News and Views About the Markets and Economy

We know that even if you are unable to go to work, practicing social distancing, or even quarantined, that you still can’t read everything.  So here is a sampling for you of observations and insights from people we turn to from time to time.

Bretton Woods Research writes that we are only in the third inning of this process of Federal Reserve actions, falling oil, shutdowns, and adjustments.  It foresees a lot more downside for the stock market: “Depending on the length of the shutdown, it’s possible to see a downside scenario where the S&P 500 reaches 1750 almost 50% below the 2020 peak.”

That’s almost another 30 percent lower than we are today.

Veteran gold and silver analyst Jim Sinclair’s associate Bill Holter doesn’t pull any punches.  He says global bankruptcy will result from the world’s most over-leveraged shutting down for a month or more.  

“It is over folks,” says Holter.  “The system is coming apart at the seams and the ‘promises’ the world ran so smoothly on for so long are being laid bare. You might ask, which promises? The answer is ALL promises.

Holter points out that precious metals prices on the exchanges are for paper representations of the metals and are quite different from the actual prices for real gold and silver that you can hold in your hands.  “In the metals arena, you see paper pricing extremely weak. However, the real world shows something very different. The US Mint is out of both gold and silver eagles. Other sovereign mints are also running out of supply or already out.”

Conditions have been changing fast.   Be sure to check in with your Republic Monetary Exchange gold professional for current conditions and product availability.

David Stockman is keeping an eye on the growing roll of bailout-ees:  “They are talking about Bailouts for Everybody—airlines, shale producers, Boeing, corporate America, the banks, hotels, restaurants, cruise lines, casinos, small business, medium business, every business and some or all of the households of America in the form of helicopter money from Washington.”

We ask you to bear in mind that when Washington and the Fed bailout everybody when they pass out $1,000 check to everybody, everybody pays.  They really bail out nobody, because the burden is borne by the recipients.  By everybody.  The cost is hidden in the falling purchasing power of the paper money.

And that is extremely bullish for gold.

Even more unhinged, and more bullish for gold is the belief that we – Washington, the Fed, the US taxpayers – can bail out everybody.  Even so, the Fed announced its decision on Thursday (3/9) to make dollar loans to a slew of foreign central banks for the next six months.

ZeroHedge:

“How much dollars will be available? As per the release, the Fed will release up to $60 billion each for the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Korea, the Banco de Mexico, the Monetary Authority of Singapore, and the Sveriges Riksbank and $30 billion each for the Danmarks Nationalbank, the Norges Bank, and the Reserve Bank of New Zealand.”

We will end today’s discussion by looping back around to our own comments recently about the Plunge Protection Team, here.  Yesterday (3/18), White House economic advisor Larry Kudlow floated the idea of a sovereign wealth fund, that the Federal Reserve print money to buy stock.  Kudlow war purportedly limiting the idea to companies the seek government aid in the COVID-19 episode.  

But that kind of limitation will fall quickly.  We’ve seen these kinds of things before and we’ve seen this particular idea coming.  It is a reflection of the unmatched influence of the government’s Wall Street cronies.  Taken to its logical extreme, they basically want to empower the Fed to buy stocks and guarantee their stock market profits.  This proposal is advancing quietly, but quickly.  

As we said, “If it is allowed to do this, say goodbye to American prosperity.  Cronyism and influence peddling will run rampant in a carnival of corruption as state bureaucrats and officials decide which stocks to buy and at what prices.  As money flows to the influential and the well-connected, honest pricing, innovation and free-market competition will grind to a halt, product inferiority will rule the day and the living standard of the American people will fall hard.

“It will be Mussolini time in America.  

“Buy gold.  And if the government starts buying stocks, buy more gold.”