet's picture

I have lost count over the last 3 years the number of times advice has been given to short the market and make a profit when the soon to come crash arrives.  Its rigged.  Stock fundamentals have less to do with a stock price than profiling the composite of the markets invisible puppet masters thoughts.

Smiddywesson's picture

So, you are saying you'd jump in and buy with both hands if the market dropped from 1400 to 1000?  I'd rethink that now while you have the time to sleep on it.  What's to keep it from falling to the 3/9/2009 low of 666?  What's to keep it from breaking that low?  Will the Fed step in and save the market at 666 this time?

I'd be careful of calling a bottom on this one, there's no precedent for it.  Like a patient that can't stand up after coming out of a coma, this market is likely to be much worse because of the extended efforts to prop it up.  If we used the Great Depression and a nice round figure of 80%, we'd be setting the bottom target somewhere in the neighborhood of 280. 

Read John Kenneth Galbraith's account of how tricky the rallies were during the Great Depression.  The gamblers, the bottom pickers, and even the scardy cats were wiped out.  The only prediction I will make is there is no way, no how, that this market is going to give anyone easy money.  If you want to short, you are going to have to deal with the rallies or the psychological stress. 

I disagree that we need to stay in stocks, but I agree wholeheartedly that there is opportunity here, it's just not going to be an easy ride and the roller coaster may plunge a lot deeper than you seem to believe possible.  Good luck!