Several years ago, when conventional wisdom dictated that to push inflation higher and jumpstart lethargic economies, central banks have to push rates so low as to make saving punitive and force consumers to go out and spend their hard-earned savings, several central banks including the ECB, SNB and BOJ crossed into the monetary twilight zone by lowering overnight rates negative.
Even though most U.S. states have begun the process of “reopening” their economies, the unprecedented tsunami of job losses that we have been experiencing just continues to roll on. On Thursday, we learned that another 2.4 million Americans filed initial claims for unemployment benefits during the previous week, and that brings the grand total for this pandemic to a whopping 38.6 million.
On March 23 - the day the S&P dropped to its cycle low of 2,237 - the Fed stunned capital markets when it announced it would purchase investment-grade corporate bonds, traversing a Rubicon into a secondary market intervention that not even Ben Bernanke had dared to cross. A few weeks later, on April 9, the Fed doubled down by announcing it would purchase not only junk bonds from "fallen angel" issuers (an announcement which came just days after a quarter in which a record $150BN in investment-grade bonds were downgraded to junk, starting the long-awaited tsunami of "fallen angels"), but would also buy junk bond ETFs such as HYG and JNK.
The markets WANT UP. We got our final chance (probably) to LOAD UP on our round 2 list last week and the returns are ALREADY ASTRONOMICAL. Several of the mentioned companies came within range and have BOUNCED HARD. Treat them as either short-term trades or long-term holdings – all of them are up over 10% already!
Amir Adnani, the Chairman of GoldMining Inc. did a fascinating interview with SGT Report. Adnani says, "WW2 remains the most expensive war ever fought, the total cost was combined six trillion dollars US dollars adjusted for inflation. The stimulus committed by central bankers in 2020.... exceeds the total cost of WW2."
COVID-19 has turned all of our lives upside down, and most people are quite eager for a return to normalcy. But as you will see below, fear of the coronavirus is going to prevent the vast majority of Americans from immediately resuming all of their normal daily activities once the coronavirus restrictions have been lifted.
"The nature of a 'black swan' is that it's an asynchronous event that you don't see...I needed to make myself...anti-fragile," said Rick Rule an investor. He says he was prepared for 2008 and for this "everything bubble" bursting in 2020. But he also wants us to look at the real problem: the government's addiction to power.