The U.S. elections last night proved to be a whole lot ofsound and fury signifying very little.  From a tactical standpoint the GOP got its head handed to it on a fiat money platter.  Their strategy was to sacrifice the presidency by running an empty suit in Romney and use the voter outrage to win the Senate and be able to blame the coming crash on Obama.  Then they could swoop in for the 2016 elections as the country’s saviors.

Oops.

Watching the returns last night you could tell that Obama was going to win re-election by watching the price of Gold and the S&P 500 futures.  The former was up strong and the latter selling off.  That pattern continued into the New York sessions today while Gold saw some margin-related selling that took it down near $1700 per ounce only to have reality reassert itself and push it back up near $1720.  This sets up a very interesting Thursday and Friday.  As I said yesterday, a close for the week above last week’s high — $1732 would do nicely — will be a very bullish short-term signal.

It should be noted that today marked a complete break between equity and Gold prices, as the markets are now expecting monetary inflation, QEternity, along with reduced profitability for stocks because Obama will go after both corporate and individual investment profits.  QE can only levitate the markets, it cannot make them soar without the requisite earnings to go with it.  Since the Fed has been so reluctant to actually engage in any more QE, the effects of it will not be felt until at least the Q2 2013 reports.