Ready for the “Biden Bounce,” which will push equity markets higher and rapidly boost economic growth?
According to the mainstream media and their “experts,” it’s coming soon.
Pick up any newspaper. Tune into any broadcast media. Search the news online. Read the headlines. It’s all about the COVID Vaccination Campaign.
The storyline is the same: Not enough, need more, once enough people get the shot, the global economy will rebound.
Then there’s the marketing campaign.
From Anheuser-Bush saying it won’t pump Budweiser beer on Super Bowl Sunday, the first time in 38 years, and instead, it will redirect the money to promote the COVID Jab… to one story after another about all the companies, big and small, pushing their employees to get the vax shot in the arm.
What’s going on? How can the markets keep going up as the world economies go down?
Read Gregory Mannarino’s new article, “ENTER THE NEW PARADIGM,” on why equities are going up, what will bring them down… and what it means to investors.
Today, on the “uplifting” news that some 90 million people are expected to enter extreme poverty this year, the International Monetary Fund (IMF) raised its forecast for global economic growth… with the hedge that there is still “extraordinary uncertainty” about the outlook.
And what will bring about a sunny recovery?
Guess!
That’s right. A shot in the arm. “Much now depends on the outcome of this race between a mutating virus and vaccines to end the pandemic,” declared IMF chief economist Gita Gopinath.
Pushing for governments to make sure the COVID vaccinations are available globally, she said, “The new virus strains have made abundantly clear that the pandemic is not over until it’s over everywhere.”
And, of course, what also will salvage crashing economies, according to the IMF, will be the “New Paradigm,” i.e., building higher mountains of debt with cheap money… or, as Ms. Gopinath brightly colors it, “The ability of policies to provide effective support until that happens.”
The IMF projects global growth at 5.5 percent for 2021, up from a 3.5 percent decline in 2020, the worst peacetime contraction since the Great Depression. With high vaccination hopes, the agency projects a 4.2 percent growth in 2022.
The IMF expects U.S. growth of 5.1 percent for 2021; Europe up 4.2 percent; the U.K up 4.5 percent… and China, the big winner, up 8.1 percent.
Overall, they estimate the COVID War will cost the global economy $22 trillion over 2020-2025 relative to pre-war projected levels.
TRENDPOST: Throughout the year, as they frequently do, the IMF, along with other agencies, adjust their forecasts. As we have forecast, yes, there will be a strong economic bounce-back following the mass vaccinations and re-opening of locked-down economies.
But what has been lost is lost. With projections for $22 trillion to disappear in the next four years, the implications on economies, industries, businesses, and individuals will prove catastrophic.
Overall, the Bigs will get bigger; the rich, richer; and the middle class and small businesses smaller.
As for the equity markets, how can they keep going up with the world’s economies going down?
It’s a gambler’s casino. Facts and data don’t count; making money does. It’s a money junkie’s game and, as addicts do, they will rob, steal, and lie to keep on getting high.
When will they crash?
We forecast a market correction is coming. The fake enthusiasm of Joe Biden becoming the new champion in The Presidential Reality Show® will rapidly dissipate as winter sets in and economies decline.
What will reverse a downward market spike?
With Janet Yellen, the former head of the U.S. Federal Reserve, now the nation’s Treasury Secretary, open spigots of cheap money flowing into the stock markets to artificially prop them up… as they have done repeatedly since the 1987 market crash.
GOLD AND SILVER. We maintain our forecast for gold to spike above $2,100 an ounce and silver to pass $50 per ounce in 2021. More cheap money pumped into the system will lower the value of the U.S. dollar, which, in turn, will push higher the demand for precious metals.
Of course, this trend can be temporarily disrupted should Banksters such as JPMorgan Chase, which was fined $900 million last year for rigging precious metals markets, keep rigging them to drive the prices down.
Indeed, it is not in the Banksters’ best interests for investors to abandon gambling casinos, i.e., Wall Street, and put their money in safe-haven assets from which they cannot generate profit.
OIL. Oil prices remained in their mid-$50 per barrel range as reports from tanker tracker Petro-Logistics said there is 85 percent compliance among the OPEC+ countries to curb output.
Despite the sagging economy and decline in global demand, prices also held steady on news of an explosion in Saudi Arabia’s capital Riyadh today.
Reuters reported that a small plume of smoke rose above the capital and
Saudi-owned Al Arabiya TV cited local reports of an explosion. Videos circulated on social media purporting to show a missile being intercepted over Riyadh.
TREND FORECAST: As we have been warning, should military tensions escalate in the Middle East, Brent Crude may well spike above $80 bbl, which, in turn, will crash equity markets, push precious metals higher, and rapidly push economies deeper into the “Greatest Depression.”
BITCOIN. Hovering in the $32,000 range, bitcoin is down $4,000 since last week. With pressure building from central banks to regulate it, the downside risk remains.
Indeed, as we reported, European Central Bank head Christine Lagarde has called for international bitcoin regulation earlier this month saying bitcoin is “a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity.”
Citing unspecified investigations in alleging the currency’s illegal uses, she said, “There has to be regulation. This has to be applied and agreed upon at a global level because if there is an escape, that escape will be used.”
Considering the central bank pressure, there is a strong downside risk. Thus, we maintain our 5 January forecast for bitcoin: “The downward breakout point will be hit should prices fall below $25,000 per coin.”
On the upside, should bitcoin again break past $41,000 into the $42,000 per coin range, we forecast it will spike above $50,000 per coin.
TRENDPOST: More and more, central banks are developing their own digital money. The move to regulate Bitcoin is, in part, a move to limit the private market’s competition with nationally endorsed cryptocurrencies.
