As Support for Obama and Coal Erode, This Asset Is a Safer Investment
Since last week, four polls have come out showing that President Barack Obama’s job approval rating is falling hard after several scandals. While Obama remains popular with Democrats and has always been unpopular with Republicans, he’s now losing serious support with Independent voters.
Rasmussen Reports announced that Obama’s approval rating slipped to 53%; in The Economist Obama had a disapproval rating of 52%; while Fox News reports that Obama’s disapproval rating has risen to 51%. President Obama’s best showing came from Gallup, in which his approval rating and disapproval rating were tied (factoring in the margin of error) at 46%.
It gets worse for Obama. According to a recent Washington Post/ABC poll, even George W. Bush is more popular than Obama: 47% of Americans now approve of the way Bush handled his job while in the Oval Office.
American voters are unhappy with Obama’s handling of the deficit, the economy, gun control, health care, immigration, and foreign affairs. And that doesn’t even take into account the number of more recent scandals that have plagued the White House.
Voters who think President Obama is untrustworthy are also unhappy with the way he handled the National Security Agency’s massive collection of personal phone and Internet records, the Internal Revenue Service (IRS) improperly targeting conservative and pro-Israeli groups, and the seizure of journalists’ phone records.
Americans have also been slow to forget about the President’s actions regarding the attack in Benghazi, Libya last year that left the country’s Ambassador and three other Americans dead.
And there are other issues Americans haven’t forgotten. During his last Presidential campaign, Obama, in an effort to sway voters in coal-rich states of Ohio and Virginia, said he was a friend of the coal industry and even took credit for increasing coal production during his first term, when in fact, he did not play a part in coal production’s increase. U.S. coal production peaked in 2008—the year before he took office. (Sources: Jeffrey, T.P., “Obama: ‘We Have Seen Increases in Coal Production,’ Energy Dept.: Coal Production Down from ‘08,” CNS News web site, October 17, 2012; “Coal Production, Selected Years, 1949-2011,” U.S. Energy Information Administration web site, last accessed July 2, 2013.)
Fast-forward to June 25, 2013, and all of that coal rhetoric is ancient history. In a nutshell, through his Climate Action Plan, Obama said he wants to reduce America’s dependence on coal to zero. Some experts think natural gas could be next.
These issues have weakened America’s faith in the President, made us doubt his ability to tell the truth, and put a massive dent in the “hope and change” message on which he rallied back in 2008.
With a leader in whom few trust and of whom fewer approve, and with an economic recovery casting doubt—at least, one that can’t operate without the so-called helping hands of the Federal Reserve—where are investors to turn?
That might be a case in which investors should show a little caution. On June 26, only one day after Obama talked about targeting coal—the industry tanked. And since that day, it has not rebounded.
It’s often been said that some of the best investment opportunities present themselves when investors are running for the exits. However, that might not yet be the case for coal. While export sales of coal will offset the huge reduction in domestic use, those interested in North American coal stocks might want to take a wait-and-see approach—at least until the markets stabilize.
Looking to another mined asset that’s taking a beating could be a better option. In this economy, gold still holds great long-term value, is great at preserving wealth, and continues to be a hedge against inflation.
Gold might not be the most popular asset right now, but with the current weak economic underpinnings and a leader in whom few have faith, gold may be one thing you can trust.
This article As Support for Obama and Coal Erode, This Asset Is a Safer Investment was originally published at Investment Contrarians