Obama Is In The Catbird Seat

On March 2 of this year I posted this: Events May Determine Obama's Fate, an article which outlined several possible events that could tip the coming Presidential election either to Obama or to Romney.

First on my list of events that would favor Obama is "A Well-Timed QE3." Yesterday, Ben Bernanke announced that the Fed would begin buying $85-billion worth of debt every month until further notice beginning today.

This is bad news for America, but good news for the President. Anyone who believes the Fed operates independent of the administration and of politics is a fool. Whether this infusion of new money into the financial system is "well-timed" is yet to be determined. I had predicted a June QE3.

Yesterday, the stock market exploded upward at the news. Expect the administration to announce the economy has rebounded. In the next two months, expect the media to publish many stories about new economic activity in the private sector which will generate new jobs. Expect the CEO's of large corporations to announce new plans for expansion and/or to cancel planned retrenchment activities.

Of course, the timing of this QE3 will prohibit any of this propaganda from being verified by official government statistics. Perhaps that's why it happened now rather than in June.

Another advantage of doing QE3 now is that its primary negative effect -- a surge in price inflation -- will not be noticed by consumers until after the election. The dollar will eventually fall against rival currencies, but rival governments are sure to print their currencies as well, thus mitigating the dollar's fall in value against them. Any action by the Chinese, Russians or others interested in ending the dollar's reign as the world's reserve currency would also occur after the election.

By the way, the only remaining "event" on my list that could benefit the President is "A Well-Timed National Emergency." This event is still possible should QE3 disappoint the President's reelection campaign by not exhibiting the expected effects -- or by exhibiting unexpected adverse effects. The possibilities are endless. War in the Middle East is always on the table. Another financial "crisis" can always be manufactured. And, of course, urban violence of one sort or another may flare up at just the right moment. Coincidentally, ABC News reported today that the "FBI Warns of Violence in America Over Anti-Islamic Movie."

Stay tuned.

By the way, the events I outlined that could benefit Romney seem unlikely to occur prior to the election. Although economic activity is still stagnant, Obama and the media are effectively papering over the bad news that too many Americans are sick and tired of hearing. There seems no chance in hell that birther issues or Obama's college records will injure him. The truth about Bin Laden's death is trickling out but there are no bombshells. Fast and Furious has been defused. The Solyndra story has no legs.

The bottom line is Obama is perched in the driver's seat -- or should I say the catbird seat -- and Romney can do nothing about it except spit into the wind. 

The advantages of incumbency and a sympathetic media cannot be overestimated.