The streets are empty.
From Manhattan to Malibu, it’s Ghost Town U.S.A.
No neon lights are shining bright on Broadway.
Theme parks and movie theaters are closed across the country.
No foreign tourists.
Restaurants and retail shops barely doing business.
Hotels going bust.
It comes as no surprise and was long forecasted: “When people lose everything and have nothing left of lose, they lose it.” Along with unemployment, crime is rapidly rising.
Yesterday morning, hundreds took the streets in Chicago’s “Magnificent Mile,” smashing windows and looting stores in protest of a police shooting.
In response, city “officials” restricted access to downtown Chicago, raised bridges over the Chicago River, suspended CTA service and ordered street closures from Monday morning until this morning.
Once again, ignoring the hard data and true facts, equities keep rising.
Why?
According to CNBC, “The S&P 500 rose on Tuesday, putting it on the cusp of a fresh all-time high amid a rotation out of technology shares and into stocks that would benefit from a reopening of the economy and a vaccine, such as cruise lines and airlines.”
The Dow spiked more than 300 points. But by the end of the trading day, it fell 104 points, snapping a seven-day winning streak.
TREND FORECAST: The global economy has been devastated by the politically imposed lockdowns – draconian measures unprecedented in modern history.
Yes, when a vaccine comes out, people will feel more confident – traveling more, taking a sea cruise, going out to eat, shopping etc. – but it will not bring back lost revenue and jobs… and, as a result of the financial devastation caused by the lockdowns, the economy will not return to pre-COVID levels.
In fact, while it will grow from time to time as a result of the flood of cheap money being poured into the economy by the Federal Reserve and Washington, we maintain our forecast that the “Greatest Depression” has begun.
On the fictional business news that happy days are here again because Washington will pump more cheap “stimulus” money into the failing system to prop it up, despite the dollar weakening, gold and silver prices plunged.
Gold fell 5.58 percent, closing at $1,906.20 and silver fell -3.84 percent, closing at $21.74.
TREND FORECAST: Last week, gold was trading will above $2,000 per ounce and silver closing in on $30 per ounce. Considering today’s sharp selloff of both precious metals, short term, there is a downside risk for each.
The next week of trading will provide essential data needed to forecast downside risks for both gold and silver.
It should be noted that gold has risen by a third this year, driven by the economic shutdown, cheap dollars flooding the world, $20 trillion dollars’ worth of governments’ stimulus programs based on debt, and low bond yields.
The benchmark U.S. treasury bond now yields about 0.5 percent while many countries’ central banks are holding interest rates below zero.
In July, investors poured $7.4 billion into exchange-traded gold funds, adding to the record $40 billion they put into the funds during the first half of this year, according to the World Gold Council.
Thus, the fundaments of the economy, as perceived my many, are not sound. Indeed, silver prices have gone up some 37 percent since we called its upward trend in June.
Again, the next several days will prove crucial in forecasting the downside risks of both gold and silver.
U.S. Federal Reserve policies have ensured that bond rates will remain low at least through March 2021. That, added to a slow, unsteady economic recovery and investors’ general fears about the future, give gold prices more room to rise.
Prior to today’s sell off, the Bank of America said gold could reach $3,000 by mid-2021.
