Man Connected At The Highest Levels In China Says Gold Will Surge Another $500 This Year And Just Issued This Warning

Today the man connected at the highest levels in China said the price of gold will surge another $500 this year and he also just issued this warning.

Gold: Contagion
April 13 (King World News) – John Ing:  Is It Enough? Countries closed borders as the pandemic spread beyond the Chinese, Iranian and South Korean borders. At risk are lives but the economic impact already is large. The world is in lockdown mode. The economic fallout is only beginning with disrupted travel, tourism, and consumer spending, a critical engine that makes up a whopping 70 percent of the US economy. Global stock markets lost $24 trillion in March, more than US GDP at $22 trillion. Unemployment could soar from 3 percent to 35 percent, surpassing the Great Depression. Oil dropped 67 percent to an 18 year low. Much is still unknown. It is this unknown that markets fear, and rather than a quick bounce back. We believe a market bottom won’t be reached until the virus numbers peak, or a vaccine is distributed, maybe a year from now.

Fear can be contagious. In less than a couple months, the markets switched from greed to fear as the scale of Covid-19 (C-19) spread. Ever hopeful after a decade of growth, the bulls counted on central banks to bail them out, trusting the Fed’s interest rate reduction would stem the tide. It hasn’t. Rates were already ultralow and it is the volume of money, not the cost that really matters. For now, lower rates won’t stimulate spending from a populace that is worried about shaking hands or swabbing down everything they touch. The virus is a supply-side shock to the system and a serious recession will cause a chain reaction already weakened from a destructive trade war. Of growing concern is that this bear market will morph into something more persistent, deeper and longer.

Health Crisis Meets Bailouts
Taking a page from its well worn “crisis” playbook, the Federal Reserve quickly sprang into action, slashing rates to zero and introducing backstops to the financial market. Australia, Canada, and Malaysia soon followed, pumping money into their economies. Governments have embarked on the largest rescue bailouts in history higher than 10 percent of GDP. So far the US is spending $2.3 trillion, Japan $1 trillion, Canada $200 billion and Germany $1.2 trillion, but these are only down payments. A week later, the Fed is to provide up to $2.3 trillion in loans. More is likely needed. Yet the world’s richest nations have neither enough masks nor ventilators.

In fact, the monetary spigots has limited effectiveness because rates were already low before the virus spread. In the past decade, global monetary policy slashed rates and rounds and rounds of quantitative easing inflated central banks’ balance sheets as they bought their own bonds. Central banks are at the limits of their unconventional policies and instead, fiscal policy has taken over with trillions of government bailouts not dissimilar to Democrat Alexandria Ocasio-Cortez’s Modern Monetary Theory (MMT), so derided only months earlier. MMT is yet another radical economic theory that argues government debt and deficits don’t matter and that these expenditures will only grow the economy. The ensuing deficits are to be financed by the resultant prosperity and the printing of new currency, In other worlds, having your cake and eating it too, not much different than monopoly money or the Zimbabwe dollar.

To be sure, the longest economic expansion in US history has ended. While we learned health is easy to take for granted, markets too were taken for granted. We believe the problem is that the Fed doesn’t have enough tools after the trillions of dollars of quantitative easing left a legacy of near record debt. Today global debt to GDP is at an all time high of 300 percent and will worsen as the virus spreads triggering the “bust” part of “boom and bust”. We believe that the Fed’s shoveling of money in QE infinity, in the form of unlimited buying of Treasuries and mortgage- backed securities, debases America’s obligations. Money creation is the easy part. Americans believe they can always create more debt and more dollars, since that would be tomorrow’s worry. In kicking the can down the road, they hope to postpone the inevitable deflationary hangover of austerity from cutbacks to discretionary spending and budgets.

The Virus is Everybody’s Problem
The danger is that the mother of all bailouts and government intentions are not enough and “doing whatever it takes” fails. Unlike the Great Depression, the challenge is not enough money but the need for a collective response to fight a global problem. Covid-19 respects no borders or authority. It is the nearest thing to a world war. Still, the virus and unemployment spreads. History shows that governments must cooperate and work together, putting aside the nationalism, politics and end the petty differences so in vogue today. Instead of rallying allies in a global response to the pandemic, Mr Trump continues to alienate them, like hogging 3M’s N95 masks…more here

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