Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Investors Confused as Governors Spur Protests While Keeping Others Locked Down

Stock-Markets / Financial Markets 2020 Jun 09, 2020 - 02:51 PM GMT

By: MoneyMetals

Stock-Markets

A violent and chaotic week in America’s cities was met with little apparent concern on Wall Street. For the most part, the stock market continued on its merry way higher.

Precious metals markets, meanwhile, are giving back some of their recent gains.

It’s no surprise that silver encountered some resistance at $19. In fact, on May 26th we had pointed to that very level being the next important target for silver in weekly Money Metals News Alert we send out via email every Monday morning.


$19 was also the high point for silver in late February before the steep selloff began. So, this week silver essentially made up for all the losses incurred during the entire virus lockdown panic, although it has pulled back since Monday.

It was a quite a huge run in such a short amount of time though. From a low of right around $12 on March 18th, silver has surged 60% up through this Monday before faltering.

This is very bullish long-term, as silver is showing some real strength and sector leadership. But we would not be surprised if more consolidation occurs in the days ahead before the market makes run to $20 per ounce and ultimately higher.

As for the more widely followed U.S. stock market, its rally hasn’t been quite as breathtaking as silver’s, but it has been impressive in its own right. Since bottoming off the panic selling spree that ended on March 23rd, the S&P 500 has put together a furious 41% advance.

The stock market also rallied 40% off the 1929 crash and into 1930 before crashing a full 80% over the next two years. We bring up that history as perhaps something of an ominous sign of danger ahead.

One threat now looming is that of a second wave of COVID infections and lockdown impositions amid mass gatherings of race protesters and Antifa supporters.

Liberal governors and mayors in many parts of the country have actively encouraged these deadly protests to continue even though they clearly violate their own social distancing directives that are still being imposed on everyone else.

It’s naturally impossible to socially distance at these illegal gatherings of hundreds and often thousands of people in close proximity who are yelling, chanting, kneeling, punching, throwing, and looting.

And obviously in instances when some of the protestors instigate bloody altercations -- as has been happening on a daily basis -- infections can more easily spread.

It remains to be seen whether a meaningful spike in cases will result. The virus has proven to be unpredictable. And nobody really even knows if the lockdowns were effective in the first place at reducing overall infection and deaths.

The so-called public health experts have really been winging it with respect to their guidance.

Some of the same “stay at home” scolds and mainstream media outlets who shamed barbers, churchgoers, and lockdown protestors for trying to carry on a normal life have now revealed themselves as total hypocrites. They are cheering on the agents of mayhem as they take to the streets and put countless numbers of people at supposed risk of an infection.

Maybe this was all just political for them from the beginning.

As investors contemplate these continually disturbing developments, they might want to consider de-risking their portfolios. If the economy locks down again, a Great Depression scenario could be back on the table.

Of course, our monetary system works a lot differently in 2020 than it did 90 years ago. Today, the Federal Reserve can inject digital dollars into the financial system on an unlimited basis.
Not only can it do so, but Fed officials have essentially vowed to do so. They have bought up trillions of dollars in government bonds and corporate junk bonds while providing liquidity for mortgages and small business loans and who knows what else.

We very much doubt that our monetary central planners will allow banks and capital markets to collapse or for deflation to take hold for any significant period.

The real question – and one few investors are asking right now – is how high they will allow inflation to go. While Fed officials tout a 2% target, they have also explicitly stated they are willing to let it run higher than that over an extended period.

There’s no telling how high and for how long. The economy, the stock market, and the U.S. government itself – which is running a record high budget deficit of close to $4 trillion – are now totally dependent on ongoing currency expansion. The Fed simply may not be able to cut off the flow of liquidity to its dependents even when policymakers would otherwise want to tighten in order to tame consumer prices.

In this turbulent and still dangerous environment for investors, owning gold and silver remains an absolute must.

By Mike Gleason

MoneyMetals.com

Mike Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2020 Mike Gleason - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in