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A Staggering Number of Businesses Are Set to Collapse as COVID-19 Continues to Accelerate
A Staggering Number of Businesses Are Set to Collapse as COVID-19 Continues to Accelerate
Despite the chaos of the world around us, despite spiking COVID-19 cases, and despite a record number of businesses shuttering their doors (many never to re-open again), markets remain relatively healthy.
(Chart source, google finance)
This obviously defies all common sense and rationality, but that is unfortunately the world we live in now—an artificial world, where the markets are driven purely by wild speculation and grotesquely negligent money printing.
Although there is a “recovery” story to be had, we are far from it. And the current state of affairs in the markets is nothing more than an illusion, like so many other parts of our economy.
The stark truth of the matter is that the world is a mess at the moment, with political strife, upheaval, and chaos coming from all directions. And we have come nowhere close to peak boiling temperatures.
COVID-19 Continues to Accelerate Worldwide
One such form of disruption and arguably the world’s biggest immediate problem is the coronavirus pandemic. Although far less deadly than at first predicted, it continues to spike across the globe, as the world suffers from the third straight record jump in new cases of COVID-19.
(Chart Source, Bloomberg)
Although many nations have gotten a handle on the pandemic for the time being, many others who originally thought to have had it in check are finding out that cases are surging once again, as restrictions have been steadily lifted over the last couple of months depending on the location.
However, there are a few key nations that have never truly gotten COVID-19 under control, and they are now seeing a drastic rise in both daily deaths and daily new cases. The United States, Hong Kong, Italy, Philippines, and India are just a few.
…click on the above link to read the rest of the article…
Central Banks Begin to Panic
Central Banks Begin to Panic
After rapidly reversing policy in 2019, does it seem to you that the global central banks have moved into full panic mode over the past several weeks? To that point, consider some of the headlines that have appeared over just the past few days.
Let’s start with Count Draghi and his insistence that the ECB restart their QE programs as soon as possible. Beginning next month, the ECB will begin regular purchases of up to €20B in bonds each month.
• https://www.ft.com/content/de4a958a-eab3-11e9-a240…
Not to be outdone, the U.S. Fed went from “neutral” to “Large Scale Asset Purchase Program” in less than four weeks with the announcement on October 11 of a new $60B/month debt monetization program. The Fed also announced that their liquidity-providing repo facilities will remain open through January of 2020, at a minimum.
• https://www.cnn.com/2019/10/11/investing/fed-qe-po…
So what is prompting this quick reversal in monetary policy? Is it simply the worsening global economy, or is something darker lurking in the shadows? As I type, it’s Tuesday morning, October 22, and here is a collection of headlines from just the past week.
First, here’s the Secretary General of the UN—a largely symbolic, international diplomatic post—urging global central bankers, the IMF, and World Bank to “do everything possible” in order to stave off a potential crisis: https://www.zerohedge.com/economics/central-banks-…
Next, the consulting firm McKinsey & Co. is out with a new report that concludes that more than half of the world’s banks may not be strong enough to maintain economic viability in the next crisis(a crisis which is inevitable, I might add ). Remember, the central banks are owned by and serve their own member banks. If the majority of the world’s banks are in financial trouble, then it’s understandable that the majority of the world’s central banks would be quite nervous:https://www.bloomberg.com/news/articles/2019-10-21…
…click on the above link to read the rest of the article…
Currency Wars Have Entered the Next Phase, Gold and Silver Will Move Higher
Currency Wars Have Entered the Next Phase, Gold and Silver Will Move Higher
Gold is trading solidly above the $1500 mark at the time of writing, and I believe we are only just getting started. The currency wars are back in full swing, and they will be more intense than ever.
The United States government, ironically, labeled China a currency manipulator for the first time since 1994, marking a severe uptick in their rhetoric against the Chinese government, as the trade wars continue to spiral out of control with seemingly no end in sight.
Many simply waved this move off as nothing more than what it initially appeared to be: jawboning with no true ramifications behind it. However, others see it as a blatant threat by the U.S. administration against China, as the last time this language was used twenty-five years ago was when China was placed on a currency blacklist.
Some were surprised by this move, as they see it as an overreaction, fearing that we have now moved into another phase of the ongoing currency wars that have bubbled behind the scenes for years—currency wars that are now in plain sight for all to see.
Unfortunately, this should come as no surprise to anyone, as President Trump stated back in 2016 that he fully intended to label China a “currency manipulator”, a statement that was laughed off until now.
This move comes on the heels of a Fed interest rate cut in which the Fed Chief, Jerome Powell, lowered rates by 0.25%, citing fears of a weakening global economy and ongoing trade wars.
Of course, China is far from the only currency manipulator in the world, as countries are constantly “racing to the bottom” in an attempt to lower the value of their currencies. This increases their competitiveness on the international markets by artificially making the prices of their goods lower.
…click on the above link to read the rest of the article…
Third and Final Leg of Stock Market Crash in October or Sooner – Part 3 of 3
Third and Final Leg of Stock Market Crash in October or Sooner – Part 3 of 3
This is the final part in a series of articles explaining why I expect the third and final leg of the crash that began in October 2018 to occur in October 2019, or sooner, and see the S&P 500 fall ~30% to lower lows ~2100-2200.
Until then I expect the S&P to slowly grind higher towards 3000-3150, short-term pullbacks aside.
This matters to Gold, Silver, and the Miners, because when stocks crash, the Fed will be forced to reverse policy to rate cuts, QE, and more monetary insanity on steroids, and that will catapult precious metals and miners to new highs.
There are many reasons why I expect another “Crash in the Fall” like that in 2018. I covered Liquidity, Technicals, Elliott Wave Theory, and Sentiment to support the case for a crash in October, “or sooner”, especially based on how close we are to the expected peak circa 3000 plus. What follows are just a few of the many more.
SHORT INTEREST
This is back to its lowest level since December 2017. We all know what happened next.
INTER-MARKET ANALYSIS
Having held its 200-month moving average yet again, the monthly chart for the 10Y Treasury Bond clearly shows that we have much lower to go yet in yield terms before we hit bottom.
What would it take for that to happen? A crash in stocks? Investors dump equities and race to the perceived safety of Bonds followed by a Fed reversal QE and they start buying treasuries again, driving yields even lower.
And then there is the dreaded “Hockey Stick” which predicted the 2000 and 2008 stock market crashes. This refers to the drop in both 2-Year and 10-Year Treasury Bond yields but the 2-Year yield falls faster as short-term rates are cut or expected to be cut in response to weakening economic and/or financial market conditions.
…click on the above link to read the rest of the article…
Third and Final Leg of Stock Market Crash in October or Sooner
Third and Final Leg of Stock Market Crash in October or Sooner
I shared the first part of this series of articles last week, explaining why I expect the third and final leg of the crash that began in October 2018 to occur in October 2019, or sooner, and see the S&P 500 fall ~30% to lower lows ~2100-2200.
Until then, I expect the S&P to slowly grind higher towards 3000-3150, short-term pullbacks aside.
This matters to Gold because when stocks crash, the Fed will be forced to reverse policy to rate cuts, QE, and more monetary insanity on steroids, and that will catapult precious metals and miners to new highs.
There are many reasons why I expect another “Crash in the Fall” like that in 2018. I began with Liquidity last week, now let’s cover the technical and Elliott wave case for the crash in October (“or sooner”), especially based on how close we are to the peak above circa 3000 plus.
TECHNICALS
Sven Henrich did some excellent work recently on the S&P from a technical perspective, which I am sharing here.
Drawing the upper trend line (see chart below) from the 2007 highs into the January 2018 and September 2018 highs, and the lower trend line from the 2009 lows, the one that was broken in December 2018 and has been hugged by markets for the past several weeks, they intersect at circa 3100.
The middle trend line dates back to the 1987 crash and formed following the 2000 crash, then ended up being resistance in 2014-2015 and twice in 2018. Note from that chart that it, too, intersects the other two trend lines at the same point, 3100.
Circa 3100 also represents 261.8% Fibonacci level derived from the 2007 highs and the 2009 lows.
Three historic trend lines converging at the same key Fibonacci level is a powerful signal. A quadruple convergence, as Sven puts it. And if that wasn’t sufficiently interesting, then consider “when” they converge: October 2019.
…click on the above link to read the rest of the article…
Venezuela is Painfully Reminded of the Golden Rule
He who holds the gold, makes the rules.
This is a motto that you will hear espoused by gold bugs, precious metals advocates, or anyone that has studied financial history in any meaningful way.
The fact is, if you don’t hold it, then you don’t own it.
This is something that I have warned about for years, as people continue to pile into “paper” precious metals assets, most specifically, those that do not guarantee to hold the precious metals in physical reserve, accounting for every oz that they own via regularly scheduled audits.
As Central Banks around the world continue to race into gold, a trend I have been noting throughout the course of this year, some, are being painfully reminded of the golden rule and are ruing the day they ever gave up physical ownership of their most valuable, real asset.
Venezuela, who is currently led by a failing socialist government, with President Nicolas Maduro at its head, is one such country that is learning this valuable lesson.
Venezuela, for months has been attempting to repatriate their gold holdings from the Bank of England, the latter of whom “allegedly” holds a large percentage of the worlds gold reserves since the ending of World War 2.
The reasoning for this, was one of the greatest cons in history, and one that continues to unfold. Western Central Banksters convinced many of the Worlds Nations that it would be “safer” to hold their reserves within the United States and England.
Ironically, over the last few decades, this has been just about the worst place in the world to hold your gold bullion, as these nations have rehypothecated this gold to near infinity. But don’t worry, they claim their “good” for it.
…click on the above link to read the rest of the article…
Preparing for Turmoil, Central Banks Turn to Gold
The trend is your friend and in this case, the trend comes tinged with a yellowish hue.
As I have been highlighting recently, Central Banks around the world are finally waking up the the harsh reality that is our current geopolitical and financial situation.
On the surface, things appear to be healthy, things appear to be running along smoothly, but as soon as you scrap even an inch below the surface, and look at the skyrocketing debt levels and increased fragility of many Western nations, you quickly begin to realize just how unstable things have become.
Certain countries have been ahead of the curve, accumulating gold hand over fist, taking every opportunity that arises to add to their holdings, whenever any large amount of gold hits the markets.
As I wrote about last week, both Poland, who has been incrementally adding gold to to their reserves at a steady rate, and Hungary, who increased their gold reserves by 10 fold in one purchase, are two countries to join the growing ranks of countries who have caught the “gold fever”.
Other wealthy individuals are silently, but steadily allocating some of their phenomenal profits that they have received from this record breaking stock market, into precious metals. Perhaps sensing that the top is near and that the inevitable correction is forth coming.
Whether or not 2018 is the year that we see a collapse is yet unknown, but likely we are going to see a much clearer picture painted as the 2018 midterms wrap up and come to a close.
Many analyst are predicting that we may see a massive correction if Trumps GOP suffers significant losses, as consumer confidence may be rocked and businesses may begin to second guess many of their recent decisions.
…click on the above link to read the rest of the article…
The Same Old COMEX Games
Just three weeks ago, we warned you to ignore newsletter pundits who were claiming that one day soon, The Banks that operate on the COMEX will be long and on the side of the regular investor/stacker. As with all nonsense, this sentiment ignores reality. Before reading further, I urge you to read this post from October 9: https://www.sprottmoney.com/Blog/the-banks-are-not…
October 9 was a Tuesday, and that’s pretty handy because all of the CFTC’s Commitment of Traders surveys are taken after the COMEX close on Tuesdays. Back on October 9, the price of COMEX gold closed at $1191. The CoT survey taken that day was reported on Friday, October 12. And what did it show? Check the handy spreadsheet below from Goldseek.
As you can see, on October 9 the positions were summarized as follows:
• The Large Speculators (primarily hedge funds, managed money, trading funds) NET SHORT 38,175 contracts. This was a new ALL-TIME HIGH NET SHORT position for this category.
• The Commercials (primarily Big Banks like JPM, HSBC, MS, etc.) NET LONG 25,866 contracts . This was a new ALL-TIME HIGH NET LONG position for this category.
• On the disaggregated report, the sub-category “Managed Money” was historically NET SHORT 109,544 contracts, as you can see below.
Fast-forward two weeks to Tuesday, October 23. The price of COMEX gold had risen $45 to $1236 and another CoT survey was taken. This report was released last Friday, the 26th, and it is shown below.
So, on a price move of less than 4%, it’s quite clear that The Banks have revealed themselves as NOT “on your side”. Not now, not ever. The positions on this most recent report can be summarized as:
…click on the above link to read the rest of the article…
Ten Years After the Crash, We Have Survived, But Have You Prospered?
Ten Years After the Crash, We Have Survived, But Have You Prospered?
The year is 2018 and we have survived.
Despite all the fear-mongering, all the pessimism, all the chaos, the markets are still here, and they are thriving.
This has blown away many, as their are countless experts in the precious metals community and the financial world at large, who believed that this house of cards would of long ago come crashing down long ago.
Sparks have flown through the air on an almost daily basis, threatening to set blaze to this bone dry kindling that we call a financial system. Yet, time and time again, the hose is turned on and the small embers are blasted out of existence through a torrent of fiat currency.
The financial “elites” have done what many thought would be impossible, and for that, you have to give them credit, well, at least in the short term.
Endless amounts of money printing may have helped paper over the problem, and arguably, it has, as ten years after the financial crisis of 2008, we are still standing, we are still here and the modern world is still ticking by with each passing day, regardless of how dysfunctional our current political system may be.
So why do people not feel it? Why do so many people still feel like there has been no recovery, and that they are still living through the 2008 crash that is now ten years in our past?
A recent report by Betterment highlights this point and showcases, that despite the market being up a stunning 200% since the market bottom, the majority of Americans are not aware of this, and in fact believe that the market is either flat, or has moved even lower than the 2008 crash.
…click on the above link to read the rest of the article…
What Do The Banks Know?
Much is being made of the current makeup of the Commitment of Traders report for Comex gold. However, similar historical irregularities are appearing in other assets, too. Thus the question, are The Banks setting the stage for a wildly volatile second half of 2018?
First, an update on the Commitment of Traders report for Comex gold. For the survey week ended Tuesday, August 14, more astonishing changes appeared within the general CoT structure:
- The Large Speculator (hedge funds, managed money, trading funds) NET position is now SHORT 3,688 contracts. This is the first reported NET short position for this group since December of 2001.
- The Large Speculator GROSS short position is 215,467 contracts. This is a new ALLTIME high.
- The Commercial (Big Bank) NET short position is just 7,350 contracts. This is the smallest Commercial NET position since the CoT report surveyed on December 1, 2015.
- The Commercial GROSS short position of 171,545 contracts is the smallest since the survey of January 5, 2016.
- The Large Speculators are now GROSS short 43,922 contracts more than The Commercials. This is a new ALLTIME record.
And consider this, too. That 215,467 contract GROSS short position for the Large Speculators is truly an unbacked position. This group has no metal to deliver, nor do they contract with miners for future delivery. Instead, they are simply speculating on the future direction of the Comex derivative price. As a reminder, each Comex contract was originally designed to represent the potential obligation to take or make delivery of 100 ounces of gold. Thus, with a GROSS position of 215,467 contracts, the Large Speculator category is short 21,546,700 ounces or about 670 metric tonnes.
…click on the above link to read the rest of the article…
Trump buys into the Krugman con
Leading economic indicators suggest that the Republicans are headed into the fall mid-term election season with the wind at their backs.
Real GDP growth hit 4.1% during the second quarter. The unemployment rate recently slipped to 3.9%, and the US Federal Reserve is finally starting to meet its inflation targets.
Things are so good that U.S. president Donald Trump calls it “the greatest economy in the history of America.”
Yet while all appears well on the surface, there are growing concerns among gold investors about the sustainability of the current pick-up.
Works well in practice… but does it work in theory?
Part of the problem relates to the old joke about French university professors. “It works well in practice,” they reportedly ask. “But does it work in theory?”
The same question underlies Trump’s economic practices. They are clearly generating short-term results. But they don’t appear to adhere to any underlying philosophy.
Republicans liken Trump’s tax cuts and his deregulation efforts with policies implemented by the Reagan Administration. However, the comparison is far from perfect.
For one, the Trump Administration’s growing tariffs on imported goods, which amount to hidden sales taxes, are gradually undoing the effects of his earlier tax cuts.
Worse, the Trump Administration’s practice of choosing which sectors will benefit from protective tariffs and which won’t amounts to a drastic increase in government intervention in the economy.
Making government great again
Taking a step back, Trump’s policies incorporate many of the “big government” themes advocated by mainstream economists from both major political parties during much of the past four decades.
Led by Paul Krugman, a Nobel Prize winner, New York Times columnist and professor at CUNY, the economics profession has consistently advocated growth in government spending, borrowing and credit creation in the hopes of spurring economic growth.
…click on the above link to read the rest of the article…
The Foundation of the West is Rocked as Tribalism Becomes Normality
The Foundation of the West is Rocked as Tribalism Becomes Normality
In our modern digital age, news comes at you fast. Never before has the spread of information traveled so quickly or social media been so influential. And never before have problems been exacerbated so rapidly.
The West is in turmoil, as chaos seeps into the very fibers of the institutions built up by global elites over the last century—institutions now finding themselves under assault.
Anyone paying attention, or reading my series of articles, knows there is a massive shift occurring in the zeitgeist of the West. It’s a shift that only occurs once in a lifetime, if at all.
We truly do live in interesting times, but they are dangerous too. The risk of structural collapse in many of our political systems is at all-time highs, with citizens all across the West demanding change from their leaders.
People are rapidly descending into “tribes”, consumed with self-reassuring, confirmation bias-assuaging articles written by their fellow “tribe” members.
Whether this comes from the “radical left” or the “alt right” doesn’t matter. What does is the damage it is doing to our systems and the risk they now pose to the dwindling minority of sane centralists.
…click on the above link to read the rest of the article…
We see this change unfolding in front of our eyes, as scarcely a day goes by without reading about another “crisis” that threatens the very fabric of our society.
Within the past week alone, depending on which “tribe” you belong to, there have been numerous victories or catastrophes develop in rapid succession.
Last night, President Trump scored another major victory in the name of conservatives within the United States when he announced the nomination of his second Supreme Court pick, Judge Brett Kavanaugh. This came after Justice Anthony Kennedy announced his retirement a few weeks ago.
…click on the above link to read the rest of the article…
Booming Stocks, Booming Home Prices, Booming Risk of Collapse
Booming Stocks, Booming Home Prices, Booming Risk of Collapse
The American Dream of home ownership is once again on its death bed.
Home prices have dramatically increased in price, rising from their 2012 lows by a stunning 75%, with the average median home price now resting at $245,000!
This is up 4.5% over the last year alone, which means prices are increasing and increasing fast.
This has made home ownership essentially unaffordable for many millennial’s who are looking to purchase their first home. This is causing more and more to either return home and live with their parents, or asking them for assistance in purchasing their home.
Profits for many businesses are rising and consumer confidence is way up, recently hitting a thirteen year high,but this has not directly translated into an increases in wages, which continues to stagnate .
This truly is the worst of both worlds for many average working citizens, who are just trying to make ends meet and pay the bills. This is what many in the precious metals community have warned about for years, stagflation.
Sadly, many are completely ignorant to what is unfolding in front of their eyes, and they appear incapable of seeing just how similar this current environment is to that which led to one of the greatest meltdowns in modern history, the 2008 crisis.
Stocks have roared higher, causing valuations to become more and more disconnected from reality, home prices are becoming increasing more unaffordable and wages are stagnating in comparison to inflation. This has the hallmarks of a disaster in the making.
These problems on their own should cause one to take notice and pause in reflection, but this is not it, these are not the only problems that need to be taken into consideration.
…click on the above link to read the rest of the article…
