SD Outlook: Things are not getting better on Main Street. They’re getting worse…
The MSM is once again sending mixed messages to start the week.
For example, here’s Bloomberg:
The US has stabilized.
Take that headline for what it’s worth, which isn’t much.
Perhaps in one small way or another, but overwhelmingly, in my opinion, the US is not only far from stabilized, but getting worse.
Well, taking a cue from the mainstream media, let’s focus on just one small part of economic and market stability – since this article is about the economy and markets anyway – the supply chain.
In the United States, we’re seeing that not only are the global supply chain disruptions affecting the markets and the economy, but we’re also now seeing that there are domestic supply chain disruptions making matters worse.
For example, here’s part of the mixed messaging I alluded to in the title of this week’s outlook, from Reuters:
Folks, these are not good developments.
Think about that: The supply chain disruptions have hit the food production and processing systems like a dagger straight to the heart.
I mean, we really don’t want our meat processing workers coming down with Covid-19.
Nor do we want to hear meat industry big wigs talking about meat shortages.
Add those two pieces of supply chain disruption to the third yellow-highlighted text above, and we read that Amazon has just cut off access to online grocery shopping for new users.
Each one of those issues are big on their own, but all three at once?
And I don’t think it’s priced-in.
But here’s the question: Does it even matter?
For the financial markets anyway?
I mean, to Main Street and the ability of you and I to purchase readily available protein in the form of meat, these things matter big time, but for the “markets” and “market participants”, well, at this point, the Fed and the government are going to do whatever the heck they’d like to do with these “markets”, and if anybody has any objection to it, well, so what.
Who cares what the people think.
Only vile corruption ye shall get in these markets and the economy.
OK, “Hey Half Dollar, you’re ranting again with no particular direction, so could you just get on with your point already?”.
Here’s my point: No matter what happens in the “markets” this week, know that the situation on Main Street, you know, the real economy, is getting worse.
Making matters worse are two things: The free government checks that should be hitting people’s bank accounts this week and the damage done to the collective psyche.
Recall that on April 2nd, we reported that Steve Mnuchin said if you have direct deposit on file with the IRS, you will get your stimulus check within two weeks.
Now, everybody knows ‘Ol Half Dollar ain’t no dang mathematician, but I’m pretty sure that it will have been 14 days this Thursday.
Here’s why it matters: If a person is getting this “free money”, well, if they can’t get evicted anyway, or if they simply don’t care, and they know they won’t be able to make they’re care payment three months from now, so who care’s about this month, we could see people bidding-up the prices of actual goods – especially if food isn’t something that readily accessible, especially online, while online shopping for things is still a thing.
Furthermore, this spending of free money on stuff is likely what will happen because I think people are coming to realize that inflation is here, so simply holding dollars or having dollars in a bank account is no smart move at all once those checks hit.
I mean, I spoke to my elderly Dad yesterday, and the stubborn old fella went to McDonald’s to the drive-thru yesterday, and instead of getting their normal 2 for $4 breakfast sandwiches and their senior coffese, they paid $7 for the two breakfast sandwiches.
My dad also told me that particular McDonald’s no longer even has a “dollar menu”.
Now, I don’t know if this is universal across the nation, or just where he is in Florida, but the point is the same – inflation is here and if free money is coming in – people will buy something with it.
Additionally, here’s a random thought that I also don’t think “market participants” understand, and this is my opinion, but just because Trump “reopens America”, that doesn’t mean the economy and Main Street are just going to spring-back to life and pick-up immediately where they left off.
Said differently, just because people are no under lockdown, shutdown, stay-at-home orders, quarantine, or whatever you want to call it, that doesn’t mean people will immediately go out and spend, spend, spend!
This pandemic has certainly screwed-up the collective psyche, and in my opinion, it will take a good while for people to get comfortable among the general public again, especially when it’s not just because of a raging little bugger but also the disruption to society itself whereas now Joe the Plumber is making more than the has-been professional that’s out of a job and no longer in demand because the corrupt, rigged institutions in the US are collapsing.
Furthermore – as the US economy descends into Third World status whilst input costs of the economy increase due to supply chain disruptions on international and domestic levels, with the added burden the coronavirus places on business to, for example, clean and sanitize stores, warehouses, kitchens and whatnots more thoroughly and to a higher standard, well, let’s just say that those daily cappuccino’s at Starbucks are a no-go, Pizza will be something that’s ordered on a special occasions like a birthday, and all of those things we’ve taken for granted since we corrupted the US dollar will all of the sudden be things that are not in the same reach to the US consumer as they once were.
The paper gold to silver ratio has inched back-up again:
In the real world, however, it’s still impossible to straight-up trade an ounce of gold for over 111 ounces of silver.
Silver’s starting out the week in the mid-$15’s:
Sure, we’re setting up to “test the 50-day”, but I still don’t think the charts matter all that much right now.
Gold is beginning the week around $1750:
It doesn’t really feel like gold’s as close as it is to an all-time high, does it?
If it doesn’t, thats because we’re talking about all-time highs in “nominal terms”, meaning that for gold to feel like all-time highs in real terms, the price has to factor in all of the inflation that has taken place since roughly a decade ago.
Would that be a factor of ten?
I don’t know, I’m asking.
Palladium’s run to all time highs sure was exciting in 2019:
In my opinion, however, those types of runs are going to seem like peanuts compared to what’s coming.
They call it a “crack-up boom” for a reason, you know.
I’ve said it before, and I’ll say it before it’s all gone:
Savvy investors who are smart with their money and at the same time are beneficiaries of the free government money may want to look at platinum as an alternative investment.
All of the precious metals, in my opinion, are going to benefit from the “flight to safety” bid, and platinum sure looks interesting here.
Of course, I’m biased, and so while it’s a little more work and a little more waiting, I’d say look to silver for those who want to save their free government funny money in real Constitutional money.
Copper is signaling it’s about to be en vogue again:
You can’t rebuild your infrastructure without a crap ton of copper.
Crude oil, however is the interesting commodity right now:
It’s starting to look like OPEC+ is going to need a bigger cut!
Of course, they’re going to need a bigger cut if higher prices is your goal, such as the goal of President Trump right now.
It would be nice to see the cartel ramp the VIX this week:
After all, it is kind of amusing watching the analysts, experts, pundits and traders flip-flopping on their calls like fish flopping out of water.
Ah, the suspense of the US stock market after a relentless rally:
All last week I kept seeing article titles like, “the free markets are dead”, or “there are no free markets’, as if the same analysts, experts, pundits, and traders flopping like fish out of water had a Come to Market Jesus moment.
Let’s not get it twisted, however – they still refuse to acknowledge there is an active price suppression policy of gold and especially silver engaged upon by governments, central banks and agents of both, commonly called the “cartel”, on a non-stop basis.
It will stop when it blows-up in their faces because no manipulation can last forever, and know that we are very close to that point now.
Furthermore, if you believe that governments and central banks have been actively suppressing gold & silver prices, then once the world re-adjusts to reality, gold & silver will be so much more than just “wealth preservation”, “wealth insurance”, or however you’d like to call it because before the next group of governments and central banks attempt to control gold & silver, prices will need to reflect our newfound reality.
Funny how reality is not something that can be seen in advance, but rather, something that just happens, isn’t it?
If coronavirus has taught the sheeple one thing, it is reality can change at the drop if a pre-1965 dime.
If you have a stake in the US dollar, and if you have access to them:
I’d be looking to get rid of them and to get into real things while the gettin’s good.
Think about it: Sheeple who have saved all of their lives, and trusted our evil, corrupt system with their retirement accounts and their pension plans, along with trusting the banks and the financial markets in general, are going to be financially devastated – their savings are going to literally get wiped-out, a la Venezuela, and they have no idea that it’s going to storm onto the scene with the ferocity of Covid-19.
It will be very similar too, in that governments and central banks will change the rules on-the-fly, many times, essentially freezing the sheeple from getting access to their funds, which quickly vaporize into a financial black hole.
Curiously, they’ll keep walking yields down until the bond market blows-up:
For the sake of all the debtors out there, I hope you bought real stuff with your debts.
Bottom line as we find ourselves here this beautiful Monday in mid-April?
The mainstream is keen on sending us those mixed signals again.
Just understand that Main Street is not getting better at all.
If fact, we’re living the economic collapse right now.
Smart people will thrive in this new reality.
The sheeple will be financially ruined.
And be economically devastated.
Gold, silver and skills matter.
The ability to adapt fast.
To this new reality.
– Half Dollar