Even as US stock markets rally and people anticipate a quick recovery as economies open up, a tsunami of defaults and evictions looms on the horizon.
The mainstream narrative has been that although the coronavirus shutdowns have rocked the economy, it’s not a financial crisis like we saw in 2008. Back in April, Peter Schiff said that we were absolutely heading toward a financial crisis and it will be worse than 2008.
Gold sold off overnight and stock futures soared after President Trump offered some guidelines to “reopen America.” There was also news of a promising COVID-19 treatment. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey throws a bucket of cold water on all of the optimism. He explains why the economy won’t likely just roar back to life even with an end to the economic lockdown.
A lot of people in the mainstream still insist this isn’t a financial crisis like we saw in 2008. They say this is just a self-inflicted shutdown of the economy. Since we decided to shut it down, we can decide to start it back up again. Peter Schiff begs to differ. In his podcast, he explains that this is absolutely a financial crisis and it’s going to be worse than 2008.
The 11-year bull run is over.
After a rebound on Tuesday based on hopes of government fiscal stimulus, US stock markets plunged again Wednesday and officially moved into bear territory.
With the madness in the markets over the last couple of weeks that led the Federal Reserve to implement a 50-basis point interest rate cut, Peter Schiff is starting to get some love in the mainstream media.
Peter was a regular on MSNBC, Fox News and other mainstream outlets in the months leading up to the 2008 financial crisis. He was typically the lone contrarian, insisting that the economy wasn’t great. Of course, in 2008, he was proved correct.
Peter Schmidt has written extensively about the “Confederacy of Dunces” that helped bring about the financial collapse of 2008 and their “fatal conceit.” By fatal conceit, he means the arrogant belief that because of their superior intellect and education, they have the wherewithal to micromanage the economy.
One of the members of Schmidt’s “confederacy of dunces” is Lawrence Summers. He served as a senior Treasury Department official during the Clinton Administration and was at the center of enormous and easily discernible blunders in judgment that directly led to the crisis. But he has never taken ownership for the role he played and he continues to pontificate about economic issues.
In the following article, Schmidt uses Summers recent comments about one of Pres. Trump’s potential Federal Reserve Board nominees to highlight the fatal conceit of central planners.
The conventional wisdom is that demand for gold and silver has been somewhat tepid over the last couple of years. In fact, global gold demand grew by about 4% in 2018 and was in line with the five-year average. Much of that growth was due to a surged in demand through the fourth quarter as stock markets tanked, and concerns about debt and the global economy grew.
We tend to be pretty short-sighted when we look at market trends. Most investors focus on the day-to-day gyrations. As a result, we often completely miss significant long-term trends. For instance, investment demand for gold and silver has increased dramatically in the decade since the financial crisis.
If you look at past financial and economic crises, what is the common denominator?
That’s why we talk so much about debt on these pages.
Sept. 15 marked the 10-year anniversary of the Lehman Brothers bankruptcy.
Many investors undoubtedly remember that day clearly. But as Jim Rickards pointed out in a recent article at the Daily Reckoning, that day was actually the culmination of a long meltdown. Investors should have seen it coming. In fact, they could have seen it coming had they been paying attention.
So, are we in the midst of a similar slow-motion meltdown today?