Too Close to Count: How a Contested Election Could Play Out

- October 8th, 2020

With so much at stake and pre-polls so narrow, the potential for a contested election is more probable than ever — and it appears neither candidate will back down easily.

With less than a month to go, the 2020 race for the White House already looks set to be the most polarizing election in history. It certainly is one of the most controversial.  

Following the first presidential debate on September 29, polls had Democrat candidate Joe Biden leading President Donald Trump 51 percent to 43 percent, indicating that the November 3 vote could be close.

With so much at stake and pre-polls so narrow, the potential for a contested election is more probable than ever — and it appears neither candidate will back down easily.

US Election 2020 and Gold

 
Is now the time to buy gold? Read what experts have to say about gold and the US Election!
 

Contested election: Past versus present

Two decades ago, a similar scenario played out during the 2000 election, which pitted George W. Bush against Al Gore. Dimpled chads in Florida forced a recount of the state’s ballots that lasted five weeks, and the election was ultimately decided by the Supreme Court.

While Gore won the popular vote, Bush was able to secure the more important electoral college win — and of course the presidency.

The 2020 election won’t feature Florida’s dimpled chad debacle. But as COVID-19 cases begin to rise again globally, more Americans will likely to choose to vote via mail, especially with social distancing measures in place and fewer polling stations available.

Counting absentee ballots will take days, if not weeks, meaning that the results of the quickly approaching election won’t be official until well after voting day. Add to that the controversy around potential voter fraud, and it’s likely to be a bitter battle of ballot counting.

“We’ve got one side that’s basically come out and said, ‘We’re not going to lose this election, and we’re not going to let you win,'” said Byron King, who writes the Whiskey and Gunpowder newsletter at Agora Financial. “And it gets into the whole issue of the ballot harvesting and cheating.”

King was referring to Democrats not conceding if Trump is re-elected. However, when asked during the September 29 debate if he would urge his supporters to stay calm during the prolonged tally period, Trump skirted the question. Instead, he encouraged his supporters to go to the polls.

“I’m urging my supporters to go in to the polls and watch very carefully, because that’s what has to happen,” he said. The president then referenced an instance of nine military ballots being “thrown out” in Philadelphia. “I hope it’s going to be a fair election,” said Trump.

When asked the same question, Biden affirmed that he would tell his supporters to remain civil. He then questioned the validity of the president’s fraudulent ballot claims.

“They’ve been voting by (mail-in) ballots since the end of the Civil War, in effect,” said Biden.

“Why is it, for them, somehow not fraudulent? It’s the same process. It’s honest. No one has established at all that there is fraud related to mail-in ballots, that somehow, it’s a fraudulent process.”

Contested election: Uncertainty will shock markets

A contested election would throw the country into a suspended state of flux, and it would also crank up the level of uncertainty the already battered markets have dealt with this year.

“That’s probably the worst outcome, and not to get too wild-eyed here, but it could get really bad,” said Independent Speculator Lobo Tiggre. “I find it deeply disturbing how much the red versus blue antagonism has grown stronger, and the hatred … both sides are violent now.”

He believes the descent of public discourse and the polarizing disdain are cause for concern, especially for a country that needs to face so many issues post-COVID-19.

“It’s one thing if you disagree with one another,” said Tiggre, who described the situation in America right now as a tinderbox. “But if you hate each other, if you think the other side is evil — who talks to somebody they think is evil?”

Danielle DiMartino Booth, founder and chief strategist at Quill Intelligence, already sees evidence of the uncertainty an undecided election could introduce to markets.

“You do see volatility priced out into the election becoming much, much more expensive,” she said.

DiMartino Booth continued, “In other words, investors have already told the market by pricing in protection against declines in stock. That’s very expensive insurance to buy right now, if you will. So markets are definitely anticipating a lot of disruption around the election.”

While the current situation presents a grim outlook, Tiggre, who is the CEO of Louis James, pointed to the last election and the way markets rebounded quickly.

“The market thought Hillary (Clinton) would be better for stocks, and reacted violently when — surprise, surprise — Trump won,” he said. “And then he came out and sounded presidential and sounded supportive, and suddenly markets were happy again.”

That is only one data point, as he explained, but an important one to keep in mind.

“I think all bets are off the table if there’s big change, and we just have to see how it plays out. All of this uncertainty though is good for safe haven assets,” noted Tiggre.

In particular, he is fond of gold and silver, and sees upside to both metals moving forward.

“We have to remind people that silver is not just poor man’s gold,” he said. He pointed out that the white metal has tracked the gold price much better during this economic turmoil than expected.

Silver’s positive performance since March, which has seen it rally as high as US$29.14 per ounce, is also proof that the metal is still valued as both a currency and industrial metal, dispelling notions that it has its lost monetary connection to the other precious metals.

“It does clearly have its industrial side and got whacked harder than gold in March during the meltdown,” said Tiggre. “But silver is still tracking gold, and many days where markets have been down and industrial commodities have been down, silver has held up with gold.”

The resilience both metals have displayed bodes well for their performance for the rest of the year.

“I just don’t see a scenario that’s bad for gold. A correction is possible, sure,” he said. “There are rare cases to be made, and I could make them, but I don’t think they’re the most likely. So I’m very comfortable with gold, silver.”

Contested election: Public trust down, gun sales up

With just over a month until election day, public trust in the government continues to sit near all-time lows, according to Pew Research.

A September poll of American adults found that only 20 percent trust the government in Washington to “do the right thing” just about always or a majority of the time.

As faith in the government flounders, gun sales have soared through the roof. Traditionally sales spike in election years, although this year saw sales increase early on in response to the pandemic.

A potentially contested election would be a dangerous addition to the already fractured social structure in the country. “It’s the last thing anybody wants to see, but people are scared,” said King.

“I mean, look at gun sales, look at ammunition sales. Guns are just flying off the shelves,” he added. “I think gun sales year-over-year are up something like 80 percent, and ammunition sales are up 140 percent year-over-year.”

King, who considers Biden a “deep state” candidate and Trump a pro-American, agreed it will be bad if a clear winner isn’t decided on election day. “It’s going to be ugly,” he said.

If the tally is close and neither candidate wins by an excessive margin, the electoral college will play a crucial role in selecting the next leader. Following the November election, the electoral college will meet in December to cast ballots for president and vice president.

Those ballots will be counted on January 6 and could potentially lead to more contention.

The current cabinet positions expire on January 20, meaning that if there is a stalemate the Presidential Succession Act would be enforced and the speaker of the House would become head of state.

This year will be especially interesting with the number of mail-in ballots that can only be opened on election day. And added to that is the fact that 43 of the 50 states allow candidates as well as voters to request recounts of counties or entire states.

What’s more, some states — including the key battlegrounds of Florida, Arizona, Pennsylvania and Ohio — are automatically mandated to recount if a win is below a certain margin.

Voters are having to grapple with the many issues plaguing the nation, and the election antics have only added opacity to the important discussions at hand.

With so many things to consider and vote on, as King explained, “You can’t vote on personalities.”

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

US Election 2020 and Gold

 
Is now the time to buy gold? Read what experts have to say about gold and the US Election!
 
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