U.S. share prices slipped on April’s last trading day but registered gains for the month as companies reported strong first-quarter earnings.
Investors’ buoyant mood was tempered by the mainstream media blasting fear and hysteria of rising coronavirus cases in India.
Indeed, last Thursday, CNN, the Cartoon News Network, hyped the India COVID crisis as “a problem for the whole world” and that “the more the virus spreads, the more chances it has to mutate and create variants that could eventually resist current vaccines, threatening to undermine other countries’ progress in containing the pandemic, experts warn.”
Of course, totally absent in what used to be called “news” are the facts and numbers.
Not a word from the little boy-girl Presstitutes that India, with a population 1.391 billion, has recorded 218,000 COVID deaths, for a fatality rate of 0.016 percent. And that’s over 14 months.
But, in the United States, where the Presstitutes cheerlead their lockdown leaders, there have been some 591,000 virus deaths reported from a population of 333 million, for a fatality rate of 0.17 percent.
If the U.S. had the same fatality rate as India, there would only be 52,188 deaths from the virus. If India had the same fatality rate as the U.S. (more than 10x higher), India would have 2,468,712 deaths.
We note this not only to illustrate how small the actual number of deaths is relative to total populations – and yet entire nations have been locked down and hundreds of millions of lives and livelihoods destroyed – but to also note the decline in the equity markets had nothing to do with rising COVID deaths in India!
The overvalued, artificially pumped-up stock markets are ready for a sharp correction.
When will they dive?
When interest rates rise.
And what will force the Federal Reserve to raise rates?
Inflation.
As we have been forecasting, the trillions of dollars of monetary methadone pumped into the system by Washington and the Feds are also pushing inflation higher.
For more on the coming inflation, see Gregory Mannarino’s new article, markets
And, just today, changing the Bankster’s tune about rising interest rates, U.S. Treasury Secretary, and former chair of the Federal Reserve, Janet Yellen, gave the rising rate signal:
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy.”
TREND FORECAST: We maintain our forecast that when interest rates climb to near 2 percent, the markets will crash. As for the housing bubble, that will deflate much sooner, as rates begin to rise. Thus, the higher they rise, the more the bubble will deflate.
Inflation Blues
Ongoing disruptions in supply chains, from product shortages to difficulties in booking firm shipping dates, also have money managers on edge, as these disruptions drive down earnings and add fuel to inflation.
Lumber prices hit new record highs as lumber futures delivery hit $1,575.60 per thousand board feet… four times higher than the average price for this time of the year.
Across the commodity board, prices keep rising. As we go to press, copper, topping $10,000 a metric ton, is near its all-time high. As we have previously noted, copper is often referred to as “Dr. Copper” because it is reputed to have a Ph.D. in economics due to its ability to predict global-economy strength and weakness since it is used in most sectors of industry. Thus, as its price rises, it indicates stronger economic growth… and rising inflation.
As demand for products increases as the COVID War slows down and more states open up, so, too, has the U.S. trade deficit.
Remember the “trade war” B.S. being sold during the Trump administration? Like the rest of America’s wars over the past 74 years, they lost that war, too.
The Commerce Department reported today that the U.S. trade deficit hit a record high in March, swelling to $74.4 billion… up 57.6 percent from the same period a year ago.
And as for the great economic benefits Americans would reap when Bill Clinton and America’s politicians brought China into the World Trade Association and the NAFTA deal with Mexico… the trade deficit with China spiked 22 percent and rose 23.5 percent with Mexico.
Gold/Silver: Both precious metals were up sharply yesterday but retreated back to their month-long trading range. Again, considering our forecasts for rising inflation and a declining dollar, we remain bullish on our forecast for gold to hit $2,100 per ounce this year and silver to break above $50 per ounce.
But, as we have noted, prices won’t climb that high until inflation reality hits, interest rates rise, and the artificial equity markets that have been pumped up with massive doses of monetary methadone dive.
Oil: As for rising inflation, oil prices hit a seven-week high today with Brent Crude closing at nearly $69 per barrel and West Texas Intermediate up 1.94 percent closing at $65.22 per barrel.
With the massive amounts of monetary and fiscal stimulus injected into the economy, plus summer on the horizon and more nations re-opening up from the COVID lockdowns, we forecast Brent Crude will move beyond $80 per barrel.
Bitcoin: Where are the cryptocurrencies going? As long as big and small market speculators stay in the game, the higher the prices will go. No better proof than Dogecoin, which started as a joke in 2013 and surged 30 percent to a record high of 50 cents today.
Bitcoin is still trading in the mid $50K range while Ethereum hit new highs.
Again, the highly speculative crypto market sector will continue to have sharp up-and-down fluctuations, and an array of coins will steadily rise until, or if, governments and central banks restrict their trading.
