Maybe the Most Important Election Ever

Who Will Win the Midterm Elections?... [The Daily Reckoning] September 12, 2022 [WEBSITE]( | [UNSUBSCRIBE]( Maybe the Most Important Election Ever - Perhaps the most important elections in our lifetime are less than two months away… - “How can a midterm possibly rank as one of the most important elections of our lifetimes when the next presidential election is still over two years away?”… - Then Jim Rickards shows you which party he believes will win the midterm elections… [Revealed: The $100 Ethereum Merge Jackpot!]( [Click here for more...]( The biggest event in crypto’s history is taking place this Thursday. Is this your chance to turn as little as $100 into a fortune? [Click Here To Find Out]( Portsmouth, New Hampshire September 12, 2022 [Jim Rickards] JIM RICKARDS Dear Reader , As we move toward the midterm elections on Tuesday, Nov. 8, it’s time to turn our attention to the likely outcome and (most importantly for our purposes) the implications for markets. The election is less than 60 days away. That’s a lifetime in politics, but it’s the blink of an eye in terms of what investors need to do to get ready for the potential outcome. My job is to forecast the outcome, explain the policy implications and give the best possible advice on how to prepare financially. We’ve seen a series of elections that pundits warned would be “the most important election in our lifetimes!” This was said in 2008 when Obama was poised to reverse the eight years of George W. Bush. It was said again in 2010 when the tea party rose up to challenge Obama’s big government policies. It was said ad nauseum in 2016 when Trump was described as both a threat to democracy (by Democrats) and the savior of democracy (by America first voters). The election of 2020 was also momentous when the Democrats, elements of the Republican Party, the deep state, the media, Big Tech and dark money from the likes of George Soros and Mark Zuckerberg joined hands in the most pervasive, insidious and at times illegal campaign against a single individual in American history. That individual was Donald J. Trump. He lost by a handful of votes in six cities (Atlanta, Philadelphia, Detroit, Phoenix, Las Vegas and Milwaukee), all controlled by Democrats. But those votes were enough to tip Georgia, Pennsylvania, Michigan, Arizona, Nevada and Wisconsin into the Democrats’ column and hand the presidency to Joe Biden. Those elections were all important to both sides for some of the reasons mentioned. Yet the 2022 midterm elections will be more important than any of them. How can a midterm possibly rank as one of the most important elections of our lifetimes when the next presidential election is still over two years away? Surely, the presidential election must be a bigger deal. The reason is that some policies are irreversible. Some policies produce results that cannot be changed in the future regardless of who wins elections to come. It’s like a ratchet. You can turn it one way but you cannot turn it back. If Democrats retain congressional control, the Biden administration will have two more years to impact America in ways that can’t really be reversed. These include energy policy, for example. Energy infrastructure investment (drilling, leasing, refineries, etc.) has lead times of five⁠⁠–⁠⁠10 years and payout periods of 20 years. Given that horizon and Biden’s hostility to oil and gas, new energy investment will stop now since there can be no reasonable certainty of the industry even existing in five years. Other policies include border security, regulations and social policy. If Republicans regain control of the House or Senate, or both, they will stymie those efforts. How will the midterm elections turn out? Read on for my forecast. Regards, Jim Rickards for The Daily Reckoning P.S. In my 2011 book Currency Wars, I warned that the U.S. was engaged in a special type of economic war. I said that these wars would: Degenerate into sequential bouts of inflation, recession, retaliation and actual violence as the scramble for resources leads to invasion and war. The historical precedents are sobering… Some version of the worst-case scenario is almost inevitable. Now with Putin invading Ukraine, rising tensions with China, inflation, recession, supply chain issues and the potential for greater violence breaking out all over the world… I’m afraid my worst fears are coming true, or at least some of them. [That’s why I recorded this short video message.]( I want to help you prepare for what I fear is coming next. Because if history is any indicator, there could be real trouble ahead. [Click here to view my urgent video message.]( [Attention! Before You Read Any Further…]( Before you read any further in today’s issue, an urgent situation needs your immediate attention. If you don’t plan on claiming this new upgrade to your Strategic Intelligence subscription, you’re missing out on a huge opportunity. Right now is your chance to grab one of the biggest (and most valuable) upgrades our company has ever made to a newsletter. I’m taking Strategic Intelligence to an entirely new level and I’d hate to see you left behind… [Click Here ASAP]( The Daily Reckoning Presents: A forecast — and an important caveat… ****************************** Forecasting the Midterm Elections By Jim Rickards [Jim Rickards] JIM RICKARDS There are 435 seats in the House of Representatives (not counting nonvoting seats for D.C. and some U.S. possessions) and all of them are up for election in November. Right now, the Democrats control the House with 219 Democrats versus 211 Republicans (there are five vacancies). It takes 218 votes to control the House. This means if the Republicans hold the seats they have and pick up just seven seats from Democrats, they will control the House. Will this happen? The 2022 election cycle is more challenging to predict than usual because it’s the first election since the 2020 Census that the House map had redrawn to reflect population gain or loss on a state-by-state basis. Texas gained two House seats, while Colorado, Florida, Montana, North Carolina and Oregon gained one each. The losers were California, Illinois, Michigan, New York, Ohio, Pennsylvania and West Virginia, which lost one seat each. The new district maps favor Republicans on the whole. Another factor favoring the Republicans is that voters often turn back to the party opposing the incumbent president, either out of dissatisfaction with their presidential choice or simply to balance the scales in ways that keep any one party from becoming too powerful. The average loss for the president’s party in a first-term midterm since 1982 was 30 seats. If that were the only information I had, my forecast would be that the Republicans would gain 30 seats this November. That would put the House at 241 Republicans and 189 Democrats, a solid 47-seat majority. Interestingly, a RealClearPolitics forecast based on the average of numerous polls has a forecast of 219 Republicans and 182 Democrats, with 34 seats in the too-close-to-call category. If those toss-ups were decided in the same ratio as the likely winners (55% Republican to 45% Democrat), that would sort the undecided into 19 Republicans and 15 Democrats. That would produce a final House of 238 Republicans and 197 Democrats, almost exactly the result that the historical track record predicts. But can we go beyond statistics and polls to discern idiosyncratic factors that could push the results away from the central tendency? There are two. The first is the trend of Hispanics and African-Americans toward Republicans and away from Democrats. The Hispanic vote has historically been around 70% for Democrats, but recent polls show the Republicans may capture more than 50% of the Hispanic vote this time because Hispanics are trending conservative and are culturally anti-abortion, anti-crime and in favor of controlling the border. Hispanics make up about 20% of the total population. If you shift 20% of voters by 20% in preference, that yields a 4% gain for Republicans in the overall vote. With many districts split close to 50/50, a four-point pickup is huge. We’ve already seen this dynamic with Republican gains in seats on the Texas/Mexican border that were solidly Democratic until this year. The same trend is clear in the African-American community. They are 12% of the electorate and vote about 90% Democrat. However, recent voting results and polls show that the African-American vote could go as much as 20% for Republicans this time. A 10% gain in a 12% community adds another 1.2% to the Republican column. Crime and the economy are the big issues for African-Americans. Combined with the Hispanic shift, this could put over five percentage points in the Republican column, enough to tip a lot of close races to Republicans. The second trend that could push the results away from statistical tendencies is Biden’s very low approval ratings. Right now, Biden’s approval rating is 41.8% based on the average of 11 major polls. However, the polls contained in the average include some conducted as long ago as Aug. 15 (Marist) or Aug. 12 (NBC News) when Biden was riding high based on some legislative accomplishments. The more recent polls show Biden at 38% approval (Reuters, Aug, 30). So it is likely that Biden is in a real-time downtrend back toward the 39% level he held most of the summer. Based on these idiosyncratic variables, it seems reasonable to push the expectation of 241 Republicans and 189 Democrats to an adjusted result of 245 Republicans to 185 Democrats, a 34-seat gain for Republicans, leading to a 60-seat Republican majority. In summary, my forecast for the 2022 midterm House result as of now is: Republicans – 245 seats, Democrats – 190 seats. [QUICK! Count how many pennies you see]( [Click here for more...]( Here’s why: If you missed out on making a fortune with cryptocurrencies, the recent crash has finally given you your chance to scoop up cryptos for pennies on the dollar. Literally. Because there’s a cryptocurrency quietly preparing to conquer the marketplace… and it’s trading for 96% below its all-time high. In fact… … it’s trading for the number of pennies you counted above. Get your hands on this bargain crypto while you can. Find out how to make up to an 8,788% return with crypto by 2025. [Click Here To Learn More]( Forecasting the outcome in the Senate is both easier and harder than forecasting the House. It’s easier because there are fewer races and even fewer contests that are genuinely competitive. It’s harder because the smaller sample size makes it more difficult to use statistical methods. We have to go state by state and candidate by candidate to produce an accurate forecast. The Senate has 100 members, two from each state. The current split is 50 Democrats/independents and 50 Republicans. Under the Constitution, the president of the Senate, Kamala Harris (the vice president), can break a tie vote. This puts the Democrats in control of the Senate even with the 50/50 split. There are 35 Senate seats in play this election. The Republicans are at a slight disadvantage going in because they currently hold 21 of the 35 seats being contested, whereas the Democrats only have to defend 14 seats. The good news for Republicans is that 16 of the 21 seats they are defending are rated “Solid” or “Likely” to stay Republican by The Cook Political Report. The Democrats have nine out of 14 seats they are defending rated “Solid” or “Likely.” This means that only 10 of the 35 Senate seats in this election are truly competitive. Control of the Senate will come down to those 10. The Republicans and Democrats currently hold five of the competitive seats each. To control the Senate, either party has to hold their five competitive seats and take one from the other party. If you lose a seat, you have to pick up another just to stay even. It’s that close. My current best estimate is that Republicans will retain Florida, North Carolina and Ohio. Likewise, the Democrats should retain their seats in Colorado and New Hampshire. This means control of the Senate comes down to Arizona, Georgia, Nevada, Wisconsin and Pennsylvania. If that list seems familiar it should. Those were the same five states that were hotly contested in the 2020 presidential race. All five went for Biden. Although those remaining races are all close, I rate Nevada and Georgia as wins for Republicans. Those two wins represent a pickup of two Senate seats for Republicans since both are currently held by Democrat incumbents. I rate Arizona a win for Mark Kelly, which is a hold for the Democrats. Wisconsin and Pennsylvania are both extremely close, but right now one would have to rate those as wins for the Democrats. That’s a pickup of two for the Democrats since both seats are currently held by Republicans. If that forecast holds, we’re back to a 50-50 Senate. A few states would change from Democrat to Republican (Nevada and Georgia) or from Republican to Democrat (Wisconsin and Pennsylvania) but the total 50-50 split would be unchanged. I have one other forecast: The current forecast will change. They always do when you’re still two months away. We could see Arizona, Pennsylvania and Wisconsin tip Republican over the next two months. Georgia could remain in the Democratic column. All I can say is I’ll be watching closely and keeping you updated every step of the way. A prudent investor would keep an above-average allocation to cash, both to withstand the volatility from potential wild cards and to profit from attractive entry points on certain assets while others are losing fortunes. Strap in, it’s going to be a bumpy but fascinating ride. Regards, Jim Rickards for The Daily Reckoning P.S. In my 2011 book Currency Wars, I warned that the U.S. was engaged in a special type of economic war. I said that these wars would: Degenerate into sequential bouts of inflation, recession, retaliation and actual violence as the scramble for resources leads to invasion and war. The historical precedents are sobering… Some version of the worst-case scenario is almost inevitable. Now with Putin invading Ukraine, rising tensions with China, inflation, recession, supply chain issues and the potential for greater violence breaking out all over the world… I’m afraid my worst fears are coming true, or at least some of them. [That’s why I recorded this short video message.]( I want to help you prepare for what I fear is coming next. Because if history is any indicator, there could be real trouble ahead. [Click here to view my urgent video message.]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [James Rickards] [James G. Rickards]( is the editor of Strategic Intelligence. He is an American lawyer, economist, and investment banker with 35 years of experience working in capital markets on Wall Street. He is the author of The New York Times bestsellers Currency Wars and The Death of Money. 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