Free The Aftershock Investor: A Crash Course in Staying Afloat in a Sinking Economy by David Wiedemer, Robert A. Wiedemer, Cindy S. Spitzer Page A

you with the correct macroeconomic point of view so you can come to your own logical conclusions about the direction of the economy and what you can do to protect yourself.

If the Republicans Win the White House
    If Governor Romney becomes president, he will likely try to reduce the deficit by cutting spending. However, as he would soon discover, that is a lot easier said than done. What spending could Romney realistically cut? Will he try to cut Social Security? Not likely. What about cutting Medicare? No one is going to like that too much. How about trimming defense spending? That’s definitely out. Romney will soon find that significantly cutting almost any government program will be politically very hard to do, hard even for a Republican Congress to go along with, if the Congress also happens to become mostly Republican.
    Perhaps, if Congress is mostly Republican, they will try to cut some of the more Democrat-favored programs, such as welfare. But to get any real mileage out of just a few cuts, the spending reductions would have to be very deep, and the Democrats would surely fight that, using the same filibuster rules that allowed the Republicans to block so many Democratic initiatives in the past four years. Of course, if Congress remains mostly Democratic, deep spending cuts will be even easier to block.
    Meanwhile, it is very unlikely that any Republican president will try to increase revenues to the government with any new taxes. Instead, the money printing and the borrowing will continue. Money printing will continue because without it, the stock market and overall economy will decline. Nobody wants that, least of all investors and the business community, who may have supported Romney.
    So, with continued money printing, continued borrowing, few spending cuts, and no new taxes, the longer-term outcome of having a Republican president, even with a Republican Congress, won’t be much different than the outcome of not having a Republican win.
    However, in the shorter term, many investors will likely feel more optimistic having a Republican in the White House, and we could easily see the stock market doing well right after the election and continuing to do well for perhaps several months, assuming there is no bad news coming in from Europe, Iran, China, or other negatives that could end the Romney stock market honeymoon early.

If the Democrats Win the White House
    If President Obama retains the White House, we can expect to see no big changes from today. The Federal Reserve will continue to print money, the government will continue to roll over the debt with more borrowed money, there will be no big spending cuts, and probably not much in the way of new taxes because, the Republicans will continue to block such attempts, as they have done before.
    If Obama keeps the presidency but the Republicans become the majority in Congress, we can expect to see even less change, and nothing much new will get done that either side would like. The budget deficit will remain about the same, and our total debt will continue to grow.
    If the Democrats keep the White House, investors will likely be less optimistic immediately after the election than they would be if Romney gets in. The stock market could become more volatile in the following months, and that could lead to an earlier next round of money printing by the Fed than we might have seen under Romney, but either way, the Fed will print more—it’s only a question of how soon.
    As we said, the 2012 election will make little difference for the falling multibubble economy in the longer term . No matter what happens this November, falling bubbles cannot be propped up forever. Various delaying tactics will be tried, and some—like massive money printing—will temporarily, marginally succeed in the short term. But none will be able to ultimately stop the coming multibubble pop and the Aftershock that will follow.

CHAPTER 3
Conventional Wisdom Won’t Work This Time
INTRODUCING