First Half of 2022 Grim for Stocks, Bonds, and Crypto

01 Jul

First Half of 2022 Grim for Stocks, Bonds, and Crypto

Gold Holds Its Own; Silver Demand “Insatiable”!

Between inflation in double-digit neighborhoods and a dark-robed creature named Recession knocking on the door, 2022 has been a tough year for stocks, bonds, and crypto-currencies. 

It doesn’t help that the year is only half over.

A few first-half numbers:

The S&P 500 tumbled 20.6 percent, the worst start for a year since 1970;

The DJIA fell 15.3 percent, the worst start since 1963;

The Nasdaq fell 29.5 percent, the worst start in its history;

Bitcoin fell below 20,000, quite a collapse from 67,000 just eight months ago.  The Wall Street Journal’s description was vivid: “Crypto’s rocket ship to the moon crash-landed back on Earth in the second quarter”;

Mortgage rates have risen to multi-year highs.

We don’t normally spend a lot of time on technical analysis, but we want to show you a quick series of charts.  First the Dow Industrials:

 Next the S&P 500:

The Nasdaq Composite:

Despite the carnage and bloodshed, and with Wall Street speculators and hedge funders selling “paper gold” vehicles like gold shares and ETF to meet margin calls and keep their doors open, gold itself managed to hold its own and finish in the black during some of the worst market turbulence since Richard Nixon was president.  While virtually everything else was dripping red ink, gold, which closed on the first trading day of the 2022 at $1,800, finished the first half virtually unchanged (in fact just slightly higher) at $1,807.  

No wonder people look to gold for wealth preservation!

Meanwhile we remind you the Goldman Sachs is projecting gold to finish this year six months from now at $2,500 and that the US Mint continues to point to record sales of its real gold, physical gold products like American Eagle gold coins, while leading precious metals research consultancy Metals Focus in London, calls US demand for retail silver investment products “almost insatiable.”

It looks to us like the pain on Wall Street is just getting started.  We find it easy to take Goldman Sachs’ projection for much higher gold quite seriously.  After all, we have lived through these inflation and market crises before!  So many of the same mistakes are beging made, only this time they debt and money-printing are measure not in billions, but in trillions.