Golden Vaccines And Dow To Gold Ratio

From Bill Bonner:

There’s no natural calamity that the feds can’t make worse.”

CONCLUSIONS:

We have transitioned into a Newer Normal, as happened after Pearl Harbor, Nixon’s decree in 1971, and 2001.

The Fed can buy bonds, do QE4ever, and drop interest rates, but they can’t fix structural problems, lack of supply, decreased demand, and viral infections. Read: “The Fed Can’t Fix What’s Broken.”

Printing dollars does NOT create wealth. Printing dollars creates mal-investments and inflation.

Governments will bail out individuals and businesses. More debt will be heaped onto an existing mound of toxic, never-to-be-repaid, debt.

Stocks often blast higher during bear markets. Bonds rise when central banks promise to buy bonds. But such rallies are not sustainable. Economic and political responses to the virus damaged a weak economy.

Bonds and stocks carry counter-party risk. If Company A can’t pay Company B, then your trust in Company B might be rewarded with default and bankruptcy.

If an employee is laid off, he may not pay his bills. The second and third-order consequences are huge and long-lasting. Think bankruptcies, foreclosures, lost homes, closed businesses, massive unemployment, human misery, social unrest, anger at the elite, and rage against the machines of government and Wall Street.

Gold and silver coins and bars have no counter-party risk. They are universally valued and hold their purchasing power. The same is not true for dollars, stocks, sovereign bonds, commercial paper, mortgage paper, real estate investment trusts, student loans, and so many more.

Gold and silver coins and bars have been difficult to source in the past month. There is no fever like gold fever. Fear and panic are huge motivators.

Many stocks will rise a little and fall a lot. Gold and silver will fall a little and rise huge. Take your choice.

In times of fear and panic, over three thousand years, people have found security in gold and silver bullion. This time is NOT different. Read: “There’s No Gold!”

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Disclosure: None. 

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