Bonner: Coronavirus Fears Spark Gold Shortages
Bonner: Coronavirus Fears Spark Gold Shortages by Bill Bonner for Money and Markets
While much of the rest of the world is at war with the virus, old friend Byron King notes that we are fighting a guerre du luxe down here in the valley… happily isolated from the enemy while enjoying the wonders of nature.
We begin by noticing that this is a drôle de guerre.
In the trenches opposite us is said to be a savage killer. It’s a virus with a Facebook page, a Twitter account, and a PR firm. It’s gotten more press… and more eyeballs… than any ailment ever visited on the human race.
If it were a stock, it would be overexposed… overpriced… and overhyped. We would sell it short.
We also note that different countries are using different strategies to fight the invasion.
Here in Argentina, as in the U.S., the feds have gone into Total War mode… To the barricades!… locking down the economy to prevent the bug’s advance.
Sweden and Japan, on the other hand, have their defenses up… but life goes on, more or less, normally.
The 10 million-strong Swedish population looks no more immune to it than its neighbors: Sweden has 2,510 cases and 42 deaths, according to data compiled by Bloomberg, compared with 2,916 cases and 12 deaths in Norway and 2,014 cases and 34 deaths in Denmark.
Yet the Danes have shut schools and many businesses, banned large gatherings, and handed the government sweeping emergency powers; Sweden has gone down a more laissez-faire route. Schools, bars and cafes are still open. Social distancing is recommended, but only those aged over 70 or otherwise at risk are asked to stay home.
What to make of it? Is a lockdown necessary?
Does it do more harm than good? Or does it merely provide an excuse for doing things that the feds wanted to do anyway?
News Flash: Bull Market or Depression?
Meanwhile, a news flash from The Wall Street Journal:
Dow Escapes Bear Market With a 6% Rally
The blue-chip index is now up 20% from its low, qualifying as a new bull market. U.S. stocks soared higher Thursday, even after data showed the ranks of unemployed Americans surged in the past week, signaling that investors remain hopeful that a $2 trillion stimulus package can help save the country’s weakening economy.
But wait… New unemployment claims for the week ending on March 21 were staggering – more than 3 million, or four times higher than the previous record set 38 years ago!
And the number of novel coronavirus cases in the U.S. now surpasses those in China.
Hmm… The stock market is off to the races. Wait again… Darn! The Dow is down again… almost 1,000 points down as we write.
Which is it? Up or down? Bull market… or depression?
The best answer is “both.” Fire and ice. Fever and chills. The heat of war… and the cold mud of the grave.
But you have to look at stocks in terms of gold in order to see what is really going on…
Gold: Not Always Even, But Never Far Off for Long
Investors in the ’70s had the impression that they were not making money, but not losing it either. The Dow began the decade more or less where it ended it. In the 800s.
And yet, in real terms… after an adjustment for inflation… investors had lost more than 90% of their money.