We’re approaching all-out market mania with optimism about a COVID vaccine and the ensuing economic renaissance that many seem convinced is right around the corner. On Tuesday (Nov. 24) the Dow Jones closed about 30,000 for the first time.
On his podcast, Peter Schiff talked about the big stock market rally. He said it’s not really about the presidential election, or the COVID vaccine, or excitement about Joe Biden. The rally is all about the Federal Reserve. And it always has been.
When governments started locking down the economy in response to coronavirus, the Federal Reserve sprung into action. First, it slashed interest rates to zero. Then it quickly launched what we’ve dubbed QE infinity. In effect, that meant printing trillions of dollars out of thin air and pumping them into the economy.
Meanwhile, the US government did its part, passing a massive stimulus bill – pumping trillions of dollars of borrowed money into the economy. Of course, the Fed monetized a big chunk of that debt via QE infinity. So, in effect, the federal government joined forces with the central bank to pump trillions of dollars out of thin air into the economy.
The stock market continues to climb on coronavirus vaccine hopes. But why should it? After all, it didn’t sell off because of the pandemic. It’s at record levels despite COVID-19. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey explains why this really isn’t about a vaccine. He also talks about one of the pernicious effects of this super-loose monetary policy – the theft of our savings.
Demand for investment silver is projected to come in at 236.8 million ounces in 2020. That would mark a 5-year high.
Stocks continue to surge upward thanks to optimism about a coronavirus vaccine. Of course, stocks have been on a bull run ever since their big March drop at the beginning of the pandemic. This led Peter Schiff asks a poignant question during his podcast: if COVID-19 didn’t hurt the stock market, why should a vaccine help?
We have argued that the Federal Reserve has no exit strategy from this extraordinary monetary policy. In fact, it never could extricate itself from the extraordinary monetary policy it launched during the Great Recession. Today, we’re merely witnessing the same policy on hyperdrive. And there is still no way out.
While the markets were giddy about the prospects of a coronavirus vaccine, the Federal Reserve was warning of more economic chaos on the horizon.
The Fed released its biannual Financial Stability Report Monday. The report warned we could see a wave of defaults and “significant declines” in asset prices in the near future.
It looks like Joe Biden will ultimately win the presidential election, although it will likely be weeks before all of the official votes are in and the legal wrangling could go on even longer. One thing that is clear is that the polls were horribly wrong. They were projecting a Biden landslide. If Trump did lose, it was barely.
In his podcast, Peter Schiff offered some post-election analysis and said investors are as clueless as the pollsters.
More bad news for the labor market.
Nearly 1-in-10 companies are planning layoffs in the next three months. That’s on top of the more than a quarter of US companies that have already let workers go in Q4.