Golden Rule Radio: Equities Lose Five Years Worth of Gains

Gold & silver market update as we see the equities market lose 5 years of growth in just 6 weeks. We cover the price movements of gold, silver, platinum, palladium, the U.S. dollar index, and more.

- Source, Golden Rule Radio

Doug Casey Warns Greatest Depression is Upon Us, Gold Remains Ultimate Safe Have Asset

The recent pandemic has provided the catalyst needed to finally push our economy into an overdue “great depression,” this according to Doug Casey, founder of Casey Research. 

Casey told Kitco News that although the virus has popped the bubble, the underlying problem is still due to poor economic fundamentals.

- Source, Kitco News

Coronavirus Pushes London Banks to Consider Additional Gold Storage Sites

The five banks that clear gold trades in the London market are considering expanding their network of storage locations to other countries if it becomes impossible to fly enough gold in and out of London, said two sources involved in the discussions.

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.

The five banks - HSBC, JPMorgan, Scotiabank , UBS and ICBC Standard - clear trades worth about $30 billion a day.

Lockdowns to contain the spread of the coronavirus have already shut down several major metal refineries and most global air travel.

This caused gold prices in New York and London to move sharply apart this week as traders worried that metal couldn’t be flown from London to New York to settle contract obligations.

The London Bullion Market Association, which oversees the London trade hub, on Friday said that it was looking with clearing banks and other market participants at “the feasibility of global delivery outside of London”.

The clearing banks are preparing to accept gold at vaults in Switzerland and elsewhere, the two sources said, adding that a final decision had not yet been taken.

The plans could include vaults that the banks operate as well as storage run by other companies, including refineries and logistics businesses, one of the sources said.

JPMorgan, HSBC and ICBC Standard declined to comment. Scotiabank and UBS did not respond to requests for comment.

The LBMA also said it was working with refiners, shippers and banks “to overcome travel constraints and ensure the physical movement of metal via, for example, chartered or cargo flights”.

Gold is typically transported in the holds of passenger planes, most of which are no longer flying.

The LBMA said there was more than enough refining capacity in the world to meet demand.

“While a few refiners have suspended production as a result of COVID-19, the other good delivery refiners are ready and able to accommodate the industry’s needs,” it said.

Good delivery refiners are those accredited by the LBMA. There are 72 of these in 31 countries, supplying the vast majority of the world’s gold.

However, several of the most important of these refiners have closed. Three in Switzerland - the biggest refining centre - suspended production this week. Royal Canadian Mint also shut temporarily and South Africa’s Rand Refinery has implemented a sharp reduction in output.

The supply disruption has coincided with a surge in demand for gold, which is often bought as a safe-haven investment in times of turmoil.

- Source, Reuters

John Rubino: The Time to Buy Gold is Right Now, Not Tomorrow

Jay introduces the guests and gives updates on some of the sponsors and John Rubino believes it is now time to buy gold before the dollar value falls.

- Source, Jay Taylor Media

Unprecedented Intervention: The Fed Will Purchase $125 Billion In Securities Every Day, Never Ending QE

At the same time as the Federal Reserve announced open-ended QE, which also included purchases of corporate bonds and loans in both the primary (as the ECB does now) and directly in the secondary market (a new twist), as well as expanding its municipal bond purchases while also reactivating the old Lehman-era favorite, TALF facility, the NY Fed announced the specific details of what the Fed's unprecedented QEternity would look like, and they were a doozy.

In short, every single day, the Fed will purchase $75BN in Treasurys and an additional $50BN in BMS, for a total of $125BN every day, or an unprecedented $625BN for the week, or more than the Fed's entire QE2 which was just over $500BN in purchases over 7 months.

Here is the announcement from the NY Fed:

Statement Regarding Treasury Securities and Agency Mortgage-Backed Securities Operations

"Effective March 23, 2020, the Federal Open Market Committee (FOMC) directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to increase the System Open Market Account (SOMA) holdings of Treasury securities and agency mortgage-backed securities (MBS) in the amounts needed to support the smooth functioning of markets for Treasury securities and agency MBS. The FOMC also directed the Desk to purchase agency commercial mortgage-backed securities (CMBS).

Consistent with this directive, the Desk has updated its plans regarding purchases of Treasury securities and agency MBS during the week of March 23, 2020. Specifically, the Desk plans to conduct operations totaling approximately $75 billion of Treasury securities and approximately $50 billion of agency MBS each business day this week, subject to reasonable prices. The Desk will begin agency CMBS purchases this week.

The Desk stands ready to adjust the size and composition of its purchase operations as appropriate to support the smooth functioning of the Treasury, agency MBS, and agency CMBS markets."

And since the Fed is purchasing securities across the entire curve, it will take no less than 7 separate operations every single day to purchase the full amount every day.

Adding to this unprecedented expansion in QE the already purchased $375BN in TSYs/MBS since the resumption of QE, means that starting Friday the 13th, and ending this coming Friday, the Fed will have purchased just over $1 trillion in Treasurys and MBS securities!

And visually, the Fed's takeover of the market will look as follows:

- Source, Zero Hedge

Coronavirus: World Leaders Now In Panic Mode, This is What They Do Next

As the coronavirus outbreak enters the BOOM! phase in a fast-increasing number of countries across the globe, world leaders are scrambling to implement tighter and tougher controls. 

Sadly, most of these desperate official actions will be necessary but insufficient. The time to adopt China's heavy-handed tactics was weeks ago. 

At this point, the virus' spread is assured; we can only play to slow its rate now. Which we should. 

Heart-breaking videos from health care workers show the hard choices being made in overwhelmed hospitals, forced to decide who lives and who dies as each new patient enters the overflowing emergency rooms. 

More of this is coming - a lot more - including truly gargantuation fiscal relief packages, in the coming weeks as we ride up, up, up the exponential curve of covid-19 infections. 

How well will these extreme actions work? Time will tell. Right now, we just have to ride out the storm as best we're able.

- Source, Peak Prosperity

Egon von Greyerz: Fake Markets Supported by Fake Money

Financial and precious metals expert Egon von Greyerz (EvG) operates the largest private gold vault in the world in Switzerland. EvG contends, “They have managed to maintain totally false markets with no real price discovery, certainly since 2009, by just flooding the market with so much money. 

We don’t have any real markets. We don’t have any real prices. It’s all fake. It’s all fake because it’s all supported by fake money.” So, real money, that EvG says is physical gold and silver, is going to be revalued much higher. EvG says, “Technically, gold and silver will soon start the next leg up.

What is happening right now is every single government is printing more and more money. You have one rescue package after another, and that’s just the beginning. 

So, now, central banks are your best friend if you want to own precious metals because they are going to do everything they can to debase the currency.”

- Source, USA Watchdog

COVID-19 Has Exposed Our Financial Fragility

An orgy of borrowing, speculation and euphoria has left the markets on the verge of catastrophe...

Financial markets have experienced the fastest ever crash over the past few weeks. Even during the dotcom bust and the Lehman crisis, stocks did not fall this quickly. In less than a month, we have seen major indices fall almost 30%, and stocks in sectors such as oil and travel down by 80%. We are experiencing terrifying daily declines not seen since the 1929 stock market crash that preceded the Great Depression.

We are at a watershed moment: the coronavirus Covid-19 is a catalyst fast bringing many long simmering problems to the boil. It is exposing the creaking financial systems around us and it will change the way economies function. Economic and financial pundits, however, have been focusing almost exclusively on the short-term effects of coronavirus and so are missing the much bigger themes at play.

Epidemiologists tell us that when it comes to the virus, we are looking at a once in a century event. It is highly contagious and highly lethal. Experts are not comparing Covid-19 to SARS or Swine Flu, but to the Spanish influenza of 1918 that killed between 50 and 100 million people worldwide.

We do not have good data on what the stock market did during the 1918 flu, but we do know that it led to a severe recession. The connection between influenza and recessions is well documented. Going as far back as the Russian flu in 1889-90, the Spanish flu in 1918, the Asian flu in 1957-58 and the Hong Kong flu of 1968-69 — they all led to recessions. This one will be no different.

But this recession will not only be driven by the economic loss of able-bodied workers, it will be helped along too by the steps political leaders take to avoid the spread of the coronavirus. In medicine, the immune system’s response can often be worse than the disease. When the body goes into septic shock, the immune system overreacts, releasing what doctors refer to as a cytokine flood, which can reduce blood to vital organs and lead to death. Sepsis is common and kills more than 10 million people a year. Today, the political reaction to Covid-19 is causing something akin to a septic shock to the global economy.

The recession is likely to be very sharp but brief. Recessions are self-regulating. De-stocking of shelves and warehouses leads to re-stocking. Collapsing low interest rates and oil prices eventually spur spending and borrowing. Government spending and central bank easing eventually feed through to the real economy. While there will be massive panic and bankruptcies today, there is little doubt that markets will be better in a year, and certainly will be in two to three years,

But the structural changes to how our economy operates, however, will be felt for decades to come. And this is in large part because we didn’t learn the lessons of the last crash.

Over the years since the 2008 crisis, central banks have been trying to stamp out every single small fire that flares up (the European crisis in 2011-12, the Chinese slowdown in 2015-16, the slowdown last year); but suppressing volatility and risk only creates bigger fires. Risk is like energy and cannot be destroyed. It can only be transformed.

Forest fires are a useful analogy. California has infrequent, devastating forest fires; the Mexican state of Baja California has many small frequent fires and almost no major catastrophic fires. Both states have a similar climate and vegetation, yet they have vastly different outcomes. That’s because when there are very few small fires, underbrush grows, vegetation increases and creates greater kindling for the next fire. Suppressing small risks only makes them emerge eventually as very big ones.

In politics and economics, massive change events tend to happen not in orderly sequences, but in sudden spasms, like the Arab Spring, or the collapse of the Eastern Bloc. Watching events unfold is often like watching sand grains pile slowly on top of one another until a final, random grain causes the entire pile to collapse. People knew the Arab countries were fragile and that the Eastern Bloc might eventually fall, but predicting which grain of sand would do it precipitate either was impossible.

Physicists call these transitions critical thresholds. Critical thresholds are everywhere in nature. Water at moderate temperatures is disorganised and free-flowing, yet at a given critical value, it has an abrupt transition to a solid. It’s the same with the sandpile: one grain too many can trigger collapse — but which one?

In 1987 Per Bak, Chao Tang, and Kurt Wiesenfeld found that while sandpiles may be individually unpredictable, they all behave the same way. The critical finding of their experiments was that the distribution of sand avalanches obeys a mathematical power law: The frequency of avalanches is inversely proportional to their size. Much like forest fires, the less frequent they are, the more catastrophic they are.

It’s the same with financial markets and the economy. We will experience years of quiet, interrupted by sudden avalanche. Years of slowly adding grains of sand can end abruptly — to our great surprise. Today in financial markets, many unsustainable trends have been building, and the coronavirus is merely the grain of sand that has tipped the sandpile...

- Source, Unherd, read the full article here

Ron Paul: Coronavirus And Market Crash, The Mother Of All Man-Made Crises

As the Fed fires money bazookas at the markets to no avail, governors across the US are shutting down businesses and destroying livelihoods. This is government out of control - it is many times more dangerous than any coronavirus.

- Source, Ron Paul

Supply Constraints: Amazon Suspends All Shipments Other Than Medical Supplies, Household Staples

As we detailed below, Amazon was already struggling to meet delivery goals and having problems with stock, but now, in a blog post, Amazon told sellers on Tuesday that it's suspending shipments of all non-essential products to its warehouses to deal with the increased workloads following the coronavirus outbreak.

"We are temporarily prioritizing household staples, medical supplies, and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and deliver these products to customers," the message said.

That means sellers who use Amazon's storage and delivery network for a fixed fee, through a program called Fulfillment by Amazon, will no longer be able to ship their products to Amazon.

"We are seeing increased online shopping, and as a result some products such as household staples and medical supplies are out of stock."

Additionally, Amazon claims it is trying top crack down on gouging...

"We're also working to ensure that no one artificially raises prices on basic need products during this pandemic and have blocked or removed tens of thousands of items, in line with our long-standing policy. We actively monitor our store and remove offers that violate our policy."

So, we can't leave our homes and all we can buy online is staples and medical supplies...

Amazon has informed customers in a blog post that it has sold out of some household items, and prime deliveries could be disrupted during the Covid-19 outbreak.

The online retailer updated its blog post on Saturday and told customers that “we are currently out of stock on some popular brands and items, especially in household staples categories."

It said that certain items could experience longer than normal delivery times.

"We are working around the clock with our selling partners to ensure availability on all of our products, and bring on additional capacity to deliver all of your orders," the post added.

In the last two months, Prime members have noticed notifications saying "inventory and delivery may be temporarily unavailable due to increased demand" for certain products, such as 3M N-95 virus masks. More recently, the shortage of products has significantly expanded to bottled water, hand sanitizer, toilet paper, and vitamins. 

Amazon noted that it has worked extremely hard to crack down on price gouging, especially seen with third-party sellers selling masks and hand sanitizers for many folds over the suggested retail price.

Social distancing has led to the max exodus of shoppers at brick and mortar stores, who have now gravitated to online shopping to prevent spreading.

"As COVID-19 has spread, we've recently seen an increase in people shopping online," Amazon wrote. "In the short term, this is having an impact on how we serve our customers."
Amazon is gearing up for increased online activity as the virus crisis is expected to worsen in the weeks ahead. A Wall Street Journal report on Monday said the online retailer is expected to add 100,000 workers to cope with the surge in new demand.

The virus crisis will forever change how consumers shop. Social distancing will ensure more online shopping. But in the meantime, Amazon has been caught off guard by the rapid surge and will result in shortages of products and shipping delays.

- Source, Zero Hedge

Listen Up: What History Teaches Us About The Coronavirus Pandemic

Currently there is much debate over what kind of policy is best for dealing with the coronavirus epidemic. We are dealing with a true pandemic and have been ever since the virus was confirmed to have spread to every continent in early February. This will not be over by the summer but will last in a series of episodes for about eighteen months. 

The virus has a bad combination of qualities inasmuch as it is highly infectious but has serious effects in a large proportion of cases and a not-insignificant mortality rate while in addition another large part of those infected show no symptoms. What is worth doing is thinking about the likely longer-term results and here history is the best guide.

Pandemics and major epidemics are a recurrent feature of human history. A true pandemic is global but the term is also used for any epidemic that spreads widely beyond its geographical point of origin. In such cases it is spread by humans, though their movement and that of animals associated with us, such as rats and lice. 

Pandemics are epidemics that spread throughout what we may call an ecumene, a part of the world that has an integrated economy and division of labour, held together and produced by trade and exchange. What we now have is a truly global ecumene.

If we look at the history of pandemics, they tend to occur at the end of a period of increasing trade and economic integration over a large part of the planet’s surface. 

That is because those processes have results, such as much more human movement and increased urbanisation, that make major epidemics more likely. Historically pandemics have spread along trade and exchange routes. 

Several features of the way we live now make a serious pandemic more probable, particularly higher levels of globalization and modern intensive livestock farming because of the way it leads to new pathogens emerging in animals and then jumping species. 

Scientists have been concerned about this for some time and contingency plans drawn up, which are now being tested.

What will be the results of this pandemic?

The evidence of history is that pandemics arrest and delay, or even reverse, the process of economic integration. We are likely to see this now. There will be serious disruption to long distance supply chains and this will make many turn back to more local suppliers with consequently less long-distance integration of economies. This was already starting before the epidemic. 

We are also seeing far more controls over movement and not only across national borders but also within them. This is unlikely to be completely reversed so we will see a hardening of borders and much less international and long-distance travel. 

The pandemic will also possibly have significant political impacts. Historically epidemics weaken the legitimacy of states and rulers and often coincide with popular unrest.

They also weaken elites because they are proportionately more likely to catch infectious diseases, because they travel more and live in large metropoles that are the hubs of trade systems, and in today’s world are typically older than average. 

Another major and more widespread outbreak in China could have serious implications, particularly if the Communist Party is seen to have lost the “Mandate of Heaven” because of it. In addition, this particular epidemic may well add to other pressures on a fragile world finance and monetary system and trigger a sharp fall in asset values which will wipe out much of the wealth of the rich. 

As Walter Scheidel argues in The Great Leveller it is major catastrophes such as wars and pandemics that typically bring about big reductions in inequality.

Finally, and more speculatively, pandemics often have significant psychological and cultural effects. They are often associated with an upsurge in millenarian religion, with the idea that the end of the world is imminent, unless we change our wicked ways. 

This kind of quasi-religious belief has already found expression in movements like Extinction Rebellion and that is likely to gain strength, with unforeseeable political and cultural results. 

In contrast, many people react by thinking that if life is precarious, they may as well live for the moment and not hold back any of their desires. Some people have their trust in experts restored or strengthened but many lose what little faith they had and turn to fringe ideas – again a process that was already under way.

The pandemic the world is experiencing will pass but it will not be the last. Moreover, regardless of how severe it proves to be, history suggests that it will have consequences and impacts on the way people behave in the future, and these may be more important and have longer lasting consequences than the pandemic itself.

- Authored by Dr. Stephen Davies via Al Arabiya

Charles Nenner: No Way to Avoid the Coming Depression

Does it get worse before it get’s better? Nenner says, “I think we are heading for a depression. Usually we go into a recession at a 6% GDP. 

Now, we have 1.5% to 2% GDP. Usually, the Fed Funds are 6%, 7% or 8%. Now they are almost zero. What are they going to do when we get a recession? 

You get very fast a negative GDP. You get very fast a negative interest rate and it’s a big mess. This has been going on for many, many nice years and all the Fed presidents had tricks and let it go. 

They did not want to have a depression in their lifetime like the 1930’s. So they kept it going and now there is no way out anymore.” So, there is no avoiding a depression? Nenner says, “Yep, and it is going to be very bad.”

- Source, USA Watchdog

Oil Prices Still Collapsing: Saudi Arabia & Russia Go for the Knock Out On US Shale Oil?

Oil futures have crashed (again!) after being open for only a few hours of trading! Oil futures have dropped more than $10/barrel already just tonight with oil prices down around 30% since the first week of January 2020. 

Goldman Sachs is even predicting that oil prices may go into the low to mid 20s before the oil bear market is over. A lot of this is because of how oil, gasoline and jet fuel demand has collapsed in China.

- Source, Wall St for Main St

Convulsion Economics: We Are Entering Into Economic Tribulation Times

Filmmaker, book author and renowned radio host Steve Quayle says, “So, now we are seeing an economic morass, upheaval and tumult. 

The best term to describe that is convulsion economics, or another word I made up, ‘convulsinomics.’ When someone goes into convulsions, it is something that is beyond their control. 

There are involuntary responses taking place. We have economics in convulsion. There is no true price discovery. There are only manipulations. 

The ‘D’ word, debt and the basis of debt, and debt and death go hand in hand. The reckless abandonment of all the world now, it’s seriously just print, print, print, print, print. 

This is why the metals (gold and silver) will explode.” What should people do? 

- Source, USA Watchdog

Ron Paul: The Straw That Broke The Fed's Back

Close observers of the un-constitutional and immoral Federal Reserve realize that there is trouble in the central planners paradise. 

As happens with all attempts at trying to micromanage the world, the point is finally reached where the micromanagers are completely overwhelmed by problems of their own making. 

When the final story of The Fed is written, it will be no different than the unnecessary and foolish central planning schemes of the past.

- Source, Ron Paul

Gold climbs, equities slide, and fed cuts rates

Volatility runs rampant through the equities markets as the fears of the Coronavirus continue to grow in regards to supply chain disruption. 

Not even the FED's rate cut could calm the equities sector. Gold climbs as the gold silver ratio moves into historic territory. 

We cover the price movements of gold, silver, platinum, palladium, the US Dollar index, DOW transports, and more in this week's show.

- Source, Golden Rule Radio