The great ‘reset’. Will fiat currencies and economies collapse? Then what?

Key parts of the world’s financial affairs have been hi-jacked by self-serving financial organisations, bureaucracies, country leaders and individuals.   The outlook is dire. 

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Central Banks Driving Gold

Central Banks Driving Gold  By Jim Rickards, for The Daily Reckoning, 2 July 2020

Gold as an asset class is confusing to most investors. Even sophisticated investors are accustomed to hearing gold ridiculed as a “shiny rock” and hearing serious gold analysts mocked as “gold bugs,” “gold nuts” or worse.

As a gold analyst, I grew used to this a long time ago. But, it’s still disconcerting when one realizes the extent to which gold is simply not taken seriously or is treated as a mere commodity no different than soy beans or wheat.

The reasons for this disparaging approach to gold are not difficult to discern. Economic elites and academic economists control the central banks. The central banks control what we now consider “money” (dollars, euros, yen and other major currencies).

Those who control the money supply can indirectly control economies and the destiny of nations simply by deciding when and how much to ease or tighten credit conditions, and when to favour (or disfavour) certain types of lending.

When you ease credit conditions in a difficult environment, you help favored institutions (mainly banks) to survive. If you tighten credit conditions in a difficult environment, you can more or less guarantee that certain companies, banks or even nations will fail.

This power is based on money and the money is controlled by central banks, primarily the Federal Reserve System. However, the money-based power depends on a monopoly on money creation.

As long as investors and institutions are forced into a dollar-based system, then control of the dollar equates to control of those institutions. The minute another form of money competes with the dollar (or euro, etc.) as a store of value and medium of exchange, then the control of the power elites is broken.

This is why the elites disparage and marginalize gold. It’s easy to show why gold is a better form of money, why it’s more reliable than central bank money for preserving wealth, and why it’s a threat to the money-monopoly that the elites depend upon to maintain power.

Not only is gold a superior form of money, it’s also not under the control of any central bank or group of individuals. Yes, miners control new output, but annual output is only about 1.8% of all the above-ground gold in the world.

The value of gold is determined not by new output, but by the above-ground supply, which is 190,000 metric tonnes. Most of that above-ground supply is either owned by central banks and finance ministries (about 34,000 metric tonnes) or is held privately either as jewelry (“wearable wealth”) or bullion (coins and bars).

The floating supply available for day-to-day trading and investment is only a small fraction of the total supply. Gold is valuable and is a powerful form of money, but it’s not under the control of any single institution or group of institutions.

Clearly gold is a threat to the central bank money monopoly. Gold cannot be made to disappear (it’s too valuable), and it would be almost impossible to confiscate (despite persistent rumors to that effect).

If gold is a threat to central bank money and cannot be made to disappear, then it must be discredited. It becomes important for central bankers and academic economists to construct a narrative that’s easily absorbed by everyday investors that says gold is not money.

The narrative goes like this:

There’s not enough gold in the world to support trade and commerce.(That’s false: there’s always enough gold, it’s just a question of price. The same amount of gold supports a larger amount of transactions when the price is raised).

Gold supply cannot expand fast enough to keep up with economic growth.(That’s false: It confuses the official supply with the total supply. Central banks can always expand the official supply by printing money and buying gold from private hands. That expands the money supply and supports economic expansion).

Gold causes financial panics and crashes.(That’s false: There were panics and crashes during the gold standard and panics and crashes since the gold standard ended. Panics and crashes are not caused or cured by gold. They are caused by a loss of confidence in banks, paper money or the economy. There is no correlation between gold and financial panic).

Gold caused and prolonged the Great Depression.(That’s false: Even Milton Friedman and Ben Bernanke have written that the Great Depression was caused by the Fed. During the Great Depression, base money supply could be 250% of the market value of official gold. Actual money supply never exceeded 100% of the gold value. In other words, the Fed could have more than doubled the money supply even with a gold standard. It failed to do so. That’s a Fed failure not a gold failure).

You get the point. There’s a clever narrative about why gold is not money. But, the narrative is false. It’s simply the case that everyday citizens believe what the economists say (usually a bad idea) or don’t know enough economic history to refute the economists (and how could you know the history if they stopped teaching it fifty years ago).

The bottom line is that economists know that gold could be a perfectly usable form of money. The reason they don’t want it is because it dilutes their monopoly power over printed money and therefore reduces their political power over people and nations.

To marginalize gold, they created a phony narrative about why gold doesn’t work as money. Most people were too easily impressed by the narrative or simply didn’t know enough to challenge it. Therefore the narrative wins even if it is false.

If gold is viable as a form of money, what does gold’s recent price trading range combined with fundamental factors tell us about its investment prospects?

Right now, my models are telling me that gold is poised to breakout of its recent narrow trading range.

As always in technical analysis, the term “breakout” can mean sharply higher or sharply lower prices. Using fundamental analysis, a breakout to sharply higher prices is the expected outcome. This may be the last opportunity to buy gold below $2,000 per ounce.

For the past three months, gold has been trading in a range between $1,685 per ounce and $1,790 per ounce (it’s trading at about $1,782 today). For most of those three months gold was trading in a fairly narrow band.

When trading a volatile asset narrows to that extent, it’s a sign that the asset is ready for a material technical breakout. The question is will gold breakout to the upside or downside?

To answer that question, we can turn to fundamental analysis. (Technical analysis is data rich and is useful for spotting patterns, but it has low predictive analytic power).

One of the most important fundamental factors forcing gold higher is shown in Chart 1 below. This shows central bank purchases of gold bullion from 2017 to 2020 (each year is shown as a separate line measured in metric tonnes on the left scale).

Chart 1 – Central Bank purchases of gold
(in metric tonnes) 2017 – 2020

Chart 1 shows significant purchases of gold with 2019 running ahead of 2017 and 2018 at about 500 metric tonnes.

The chart also shows over 150 metric tonnes of gold purchases through April 2020, which puts 2020 on track to show 450 metric tonnes purchased for the year if present trends hold.

Of course, the actual result could be higher or lower. Cumulative central bank purchases from January 2017 to April 2020 are approximately 2,050 metric tonnes.

In fact, central banks went from being net sellers to net buyers of gold in 2010, and that net buying position has persisted ever since. The largest buyers are Russia and China, but significant purchases have also been made by Iran, Turkey, Kazakhstan, Mexico and Vietnam.

Here’s the bottom line:

Central banks have a monopoly on central bank money. Gold is the competitor to central bank money and most central banks would prefer to ignore gold. Yet, central banks in the aggregate are net buyers of gold.

In effect, central banks are signaling through their actions that they are losing confidence in their own money and their money monopoly. They’re getting ready for the day when confidence in central bank money will collapse across the board. In that world, gold will be the only form of money anyone wants.

Central banks are voting with their printing presses in favor of gold. What are you waiting for?

Here’s a once in a lifetime opportunity to front run central banks and acquire your own gold at attractive prices before the curtain drops on paper money.


Jim Rickards
for The Daily Reckoning


The Sneaky Covid War on Cash


The Sneaky Covid War on Cash  By Viv Forbes,, 19 June 2020

The modern road to
Mulberry Money, Shin Plaster and Cubic Currency.

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Fiat Money

Today’s world is awash with Fiat Money.

“Fiat” means “let it be so”.

Fiat money is token currency supplied and regulated by governments and central banks. Its value relies on a government decree that it alone must be used as “legal tender” in paying for anything in that country. Its value falls as its supply increases.

Fiat money is not new – Marco Polo described its use in China over 700 years ago. Travellers and traders entering China were forced by Kublai Khan to exchange their real money (gold and silver coins and bars) for his coupons, made from mulberry bark, each numbered and stamped with the Khan’s seal. The Khan decreed that local traders were forced to accept them (“legal tender”). Foreigners got the goods, the great Khan got the bullion and the Chinese traders got the mulberry bark (a bit like getting the rough end of a pineapple). By controlling the supply and exchange rates for mulberry money, he became fabulously wealthy, and his citizens were impoverished.

During the American War of Independence, the colonial rebels had no organised taxing power so they printed the Continental dollar to finance the war. As the war dragged on, they printed too many dollars, and its fast debasement gave rise to the phrase “Not worth a continental”. Later, in the American civil war, confederate paper money used to support the army also became worthless. It was widely referred to as “shin-plaster”, after its highest value use in helping to bandage wounds.

Many dictators over the years tried the fiat money trick, but so many lost their heads or their thrones that it fell into disuse, being replaced by trusted real money such as English sovereigns,  Spanish doubloons, Austro-Hungarian thalers and American gold eagles. Only in wartime (or in a Covid panic) are people sufficiently distracted or scared to allow rulers to secretly tax everyone who holds their depreciating pretend money. (Keynesian academics promote this destructive policy for peace time use.)

Financing Big Wars

The last century or so has seen the explosion of big governments and big wars – race wars, class wars, world wars, regional wars, the war on want, the war on drugs, the war on inflation, the war on terrorists, the war on carbon and now the COVID world war.

All wars cost heaps of money. They are so expensive that to raise the full cost from honest taxes alone would cause a revolt.

The monetary watershed was World War I, which saw governments mobilise all community resources to the war effort. Money printing plus ration cards were their main tools. Money creation destroyed currencies everywhere. The cost of the war destroyed the German currency and the replacement papier mark was subject to the terrible German inflation of 1923 which gave rise to the Marxists followed by the Nazis.

Even the mighty pound sterling was fatally weakened and the discipline of the gold/silver standard was gradually destroyed. The British gold sovereign, first minted by Henry VII in the 16th century, disappeared from circulation at the height of the Great War in 1917. The British pound became a fiat currency in 1931 and silver started to disappear from British and Australian currency in 1945 after the Second Great War.  Even the mighty US dollar started on the road to ruin during the Vietnam War and gold convertibility was suspended by Richard Nixon in 1971.

We have seen the death of much of the world’s funny money in just the last 40 years. For example, in Peru, one million Intis would buy a modest home in 1985; five years later it would not buy a tube of toothpaste. Brazil had so many new banknotes they ran out of heroes to print on them.

In Vietnam in the 1980’s, factories had to hire trucks to carry the bags of dongs to pay the Tet (New Year) workers’ bonuses. In 1997 in Zaire, it took a brick-sized bundle of 500,000 notes of the local currency to pay for a meal – no one bothered to count them. On the Yugoslav border in 1989, tourists foolish enough to change “hard” currency for Yugoslav dinars got 14 cubic metres of dinars. “Dinars can no longer be measured in millions or billions, but only in cubic metres”. It had become a cubic currency. These grim records were eclipsed in November 2008, when Zimbabwe suffered inflation of 98% PER DAY.

Most governments are good at destruction – concentration camps, gulags, dictatorships, genocide, mob rule, world wars and . . . the destruction of sound money. Fiat money is their underhand method of official larceny and few people realise that robbery is happening until it is too late.

Future generations will look back in wonder at modern monetary madness. Words like peso, rouble, rupiah, baht, won, rouble, ringgit, inti, dinar, tolar, ostmark, dong, lira, zloty, cordoba, sole, cruziero, and yuan will join “shin-plaster” as descriptions of worthlessness. The Euro, Pound, Renminbi, Yen and Dollar are on the same slide to oblivion (the Australian dollar has lost over 90% of its purchasing power in the last 70 years).

“You Can’t Print Gold.”

Real money is always measurable by weight, such as pounds, grams, pennyweight and ounces of gold and silver, or carats of gemstones. It cannot be counterfeited or corrupted easily. But fiat money relies for its value on the honesty and openness of the rulers.

What is the cause of inflation and devaluations? It is simply loose monetary policy (watering the monetary milk). With the spread of democracy and more violent forms of mob rule, governments try to pretend they can satisfy the demands of the mob/electorate without taxing anyone. Today’s Covid cash splash is an extreme example.

Even a monetary fool such as Castro could see what caused Cuba’s inflation. In 1993 he stood up at a rally and declared: “There are nine billion too many pesos in Cuba”.

Dictators solve this problem by regular currency recalls. They declare yesterday’s shin-plaster worthless and issue a new lot, favouring their cronies, bankers and patrons. Eventually, none of their paper money is acceptable, even with legal tender backing, and barter or a foreign currency like the US dollar gains circulation.

Fiat money allows politicians to secretly steal your savings to fight yet another war on someone or something. Next we will see a war on “speculators”, or “hoarders” and calls for a world currency.

UN One-Worlders will not let this Covid crisis go to waste. They dream of one-world government (the “National Cabinet” writ large) with no circulating cash and mandatory use of Digital Money (Credit Card currency.) The Climate Alarmists would also like to use a digital money monopoly to promote their war on carbon. They could control and ration what we buy and consume – lettuce, tofu, bicycles and green energy only, with no overseas trips and no secret buying of diesel, bacon or beef.

We have already seen the start of their war on cash – Digital Money will join Mulberry Money, Shin Plaster and Cubic Currency in the long history of failed political money. While people are focussed on Social Distancing and Contact Tracking one-worlders are secretly planning to recall banknotes and abolish cash. Then they can ration the “money” available to each of us each month (cutting it off for white males once they reach their “Use by Date”?).

Does anyone believe the Euro would have survived World War II? Would the Islamic world or China accept a currency based largely on political promises of an enemy such as America? Only real money like gold, silver and barter goods are universally acceptable across all borders.

The Euro has been weakened by Brexit and the Climate Wars – it will not survive a real crisis. The Soviet Rouble block, established by force and maintained by official counterfeiting, could not survive withdrawal of the Red Army. And the Globo-dollar? Never.

Imagine the future of credit card electronic money when hackers or a neutron bomb destroys the electrons backing it. Or when the green energy grid collapses and the swipe-and-go terminals go blank? What will you use to buy food or petrol on the day after tomorrow?

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What is the solution?

Will Cash be the Biggest COVID Casualty?

We should oppose all sly moves to ban cash transactions in favour of the universal use of credit cards on the flimsy excuse that handling cash may spread the COVID virus. Don’t let our cash money become the biggest COVID casualty. Swapping paper money for a monopoly of electronic money is a bad deal.

And we should always be free to save our cash and protect the value of our savings by investing in real assets or sound money like gold and silver. No tin-pot dictator, when he fled, took his own currency. For many people in the world, a store of gold coins, silver coins, gem stones or a bit of productive land has allowed them to survive or escape when their government became too oppressive or lost a war, and the local fiat money became a cubic currency.

Viv Forbes
18 June 2020
Washpool   Qld   Australia 4306


The biggest experiment in money creation ever

 The biggest experiment in money creation ever  By Peter Schiff, Via Zerohedge, 28 May 2020

 For years, I have been warning that during the age of permanent stimulus (which began in earnest with the Federal Reserve’s reaction to the dotcom crash of 2000), each successive economic contraction would have to be met with ever larger, increasingly ineffective, doses of monetary and fiscal stimulus to keep the economy from spiraling into depression. I have also said that the enormity of the asset price gains over the last 10 years had increased the danger because reflating the bloated stock, real estate, and public and private debt markets would bring on doses of stimulus that could prove lethal for the economy. But even though I expected that the next financial crisis would be catastrophic, I thought that it would come into the world in the usual way, as a credit crisis triggered by over-leverage. But the Coronavirus ripped up those stage notes, and instead ushered in a threat that is faster and deeper than I imagined, and I imagined a lot. It’s a perfect storm, a black swan with teeth.

Even in my most pessimistic assessments, I did not expect that so many seemingly distant sectors of the economy would simultaneously evaporate, almost overnight, or that government deficits would expand to nearly $4 trillion in the first wave of the crisis, or that the Federal Reserve would so suddenly launch its largest-ever experiment in quantitative easing, (with almost none of the forward guidance they have used to telegraph lesser moves), which would expand its balance sheet by more than $3 trillion in a matter of just a few months. Nor did I expect that at its outset the Fed’s new buying plan would include, for the first time, corporate bonds and high yield debt ETFs. (I thought those expansions would come eventually, not immediately.)


To make matters even worse, the crisis has struck in the midst of a presidential election year, which guarantees that every policy decision has been made through a political prism. Democrats are seizing on the crisis to paint the Trump Administration as incompetent, ineffective and uncaring, often twisting themselves into knots to do so. (Trump has done himself no favors by using his daily briefings to showcase his inconsistent policy positions, combative political style, and his tenuous grasp of medical concepts.) So, in contrast to prior national crises that had tended to pull the country together (think 9/11), this event is tearing us apart.

But there is one thing upon which both sides seem to agree: the need for the Federal government to shower the economy with newly created money, bail out everyone who can claim that the virus “was not their fault,” and to fully liquefy the financial markets. The result has been an increase in government spending that dwarfs everything we have ever seen in the past, including the government’s response to the 2008 financial crisis. The $3 trillion increase in Federal debt accumulated this spring may just be the beginning.

The major political differences now center on matters of degree, particularly how long the economy should remain closed and how many jobs, businesses, and family financial plans should be exchanged for each life that may be saved through extended lockdowns. This is where it gets ugly.

  • Most Democrats, claiming that they are solely motivated by a desire to save as many lives as possible, are pushing for extended lockdowns. But given the economic and scientific idiocy of their proposals (for instance, the failure to differentiate between relative risk levels across society), you can forgive those who conclude that they are at least partially interested in enacting the sorts of radical economic transformations that would have been impossible to push through in normal circumstances.
  • Republicans are leaning in the other direction, with many favoring the Swedish approach to the pandemic, which looks to quarantine the most vulnerable (the elderly and immuno-compromised) while seeking to build “herd immunity” among the majority of healthy citizens. This idea avoids lockdowns and social distancing (and tolerates elevated infection rates among the healthy) in order to suppress future infection waves, and more importantly, to prevent economic catastrophe.

Of course, the Swedish government, knowing that it alone would have to bear the cost of its decisions, did a rational cost/benefit analysis on its options. U.S. governors, who are relying on the Federal government to support the unemployed and to bail out state deficits, have been spared these hard choices. With costs shifted to the Federal government, states have underplayed economic considerations in their public health plans. No doubt many states have seized on the crisis as an opportunity to be bailed out of financial problems that predated the current crisis.

From his basement-based presidential campaign, Joe Biden has repeatedly asserted that trade-offs between safety and economic activity are a “false choice,” and that any policies that may just prevent “one more death” should be implemented, no matter the costs. Such claims are symptomatic of a politician who prefers cheap posturing to reality.

The insanity of this idea can be seen in California, a state under total control of the Democrats.

Despite a per capita death rate that is less than 30% of the national average, based on current data from Wolrldometer, the state seems to be prepared to commit economic suicide. In Los Angeles County, home to more than 10 million people as of 2018, the County Public Health Director just recommended that lockdown orders stay in place until August. On May 8 The Mercury News reported that California guidelines now dictate that counties remain closed until there are no COVID deaths, and no more than one new case per 10,000 residents, in the last 2 weeks. That bar is set so high that it seems designed never to be cleared.

Democrats’ preferred approach seems to be: Test everyone in the country for the disease, contact trace the tens of millions who are likely to test positive (even though that accomplishes nothing), lockdown until a vaccine is developed, and pass the costs on to the Federal Government. They seem to prefer this to a world in which Americans are empowered to make choices regarding their own health risks and economic imperatives. In so doing, some have equated calls for “liberty” with racism and greed.

Some of the government’s immediate responses have been laughably inept. Take the Paycheck Protection Program (PPP), which provides direct payments to workers who have lost jobs due to forced shutdowns. The problem is that the payments are often significantly higher than the former wages earned by many workers. That means that even when companies are allowed to open and rehire, many employees may not want to come back to work, at least not until their new unemployment checks run out. And based on the current drift in Washington and the stakes created by the election, there is a high likelihood that the generous payments will be renewed before the program expires in late summer. (Democrats want to extend the higher payments until January).

This is dangerous territory. As former Libertarian leader Harry Browne once said:

Government breaks your leg, and then hands you a crutch and says, “See, if it weren’t for us, you wouldn’t be able to walk.”

That is precisely what is happening here.

For countries that issue currencies that are not the world’s reserve (that is every country but the U.S.) the playbook is radically different. Down in the cheap seats, politicians are aware that the costs of trying to print your way out of a financial dead-end are likely to be higher than the temporary gain of immediate liquidity injections. Blatant “debt monetization,” whereby a government sells newly-created bonds to its central bank, usually ends in rampant, or even hyper, inflation, which wipes out the savings and the economic viability of the nation. But the dollar sits at the center of the global financial system, creating a built-in demand, as most cross-border transactions need dollars to execute. This advantage allows Washington to consider policy options that would be too risky for other countries.

And so while we can clearly see this new wave of debt forming on the horizon, few fear any real damage when it finally crashes onto shore. The fact that we have yet to pay a high price for our prior accumulation of debt, in terms of inflation and high interest rates, gives politicians and Wall Street cheerleaders room to suggest that there is no downside to the “government pays for everything” approach.

With this trump card tucked into our sleeve, the United States will now engage in the biggest experiment in money creation the world has ever seen. The hubris of American monetary exceptionalism may mean that no plan will be devised to steer us out of the dead-end of zero, or negative interest rates, no plan to confront our massive fiscal structural deficits, and no plan to create an economy that can survive without government life support.

But maybe the experiment in money creation can succeed in getting us through the COVID Depression without causing consumer prices to surge and cutting the legs out under the dollar? Maybe everything I have ever learned, or felt, about economics is wrong? Maybe money can grow on trees? I’m betting it can’t.

But this crisis will present different math than what we have seen over the last 20 years. We will be showering the country with money at a time when the supply of goods and services is diminishing due to work stoppages, production declines, distribution bottlenecks, and import restrictions.

Even if all restaurant and retail employees were to ignore the incentives and return to work, there is no certainty that customers will follow as fears of contagion will remain long after the economy reopens, and social distancing procedures will reduce the quality of the experience while increasing its cost. There are also no legal protections currently on the books to shield employers from lawsuits brought by workers or customers who may contract the virus on their premises. Under these circumstances, wide swaths of business sectors may just cease to be. In sum, there are many reasons to suspect that a very deep recession, or even a depression, will remain even after the disease subsides. All this means that the economic rebound may be much softer than expected.

So, we will have more money chasing fewer goods and services. This is a recipe for stagflation, whereby prices go up even while the economy contracts, creating a horrible economic situation for those at the bottom of the economic pyramid. Most dangerously, we see this happening now in the food supply, with meat processors and farmers facing difficulties in getting products to market. If you think social cohesion is breaking down now, wait until people have problems feeding their families.

When you get down to it, this crisis exposes just how deeply the decay of debt has undermined the economy. The forced shutdowns and social distancing would have been a serious blow to a very robust economy, but not likely fatal. In a healthy economy, individuals, businesses, and even governments, may have had the savings to draw on in case everything went wrong. Savings could have allowed us to freeze economic activity for a time, and survive to see it restart. But credit has become so cheap and so freely given in recent decades that the incentive to save has never been lower. Knowing that credit cards are handed out like lollipops, consumers have learned to live paycheck-to-paycheck. With interest rates near zero, small businesses have learned to rely on business lines of credit to pay current bills, and mega-cap corporations borrow to buy back shares, trading long-term stability for a short-term share price appreciation. In such an environment, any economic interruptions that constrain short-term revenues create an immediate crisis. Without the life support of savings, everyone immediately calls on the government to ride to the rescue. The problem is the politicians show up with the economic equivalent of pep pills and leeches.

So, we can see where this is going. Debt and monetary expansion look almost certain to increase. The dollar may eventually buckle under the weight, dragging the bond market down with it. It’s hard to say what the economy will look like once the bill comes due, but investors have plenty of warning. They should use the current period, where the dollar has yet to fall, to consider holdings that may provide real protection.


18 Signs That We Are Facing A Record Breaking Economic Implosion In 2020

18 Signs That We Are Facing A Record Breaking Economic Implosion In 2020  By Michael Snyder, The Economic Collapse, 7 May 2020

 In just six weeks, the entire global economy has completely come apart.  All over the world we are seeing numbers fall faster than we ever have before, and the outlook for the rest of the year is exceedingly bleak.  Fear of the coronavirus is going to paralyze global trade for the foreseeable future, and the lockdowns in some nations will last for many months to come.  Here in the United States, some states are attempting to make an effort to “reopen”, but in most instances that will involve “multiple stages”.  Meanwhile, tens of millions of Americans have already lost their jobs, much of the population has already run through their meager savings, and financial institutions are becoming extremely tight with their money.  Even if COVID-19 disappeared tomorrow, our momentum would still take us into an economic depression, but of course this virus isn’t going to disappear any time soon.  After 9/11 our society evolved into an anti-terror state, and COVID-19 is going to permanently alter our society as well.  So anyone that was hoping for a quick “return to normal” can forget it, because “normal” is about to be completely redefined.

The pace at which economic conditions have deteriorated in recent weeks has been absolutely breathtaking, and the numbers just keep getting worse and worse.

The following are 18 signs that we are facing a record breaking economic implosion in 2020…

#1 According to economists surveyed by the Wall Street Journal, the April jobs report will show that the unemployment rate in the United States is now above 16 percent.

#2 U.S. manufacturing orders just crashed by the most ever.

#3 U.S. gasoline consumption just dropped to the lowest level ever recorded.

#4 Light vehicle sales in the U.S. just fell to the lowest level that we have seen since the early 1970s.

#5 The government program that was supposed to get small businesses through this crisis has been a tremendous failure

According to the CNBC/SurveyMonkey Small Business Survey released Monday, which surveyed 2,200 small business owners across America, while the $660 billion Paycheck Protection Program was instituted to give them a lifeline through the coronavirus and economic shutdown, only 13% of the 45% who applied for the PPP were approved.

#6 The “coming meat shortages” are already here.  According to the New York Post, Costco is now rationing meat and Kroger is warning customers of very serious supply problems…

Costco on Monday said it will be limiting customers to just three packages of meat per shopper, while Kroger supermarkets posted an alert on the meat section of its website warning that it may have limited inventory “due to high demand.”

Grocers have been bracing for a run on meat in mid-May as major meat processing plants, including Tyson Foods, have been forced to shut down production. But the shortages appear to have come earlier than expected as consumers worried about the meat shortage have been stocking up, experts say.

#7 Global smartphone shipments were down 11.7 percent in the first quarter compared to a year ago.  That represents the fastest drop on record.

#8 Hong Kong just recorded the worst economic contraction in the city’s entire history.

#9 U.S. consumer spending was down 7.6 percent during the first quarter of 2020.

#10 American Airlines posted a loss of 2.2 billion dollars during the first quarter of 2020.

#11 It looks like retail giants Neiman Marcus, J. Crew and JC Penney are all headed for bankruptcy.Crisis and Leviathan: …

#12 Fox Business is reporting that Hertz is preparing to file for bankruptcy due to plunging car rental ridership.

#13 Gold’s Gym field for bankruptcy on Monday.

#14 Edmunds is projecting that auto sales in the United States this month will be down by more than half compared to April 2019.

#15 In Mexico, manufacturing activity is falling at the fastest pace ever recorded.  The following comes from Zero Hedge

While few have lofty expectations for economic performance with the global economy still largely shutdown, what is happening in Mexico is simply unprecedented. Here are some striking observations detailing the unprecedented economic collapse of the southern US neighbor, courtesy of Goldman.

Business confidence declined sharply in April (the seventh consecutive monthly decline) with the index now sitting deep within pessimist territory. The Manufacturing and Services PMIs also fell sharply in April, and are now at the lowest levels on record.

#16 More than 30 million Americans have already lost their jobs, and economists are projecting that millions more will lose their jobs in the weeks ahead.

#17 In March, U.S. home sales declined by double digit percentages in every region of the country.

#18 White House economic adviser Kevin Hassett is warning that U.S. GDP could fall by up to 30 percent during the second quarter of 2020.

For investors, the good news is that stock prices have bounced back quite a bit after the initial crash, and many market optimists are hoping that this Fed-fueled rally will keep on rolling.

But others are warning that this is a trap for bullish investors, and Kevin Smith is openly telling everyone that this could be the “last chance to sell” before another huge move downward…

The stock market may be flashing some ridiculously bullish signals, but hedge fund bear Kevin Smith is sticking by his prediction that the Dow and S&P 500 are on the verge of a Great Depression-level crash.

In fact, the Crescat Capital founder warns, this is your “last chance to sell” before the impending collapse.

We shall see what happens, but for the moment the financial markets are doing their best to try to defy economic reality.

Unfortunately, economic reality is hitting most Americans like a ton of bricks right now.  We are in the middle of the greatest spike in unemployment that the United States has ever seen by a very wide margin, and most of the jobs that have been lost are never coming back.

And as bad as things are already, the truth is that this is just the beginning.

A whole lot more pain is on the way, and it is going to shake our nation to the core.

Our economic and financial bubbles lasted far longer than they should have, but now fear of COVID-19 has burst them all, and it isn’t going to be possible to reinflate them this time around.


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