Yesterday, the Dow gave up a 500-point gain to end the day up 10 points.
The NASDAQ also reversed a nearly 2 percent spike, hitting a new record, before closing down more than 2 percent.
Today, on the “good news” that Wells Fargo shares tumbled 8 percent after posting a $2.4 billion loss, Delta posted a second-quarter loss of $5.7 billion, and California, a state of 40 million and with a population larger
than most nations, was basically locked down again by its Governor… yet, the Dow rose 556 points.
Again and again, over and over, the unprecedented monetary methadone injections by the Federal Reserve and Washington that have boosted Wall Street have nothing to do with the reality on Main Street.
Indeed, just yesterday, the Fed announced it was increasing its balance sheet from $4.2 trillion in February to $7 trillion, promising unlimited financial asset purchases to keep pumping up the overvalued equity markets.
Making a bad situation worse, the U.S. economy, already in decline, will sink deeper into the “Greatest Depression” as governors in 21 states are either locking down again or holding back on reopenings.
With a nation gripped in COVID Fear, the restaurant, travel, and hospitality sectors will continue to slump, putting tens of millions out of work and millions out of business.
And, our forecast – which we made in early March, long before the trend began and the business media realized – for collapsing commercial and residential real estate in large cities will be another key factor in
pushing economic growth sharply lower.
*On the Gold Front*
In complete contradiction of the equity markets rising today, on what Wall Street attributed to a decline in virus cases in Florida and California, CNBC said “Gold prices firmed above the key $1,800 level on Tuesday,
underpinned by concerns over mounting coronavirus cases globally as many regions reintroduced curbs to restrict the outbreak.”
“Restrict the outbreak” means to further shut down the already sinking economy.
So, on one hand, according to the business media, shutting down the economy is good for gold prices and positive for business growth?
Of course it makes no sense, and again, neither does the rise in equity prices.
By the facts, the Fed and central banks are rigging the markets by pumping in trillions to prop them up.
We maintain our forecast for gold prices to spike to $2,000 per ounce possibly by year’s end. And, when gold breaks past that level, we forecast a silver price spike will follow, pushing silver into the $30-$40 per ounce
range.
