Forbes/Simon Moore/3-28-2020

“Here’s the analysis. For February the unemployment rate in the U.S. was reported as 3.5%, or 5.8 million people. If you add another 3 million unemployed to that figure, then, all else equal, you have approximately a 5.3% unemployment rate. That’s a 1.8% increase in the unemployment rate one last week’s data alone.”

USAGOLD note:  Long before the coronavirus came along, economists feared the United States was on the verge of falling into a recession.  The unemployment claims number last week, though, took even the most pessimistic by surprise.  The worry is that it may be just the tip of the iceberg.

Credit Bubble Bulletin/Doug Noland/3-28-2020

“I’ve always viewed Bernanke as a decent man. But as a central banker – as the mastermind for the terminal phase of a runaway global monetary experiment – he’s been a disaster. His analytical framework is so flawed it’s difficult to comprehend the amount of power and discretion placed in his hands. It was Bernanke that invoked the government printing press to resolve whatever might ail the markets or economy. His crackpot theories that the Fed’s failure to print sufficient money supply after the ’29 stock market crash caused the Great Depression should have been sternly rebuked years ago. Worst of all, Dr. Bernanke specifically used the risk markets (stocks, corporate Credit, derivatives and such) as the primary mechanism for post-Bubble system reflation. The former Fed chief is the father of ‘QE,’ ‘helicopter money,’ and the ETF complex that took the world by storm.”

USAGOLD note:  This is the same Ben Bernanke who once told Congress “No one really understands gold prices” while adding that he doesn’t get it either and calling it an “unusual” asset.  Given the curriculum vitae Noland issues in his behalf, it is not difficult to understand why he would relegate gold to the status of financial second class citizen.

Reuters/Paul Arnold and John Revill

“Gold dealers in Switzerland are rushing to keep up with a surge in demand as worried investors seek out lower risk investments in precious metals with financial markets roiled by the coronavirus pandemic. Some sellers are seeing a ten-fold increase in sales of gold bars, coins and other pieces as existing buyers increase their holdings and newcomers enter the market.”

USAGOLD note:  As mentioned previously, we at USAGOLD are experiencing a similar rush for the yellow metal.  We recently sold out of our historic Swiss 20 franc gold coin inventory.

Repost from 3-24-2020

Image:  A pile of pre-1933 Swiss 20 franc gold coins (Helvetia)

Project Syndicate/Noriel Roubini

“But these deficit-financed interventions must be fully monetized. If they are financed through standard government debt, interest rates would rise sharply, and the recovery would be smothered in its cradle. Given the circumstances, interventions long proposed by leftists of the Modern Monetary Theory school, including helicopter drops, have become mainstream.”

USAGOLD note: Doctor Doom outdoes himself in this one. He warns at one point that even if the coronavirus is contained his year, it could potentially return next flu season and cause markets to crash again. The engame? …… a “persistent depression and a runaway financial-market meltdown,” he says.

Repost from 3-24-2020

Successful investors have a philosophy, usually carefully cultivated, that they rely upon in their investment decisions no matter what happens in the markets in the short-run.  Successful investors are rarely shaken by short-term events and, rarer still, guilty of short-term thinking. USAGOLD has always nurtured the belief that gold should not be purchased principally as a speculative investment, but more as an asset accumulated for long-term asset preservation in the form of coins and bullion.  That, in fact, is a viewpoint it shares with the bulk of its clientele.

In A Layman’s Guide to Golden Guidelines for Wise Money Management [Link], R.E McMaster the long-time commodity market analyst and editor of the famed newsletter, The Reaper, offers this advice on “The Law of Long-Term Time Preference”:

“Those who plan, invest and execute long-term win. Win-win decisions, looking to the long term with short-term work and sacrifice, are historically the tickets to success in all areas of life – short-term sacrifice for long-term benefits, deferred gratification rather than instant gratification. This is the difference between wealth and poverty, between class and trash. Those who make primarily fear-based, ego-based, selfish, win-lose, lose-lose, emotional and/or short-term decisions as their primary mode of operation in life nearly always end up miserable, often as losers in a comprehensive sense in life. Such people are walking tornadoes to be avoided.”

Bloomberg/John Ainger, Lou Chen and Ruth Carson/12-8-2019

“First it was Japan. Then Europe. Now investors are scanning the world for the next outbreak of stagnant inflation and tumbling yields.”

USAGOLD note:  We have been beating this drum about the Japanification of the global economy – including the United States – for a long time on this page.  More and more, the evidence mounts that we are in a structural rut from which there may be no escape. Japan has certainly had a rough time with it and now the government is poised to launch another round of infrastructure projects.

Repost from 12-9-2019

Financial Times/Martin Sandbu

“Some economists now call openly for explicit helicopter money in the sense that central banks should directly fund government deficits. ‘I do think the time is right for monetary finance,’ says Lord [Adair] Turner. [the former head of the UK’s Financial Services Authority]. ‘There would be a clarity of assuring people that there is no limit on the money available.'”

USAGOLD note:  Not to throw cold water on the increasingly popular idea of helicopter money, but nowhere in this article are the potential consequences of its implementation addressed. Not even a passing mention …… Funny how crisis always brings out the apologists for running the money printing presses.  Helicopter money is quantitative easing on amphetamines.

Repost from 3-23-2020

Financial Times/Neil Hume and Henry Sanderson/3-24-2020

“Gold continued to push higher on Tuesday as a recent wave of selling dried up and Goldman Sachs told its clients the time had come to buy the “currency of last resort.”

USAGOLD note:  This article goes beyond the Goldman prediction of $1800 within the next 12 months to harvest opinion from a number of top analysts in London and New York.

Repost from 3-25-2020

Streetwise Reports/Robert Moriarity (321 Gold)/3-27-2020

“The message was clear. Just moments before a bank closes the president of the bank says, ‘Your money is perfectly safe in our bank.’ And then slams the door forever. Banks are going to close. The financial system may well shut down for a period. Lots of investors will go to bed rich and wake up poor.”

USAGOLD note:  One thing that has not been addressed directly with everything that’s gone on over the past few weeks is the danger of bank failures.  Moriarity’s warning will provide those who read it with a back-to-earth moment ……

ListVerse/Jonathan H. Kantor/3-25-2020

“The economy is a tricky thing, and it’s vulnerable to all sorts of external threats, as the recent decline of the U.S. Stock Market has proven with the outbreak of COVID-19. Looking back through history, we can prepare and survive so long as we learn the lessons of the past.”

USAGOLD note:  A lot of this “to-do list” amounts to common sense, but it doesn’t hurt to be reminded about what really matters in times like these.  Don’t forget to add some precious metals to your storage stockpile – the peace of mind inclusion.

Bloomberg/Rich Miller/3-26-2020

“Call it Helicopter Credit. … ‘The Fed has effectively shifted from lender of last resort for banks to a commercial banker of last resort for the broader economy,’ said JPMorgan Chase & Co. chief U.S. economist Michael Feroli.”

USAGOLD note:  For most Americans, the Fed’s extraordinary policies seem just what the doctor ordered – some much-needed medicine for a dangerously ill economy.  Not much though has been advanced on the longer term consequences of this massive economic bailout. When we consider the Fed as ‘commercial bank of last resort,’ we must keep in mind that the central bank still remains the ‘lender of last resort’ as well.

SprottMedia/Albert Lu interview of James Grant (Interest Rate Observer)/3-24-2020

“I’m fully aware that the provocation is that of, seemingly, an act of God or at least a viral mutation or something so we ought not to begrudge the Fed its humane impulses. But how do you not mobilize every single possible tool in your kit or bomb in your arsenal next time there’s a downturn in anything? I think this introduces the possibility of everything that gold bugs have been praying for. Are we going to talk about gold? I can’t wait.”

USAGOLD note: Grantian wisdom at its best ……With his sense of humor (as you can tell from the above) well in place.

BNN Bloomberg/Joe Deaux, Yvonne Yue Li and Jack Farchy/3-28-2020

“But the virus, and the global economic collapse that it’s sparking, have created such extreme price distortions that those easy-exit options disappeared on them. Which means that they suddenly faced the threat of having to deliver actual gold bars to the buyers of the contract upon maturity.”

USAGOLD note:  Brother, can you spare a 100-ounce gold bar?

Reuters/Peter Hobson/3-27-2020

“The move would be aimed at reducing the risk of disruption if metal cannot reach London, the world’s most important physical gold trading hub, where trades are underpinned by metal held in high-security vaults.”

USAGOLD note:  It was only a few days ago that we were told there is plenty of gold in London just in the wrong bar size. This article tells us the physical availability problem goes beyond bar size to one of getting gold in and out of the world’s central physical gold hub because of coronavirus-related problems.

Cartoon courtesy of MichaelPRamirez.com