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This year our screens, radio and the media in general will be dominated by politics as electioneering goes into overdrive in a massive attempt to convince us that their man has all the answers. Alas, the political machinery has long since lost our respect, but that will not deter them and so we must endure this attack on our senses from all directions. The presidential elections in the United States is high profile at the moment but there are other very important elections also taking place, a few of which we touch on below:
Greece: Parliamentary elections in April 2012
D-Day for Greece was 20th March when a €14.5 billion bond repayment must be covered, without a bailout a default would have been unavoidable. Greece has agreed to a controversial package of austerity measures, in order to appease the eurocrats and the IMF in return for a 130bn-euro ($170bn: £110bn) bailout. For now Greece remains in the Eurozone, however, this is an agreement between an unelected government and the suits from Brussels. The riots that are taking place in Athens suggest that the people are most definitely opposed it. The election may produce a government that decides enough is enough and that Greece exits the Eurozone returning to some form of Drachma, in order to put an end to the social unrest that is building towards a violent outcome.
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Europe's political masters desperately want to keep Greece in the eurozone in a show of solidarity, otherwise Ireland, Portugal, Italy and Spain could follow Greece and exit this so called financial compact, rendering the future of Euro as a currency in some doubt. At the moment it looks as though a bailout coupled with a crippling austerity programme will have to suffice. More importantly this bailout will pave the way for future bailouts for the other indebted sovereign states such as those mentioned above. The idea that money can be borrowed from indebted states in order to redistribute it to other indebted states is not the solution. New money will be required and the printing presses will go into overdrive thus further debasing the Euro and driving the demand for gold higher.
Russia: Presidential election on 4th March 2012
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Vladimir Putin looks set to regain the presidency, so no real changes there.
France: Presidential election on 22nd April and 6th May 2012
The incumbent president, Nicolas Sarkozy, is trailing in the polls and has enlisted the support of Angela Merkel to give his campaign a boost. Should he lose, then France will elect either the socialists led by Francois Hollande or possibly the National Front led by Marine Le Pen. Should he win, Francois Hollande, has promised to spend 20 billion euros on hiring 60,000 extra staff for the police and schools and create 150,000 state-aided jobs. Where is the cash coming from to sustain such a programme, you guessed it, the rich people, big companies, etc. From what we can glean about the fragility of the french banking system this may not be as easy as it sounds. France could well look to the ECB for assistance and they will have to print more cash.
Mexico: Presidential election on 1st July 2012
Mexicans will go to the polls in order to choose not only a new president, but also new senators and federal deputies. The opinion polls, for what they are worth suggest that Mexico could have a new governing party. This could be interesting should Mexico ever reconsider the idea of using silver coins as legal currency, as muted by Carlos Slim some time ago.
Venezuela: Presidential election on 7th October 2012
On the 12th February, Venezuela’s opposition will participate in their own primary elections whereby they will elect the candidate who will face President Hugo Chávez in October. Until we know who the opposition will be and exactly what their policies are its difficult to conclude anything at the moment, but we will need to keep an eye on developments, especially regarding any proposals to do with the mining industry.
China: Party Congress Elections in October 2012
The activists for democracy in China may mount a challenge to the ruling Chinese authorities, however, we doubt that they can become a credible opposition in time for the October elections. Assuming the status quo continues then we already know that China no longer exports gold and is indeed an importer with imports expected to rise. There is also the increasing wealth of the people to consider and their long held trust in gold as a store of wealth. This coupled with encouragement from the authorities to invest in gold, suggests that gold prices will driven higher.
