Uncharted waters

Back on March 16, a report by Imperial College London forecast 2.2 million Americans would die from the coronavirus and that 81% of the U.S. population would be infected.  Consequently, Trump and his team of experts, namely Dr. Anthony Fauci and Dr. Deborah Birx, began holding daily press conferences and quickly scared the daylights out of the American public.

Think about it: 2.2 million Americans were facing death.  Who wouldn’t be afraid?

At first, few questioned the death projections, despite being authored by Neil Ferguson, who had previously greatly overestimated the death rates for other diseases: mad cow disease, bird flu, and swine flu.  No other epidemiologists were asked to comment.  Fauci and Birx became household names.

In April, President Trump signed into law a bill that called for $2.35 trillion to be spent to head off the economic collapse as unemployment climbed.  Then, in stepped the Federal Reserve with measures that added an additional $4 trillion.  All told, more than $6 trillion has been committed to arrest the economic downturn caused by the government’s reaction to the pandemic.

Never to let a crisis go to waste, last week Nancy Pelosi rammed a bill through the House that called for an additional $3 trillion in spending.  While the Senate is unlikely to pass the bill as it is written, if the economy does do not respond fast enough some form of Pelosi’s bill will pass.

But, it doesn’t stop with the U.S.  Across the world central banks are creating massive amounts of money.  In Europe, some €2 trillion or so has been earmarked to keep businesses from bankruptcies, such as bakeries, bookshops, and other small firms.  Now, though, Europe is turning to the corporate titans.

France announced an €8 billion package to support its carmakers, including a large loan to Renault, which recently announced it was laying off 15,000 employees. Lufthansa is negotiating a €9 billion bail-out from Germany. The taps are open, and more blue-chip bailouts are expected.

There is no end in sight to the Fed’s money printing, especially in an election year, which makes this an excellent time to get in gold and silver.  Although silver is lagging, gold is within 9% of its all-time high.  Yet it is rarely discussed on the financial news channels.

Fact is, the metals are completely ignored, not by just the news media but also by gold bugs.  Although there was heavy buying at CMI in March and early April, recently the calls have slowed.  In the past when the metals have been ignored, that has been a good time to buy.