A Top Trend for 2021, the “Greatest Depression” has begun. It is in front of everyone’s eyes, but most can’t see it.
With the tech world thriving and equity markets brightly shining, most are blinded from seeing the devastation on Main Street.
Name the business, name the country. Since politicians launched the COVID War, the richest got richer and the biggest businesses got bigger as the John Does and Mom & Pops got poorer and weaker.
And who benefits? No greater proof from the sky-high equity markets, of which the 1 percent owns some 52 percent and the top 10 percent owns 88 percent in total, leaving peanuts for the plantation workers of Slavelandia.
Yes, the “Greatest Depression” has begun. But while most will feel it in theie pocketbooks and hearts, politicians and Presstitutes will keep selling Slavelandians the line that “Happy Days are Here Again”… and it will keep getting happier.
NEVER, in modern history, have governments taken such draconian measures across much of the world to instantly shut down commerce as they did when they launched the COVID War this past winter.
And, as with their other wars that have no exist strategy and cause massive carnage, NEVER was heard a discouraging word… and the skies are not cloudy all day.
Remember? It was going to be a “V”-shaped recovery, then a “U” shape, then a “K” shape… and now a “COVID-Vaccine” recovery: “Stocks rise to fresh record highs as Pfizer begins UK vaccine rollout,” was today’s CNBC headline.
Yes, the markets are up as nations, states, and cities re-lock down Main Street. Despite entire sectors being prohibited to do business as usual – or no business at all – and some 10 million fewer U.S. jobs than before the COVID War began, equites keep flying high. Today, the Dow closed up 104 points, hitting a record high, and the S&P 500 closed above 3,700 for the first time.
GOLD & SILVER. Also boosting equity markets is the realization that Washington and the Banksters will keep pumping in more monetary methadone to artificially inflate deflating economies. Indeed, with more cheap money on the horizon, which will push the sagging dollar lower, gold prices continue to snap back from their recent lows, closing today at $1,874 per ounce.
Silver was stagnant today but still trading around $25 per ounce, up some $10 when we had forecast its rise in mid-June. We maintain our forecast for gold and silver to continue to rise in 2021.
Dollar Down
After trading at a low of 90.48 on 4 December, the dollar’s value edged up to close at 90.81 and 90.86 on Monday this week, against a collection of six other major currencies.
After marking a high of 102 in March, the dollar’s value relative to the six currencies is hovering near its 32-month low, losing 6 percent so far this year and about 1.2 percent since 29 November alone.
Last week, the Swiss franc climbed to its highest value against the dollar in almost six years. The euro topped $1.21, it’s best showing against the dollar in 30 months. Britain’s pound set a 2020 high at $1.35.
The buck also lost ground against Russia’s ruble and the Brazilian real.
The dollar was seen as a safe place to store value as the pandemic and economic shutdown roiled the global economy.
But China’s booming stock market and high-yield bond market, the prospect of Congress pouring additional bailout funds into the economy, and the U.S. Federal Reserve’s pledge to keep interest rates low for at least another year have given investors confidence to seek riskier venues offering higher returns.
Also, the promise of vaccines foretell a stronger global economy that will lure investments away from the safer dollar into higher-risk, higher-return venues, analysts predict.
We forecast a continuing dollar decline as more cheap money is pumped into the failing economic system, pushing it down as much as 20 percent next year.
BITCOIN. For millennials, Generation Z, and some big-time speculators, their new safe-haven asset, Bitcoin, while down from recent highs of just under $20,000, is trading around $18,500 per coin as we go to press… up some 50 percent since we had forecast its rise.
TREND FORECAST: We reiterate our 27 June 2020 forecast, when Bitcoin was trading at $8,974, that it would spike higher when it solidly broke above the $10,000 mark.
We also maintain our forecast that Bitcoin prices will continue to rise as governments, particularly China, go digital.
We also maintain our 27 October forecast:
Bitcoin will continue to rise, surpassing its all-time high. As the “Greatest Depression” worsens, more cheap money will be pumped into failing economies, thus pushing the value of currencies down… and inflation higher.
The lower currencies fall and the higher inflation rises, the greater the demand for safer-haven assets such as precious metals and Bitcoin.
OIL. Oil prices moved lower today as more states and nations imposed lockdowns for the Christmas holiday. While prices moved up recently, over Thanksgiving, U.S. gasoline prices dropped 8.4 percent, falling to its lowest level in 20 years. With holiday lockdowns in place, there are forecasts such as those from IHS Markit that demand will fall to numbers not witnessed since the 20th century.
OPEC+ Cuts Oil Deal
The Organization of Petroleum Exporting Countries (OPEC) and Russia have agreed to raise oil production by 500,000 barrels a day, starting in January, despite a world oil market that remains weak.
In April, the group cut production by 9.7 million barrels a day, then adjusted the number to 7.7 million. The limit was to fall to 2.2 million next month.
Saudi Arabia pushed to extend the 7.7-million-barrel reduction through March; Russia wanted to stay with January’s planned hike. The 500,000-barrel amount was a compromise.
The United Arab Emirates pressed for stricter production limits on OPEC members that had not cut production as much as they had pledged.
Although Chinese and, to a lesser extent, western countries’ factory production is rising, air travel, cruise ship joyrides, and land transport are still lagging, weighing down a market already unable to readily absorb all the oil available.
The round of shutdowns and stay-at-home orders across Europe and U.S. amid a new wave of COVID infections also frustrated producers’ plans to pump more oil.
The price of benchmark Brent crude oil has risen from the high $30 range into the mid- to upper $40s in recent weeks.
TREND FORECAST: Given current market fundamentals, we maintain our forecast for oil prices not to rise much beyond the $50 area in the coming months. The economic recovery remains weak in most of the world, air travel is not expected to resume in a meaningful way for at least a year, and new economic shutdowns will slow economic activity, allowing current oil production to bump into a demand ceiling once again.
Given the economic recovery’s uncertainties, oil could again fall back to $40 or below range. Similarly, the Middle East’s geopolitical uncertainties could spike prices overnight, for example, if Iran attacks Israel in revenge for Israel’s 27 November murder of Iran’s chief nuclear scientist.
