Here we are heading into the holiday season 2020 and it sure feels different this year than in years past. The Covid-19 scare is one reason as more and more draconian measures are being taken in many states but this time it appears that the “help” of the federal government is not likely coming anytime soon.
Last week the jobless claims were rising again at over 742,000 new claims. Still over 20 million are collecting unemployment in one form or another. During the holiday season for the past 70 years we have been used to seeing extra staff added to take care of the holiday rush. This year, as many will be shopping on-line, we are seeing a reduction in employment rather than a surge.
If these lockdowns continue to get implemented, we may see even more unemployment, far more bankruptcies (added on to the already record amounts) and many more jobs that will be lost forever.
It is not only retailers who are going bankrupt. The insolvency meter is rising further and further up the food chain.
NYC Transit may be laying off 9000 employees UNLESS they gat a 12 Billion dollar bailout from the Fed. This sounds like extortion to me. As a matter of fact, cars pay $17.00 to cross the bridges and tunnels to Manhattan (heaven only knows what the big rigs are paying PER TRIP) and 8.50 each way over other bridges between boroughs. Some of this money goes to the MTA and STILL they are broke. Maybe it’s time to privatize and move on!
In any case, MANY of our poorly run states are EXPECTING a bailout of their unpayable debts. Without those “bailouts” many of these states will have to admit their insolvency because their rope has run out.
As I have said before, I don’t believe for a second that this is a bailout. I believe this is a buy-out. The Fed will conjure up “money” from nowhere, send it to the states, cities and whomever else wants it (with interest attached to THAT “cash” also) and sit back. For a short period of time it will offer relief but as the debts continue to grow and revenues are stagnant the same situation will arise again. At that time look to those “in charge” to demand selling assets (or just foreclosing on those assets) to get some more relief.
Sounds impossible? Ask the Greek people who have seen just this sort of outcome.
With all of this turmoil, “money printing and buying” etc. you would normally think that gold and silver should be rocketing higher. For the year- they have. In the last month or so we are seeing a pullback that is, in my opinion, a healthy thing. There is no asset that goes straight up. In addition, after the nearly $1 Billion fine paid by JP Morgan for “tens of thousands” of instances of rigging the metals markets making who knows what kind of obscene profits, the metals came under more pressure than we have seen all year. It could be that they are emboldened yet again because they can rig the system thousands of times, pay a get out of jail free fine and continue to rip off many investors.
I believe that prior to the “agreement” with the government these actors may have been held back because they were charged under the RICO act. Basically, their metals trading desk was deemed an organized crime racket.
So much for anyone who has mocked me for exposing this for the past 10 years. Every fraud has its own demise built in. I can’t wait until the SHTF on this scheme.
It appears some investors may be planning a bit of a surprise for all those manipulating the metals markets. I was watching a video with Andrew McGuire (metals trader in London) who, along with others are at least discussing a class- action lawsuit against those manipulating the markets. Basically, he thinks that this guilty plea opens that door up.
Interestingly, in an article I saw yesterday on Wall Street On Parade it said that “From Soros to Warren Buffett, The Smart Money Is Dumping Shares Of JP Morgan Chase. Hmm… maybe?
Personally, I am expecting more large moves higher in metals and miners prior to the end of the year as the election results become more clear as we move forward. Right now there is relative calm in the streets but when a clear winner is announced about half of the population will be severely disappointed.
I believe a Trump victory would move prices higher more quickly but a Biden victory may be more bullish for the metals over a longer time horizon. Time will tell.
It appears to me that this lull in activity and pullback in prices is a good reason to increase exposure to metals and miners if you are inclined to do so. I don’t know when this pullback will end but I believe the downside risks are minimal and the upside potential is exponential-particularly if the suppression scheme fails to work or even more importantly- if their own actions over the course of this year causes a short-squeeze that may amaze many. My main point is that we are in a bull market and it is not time to try and time things because if you are out when the time is right you may miss a large part of the upswing and for what- a few bucks?
Another key factor for my bullishness on the metals is the increasing attacks on American dominance in financial matters. The Chinese and ASEAN countries just signed a trade deal which encompasses 1/3 of the world’s economy and EXCLUDED the USA.
The RCEP agreement just established the world’s largest trading bloc. It includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, Australia, China, Japan, New Zealand and South Korea.
This is in addition to China’s Belt and Road initiative which includes many other nations. If the dollar loses value it appears that gold rises but it is just actually the dollar losing value. This is a main reason why central banks have kept the price of particularly gold and silver capped because it exposes just how badly they are debasing the currency. When compared to other fiat currencies they are all being measured against moving targets- mainly all lower overall just at different speeds.
For anyone who thinks that 2021 will begin and things will go back to “normal”, read a few of these quotes:
- From the BRIC’s summit on Tuesday : The global economy is experiencing “the worst recession since the Great Depression of the 1930s” (Xi Jinping- Chinese leader) Someone being in a position of authority and being honest about our current predicament- that’s a novel idea!
- “World Markets Slide On Spreading Covid Lockdowns” This isn’t over by a longshot.
- “Hundreds Of Companies That Got PPP Loans Have Gone Bankrupt” and that is before this latest wave of lockdowns that are popping up all over our country and the globe.
- Jerome Powell (Fed President) The economic recovery is “slowing, uneven and incomplete” “We’re Not going back to the same economy. We’re going back to a different economy”. “The time for fiscal discipline is NOT now”. Sounds to me like he sees we are in a world of hurt and is ready to crank out trillions more when he is inevitably asked to do so. Actually, he appears to me to be begging to be asked!
- SoftBank CEO Masa Son “Warns of a Lehman-like Crisis That Could Crash The Global Economy”. It’s pretty “crashed” already in my opinion.
- Bill Gates “50% of business travel will not come back” Pretty sad for airlines, car rental companies and hotels across the board!
- NYC Mayor “Indoor Dining Will Be Shut Down In The Next Week Or Two” again showing his ignorance, if the spread of the virus is spiking NOW why will he be acting in a “week or two”?
- “Largest Food Distribution EVER” Thousands of cars lined up at a Texas Food Bank.
As I was chronicling the collapse of our economy over the past 3 years many asked “If things are so bad where are the food lines like in the 30s? I explained that, unlike the 30s people had SNAP cards and were out there but not visible. This is still the case as almost 14% of our population (nearly 45 MILLION people) depend upon help to afford to eat. Those record-long lines are showing that even the tremendous help offered by the government is nowhere near enough.
My hope is that we can all work together and get through this. Personally, I believe that we need to stop watching the MSM propaganda and start talking to each other. We need to go back to having respect for others opinions. We also need to go back to our faith- whatever faith that may be and shun the political, commercial and material things that are fleeting at best.
Hopefully, when this runs its course the USA can get back on course and create a great future for our children and grandchildren. Today that seems like a fantasy, but nothing is impossible if you believe!
Any opinions are those of Mike Savage and not necessarily of those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information in this report does not purport to be a complete description of securities, markets or developments referred to in this material. The information has been obtained from sources deemed to be reliable but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
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