SD Friday Wrap: Gold & silver catch a bid as the “markets” begin to price-in the effects of a global pandemic…
Edit: These charts were set-up around approximately 1:30 p.m. EST on Friday, January 24th
We discussed the Wuhan Virus (coronavirus) at length in today’s Silver Doctors Live:
Or, shall I say, “black swan”?
If the coronavirus is just the typical run-of-the-mill seasonal influenza, then it is serving as a distraction.
But from what?
How about a million or more Iraqis taking to the streets of Baghdad today demanding that the U.S. leave?
Of course, the MSM spins it as thousands:
Thousands they say!
Remember that number for later.
The article (linked above) then shows a picture of what looks like many multiples of “thousands”:
Kinda seems like “the voice of the Iraqi people”, does it not?
Remember what it kinda seems like for later.
Assuming the pic and the info about the pic are real, that’s way more than just “thousands”.
Especially looking at some aerial video footage of the demonstration:
This is the absolutely enormous rally in Iraq’s capital Baghdad today, where more than 1 MILLION protesters demanded an end to the US military occupation of their country
Iraq’s parliament voted 170-0 to expel US troops. Trump refused to listen. Now the people are in the streets pic.twitter.com/FDnHQrmCTu
— Ben Norton (@BenjaminNorton) January 24, 2020
Which does kinda make it seems like there’s a “Million Iraqi March” going on.
If this coronavirus is really no big deal, then, in my opinion, it is serving as a distraction from the Middle East.
The Middle East is quite the pickle.
There’s the bloody hand that the Deep State would like dead-n-buried.
Figuratively, of course, and the story from the MSM, that is.
And the Deep State is failing to spark anything in Iran even though it’s “the voice of the Iranian people”:
The voice of the Iranian people is clear. They are fed up with the regime’s lies, corruption, ineptitude, and brutality of the IRGC under @khamenei_ir‘s kleptocracy. We stand with the Iranian people who deserve a better future. pic.twitter.com/tBOjv9XsIG
— Secretary Pompeo (@SecPompeo) January 11, 2020
If the coronavirus is no big deal, but rather, a distraction, I think it’s because something’s about to go seriously wrong in the Middle East.
If, however, the threat of a global pandemic is real, the markets are not prepared for it.
The markets, especially the US stock market at record highs, is priced for nothing but unicorns and rainbows as far as the eye can see.
Just a few random thoughts on the Wuhan Virus and how it relates to the economy follow.
If travel declines, or if people stop going to the movie theater, sporting events or even perhaps to the mall, then economic activity will indeed be negatively impacted.
What happens when economic activity is negatively impacted?
There is a general slowdown, and that slow-down can lead to layoffs and store closures.
And if there are more layoffs and store closures coming than those that are already happening, what does that say about corporate earnings and equity valuations?
See where I’m going with this?
I know there are so many questions in today’s wrap, but it’s important to think about it this way, because, whether the virus outbreak is short-lived or not, there is no denying this cannot be good for the economy.
In the simplest of terms, what we are talking about is the diversion of resources from one area to another, and those resources are not being diverted for the production of some new good or service that benefits people, but rather, resources are diverted to treat the sick and dying with the hopes of only getting them back to healthy again.
Here’s a way to think about it: If a person has a house fire, and he or she has to spend some money tearing down the burned areas in order to rebuild again, and then rebuilds the house to the way it was before the fire, in the end, the house is really only back to where it already was.
Will some areas benefit?
Sure – the medical industrial complex benefits, but would that benefit be enough to offset the detriment to other areas of the economy?
See what I mean?
So many questions, and that means?
It means so many unknowns.
There is an overall point here: If I’m smart enough to think some of the implications through, others are as well, and they’re taking action by moving into gold & silver.
One final question, food for thought.
Why would people be moving into gold & silver?
For many reasons, including, but not limited to, and in no particular order:
- A hedge against uncertainty in the markets and/or the economy.
- A hedge against a stock market the could come crashing down as the global economy enters recession/depression.
- A hedge against currency debasement as efforts to combat the Wuhan Virus in indebted nations such as the United States will be inflationary in nature, brought on by the issuance of even more debt.
- If things get really bad, gold & silver can be used for barter and/or be used as a bribe or pay-out.
There are other reasons, and there are so many things to consider with regards to the Wuhan Virus and the effect on the markets and the economy, so please do watch today’s Silver Doctors Live if you have not already if this concerns you, or if you are just now trying to figure out what the heck all the fuss is about!
If the risk for global pandemic is real, then the fuss has only begun!
If gold & silver are starting their next legs up, the window of opportunity to score free ounces of gold will begin closing:
Since the cartel wanted, initially, to strong-arm gold & silver this week and next, the gold-to-silver ratio popping above 88 like it did is an absolute gift!
The fundamentals are simply too strong for the cartel right now:
Gold is showing amazing support at $1550, and we may be ready for our next leg-up.
I think we are.
Check-out silver breaking-out above $18:
I think silver’s about to go crazy here any day now, and when I say “crazy”, I mean with an upside surprise that will surprise even the people looking for a upside surprise!
With gold already bid, and with silver to follow gold, deeper-pocketed investors will look at platinum:
Remember: When buying real, physical metal, such as an ounce of platinum, that’s not a call option that can expire worthless because of making a miscalculation in the rigged casino, so that ounce could never go to zero, like what generally happens when buying call options, and with all the debt, negative interest rates, and currency debasement taking place by governments and central banks around the world, in conjunction with the fact that platinum is traditionally more expensive than gold, in part because it is some ten times more scarce than gold, it is safe to say that entering physical platinum here has very little downside.
With palladium, those “long and strong” will certainly have to be going in with a “buy and hold” mentality:
At one point we’re going to get a scary pullback, unless, of course, the cartel is losing control.
If the cartel is losing control, um, yeah.
There’s a reason we keep saying you have to have your position before the move, because before is when owning just a little goes such a long way!
What if silver blows-through $50 and immediately takes out $100, only to be at $500 in days?
I don’t think that’s far-fetched.
In fact, I’m expecting it to happen, in part because if this coronavirus threat is real, then the fundamentals are about to start mattering again, big time.
If the fundamentals are kicking-in, copper’s not going to stay down for long:
Sure, it’s scary plunging all week and through the 200-day moving average like that, but I don’t think it lasts, especially if brewing pandemic fears act to jump-start the crack-up boom in the economy.
Speaking of plunging all week long, crude oil has totally priced-out the Middle East escalation:
Has the situation in the Middle East de-escalated?
This is one scary bearish-engulfing candle on the Dow’s daily chart:
We’ll know soon enough whether the Fed can keep it going forever, and in the near-term, we’re ripe for at least a nasty plunge.
The third time could certainly be a charm for another round of VIX-pocalypse:
The timing is uncanny, is it not?
Just as the Fed cannot ever normalize interest rates, yield on the 10-Year Note can never go up incrementally:
Bond market yields will be forced lower and lower until the bond market blows, and now, with the Wuhan Virus pandemic scare, the Deep State has the perfect cover to force bond yields lower via Exchange Stabilization Fund brute force, all the while shaping the narrative of the bond market “safe haven” bid.
The US was one of the first non-China nations to confirm a domestic case of Wuhan Coronavirus infection, and the dollar soars:
The “market participants” are about to find out just how much funny money the US government is about to pump out, because, unlike a localized “natural disaster”, this Wuhan Virus is a “national disaster”, which can, and will, get very expensive to deal with, assuming the pandemic threat is real.
What’s the bottom line as we find ourselves here this beautiful Friday in late January?
Last year, we saw what can happen to prices when market “fundamentals” kick-in.
If the fundamentals are kicking in for gold & silver, we’re ready for a move-up.
So far, the MSM has been focused on the Trump Impeachment Circus.
Everybody’s looking for a “speedy acquittal”, and then what?
The MSM could focus on Wuhan as the next big thing.
By spreading fear, they can damage Main Street.
By damaging Main Street, they damage?
Well, if you don’t think it’s scripted.
Then they damage Trump.
Either way, the timing?
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.