While most people generally understand that the stock market and the economy do not move in lockstep, there is still an underlying belief that a strong market reflects a strong economy. But according to that logic, our current economy must be historically strong. If this strikes you as strange, given that we are in the midst of a destabilizing and polarizing pandemic, and a period of political risk that threatens the foundations of the Republic, that’s just because you don’t understand how the fundamental relationship between the stock market and the economy has changed. Believe it or not, strength on Wall Street is now driven by weakness in the broader economy.
Less than two months after reopening, Regal Theaters will shut down all 536 of its locations on Thursday (Oct. 8).
The company said the closures reflect “an increasingly challenging theatrical landscape” due to the coronavirus pandemic. Regal says the closures are temporary, but the company has not set a date to reopen.
The shutdown reflects broader problems in the retail marketplace that have been exacerbated by COVID-19 and stabs another knife in the narrative of a quick economic recovery.
Gold had another precipitous drop on Wednesday (Sept. 23), falling through the support level at $1,900 to a 2-month low. That has led some to ask – is the gold bull dead?
The concern is understandable but I think it’s too early to declare last rites. In order to believe the gold bull run is over, you have to believe the Federal Reserve is actually going to tighten monetary policy and the dollar is going to remain strong.
That seems rather unbelievable.
Can you believe it’s already Labor Day weekend?
In some ways, 2020’s stay has dragged on seemingly forever — like an unwanted aunt visiting “for a while.” But in other ways, 2020 has just flown by. I mean, it’s already fall — although I live in north Florida so it feels like anything but fall.
What is inflation?
When analysts, politicians and pundits talk about inflation, they usually mean rising consumer prices as measured by the consumer price index (CPI). Peter Schiff and Jim Rickards debated this on Kitko news. Rickards also used this definition, insisting there is no inflation right now. Peter said, “Of course there is. The Fed is inflating like crazy.”
The ensuing debate led Peter to address the issue of inflation on his podcast. Peter called the modern mainstream definition of inflation a “false” definition.
Gold and silver had an abysmal day on Tuesday (Aug. 11). The price of gold dropped more than 5%, falling far below the $2,000 level. It was the worst single-day rout in seven years. Things stabilized somewhat on Wednesday with apparent support above $1,900, but the big selloff fueled speculation that the gold bull run could be over.
Here are three questions you should ask yourself before declaring the gold bull dead.
Gold and silver sold off when Russia announced that it had an effective vaccine for coronavirus. This plays into the myth that a cure for COVID-19 will cure the economy. But there is plenty of evidence suggesting the damage to the economy is deep and will likely have long-lasting impacts even when the pandemic is in the rearview mirror.
We’ve reported on a number of these signs. Permanent business closures are rising. Americans owe billions in back rent. There is an increasing number of mortgage delinquencies. There is a rising number of over-leveraged zombie companies. And a tsunami of defaults and bankruptcies are on the horizon.
In fact, bankruptcies are already on track for a 10-year high.
The Federal Reserve serves as the engine that makes all of the US government’s unconstitutional spending possible. Without the Fed, the entire system would collapse.
Just consider this: in March and April of this year, the Federal Reserve effectively monetized 100 percent of the new debt taken on by the U.S. government.
Gold just had its best quarter since 2016 and finished at its highest level in over eight years. But Q2 2020 wasn’t an anomaly. Gold has charted gains for seven consecutive quarters.
That represents the longest quarterly run of gains for the yellow metal since the 2008 financial crisis.