Man Who Is Connected In China At The Highest Level Says How Many Zeros Are Enough? Maybe $15,000 Gold

Today one of the greats in the business who is connected in China at the highest levels says regarding gold, how many zeros are enough…maybe $15,000?

Gold: How Many Zeros Are Enough?
(King World News) – John Ing:  With the pandemic disrupting lives and the global economy, government borrowings have climbed ever higher. US unemployment is nearly at Great Depression levels and a summer of civil unrest raises the stakes in an upcoming US election already lost in the wreckage of Covid- 19 with more than 120,000 fatalities to date.

We believe the Covid-19 pandemic is the seminal event of our generation, which will have a massive global and geopolitical influence. True, despite nearing half a million deaths globally, many more lives will be lost, particularly in the US where incoherent measures, easing lockdowns, and the lack of leadership have resulted in the failure to contain or even suppress the virus. True, the virus respects no border, political stripes nor economic strata, yet governments have declared victory prematurely and reopened their economies, more for political reasons. Mr. Trump may be finished with the virus, but the virus is not finished with us. And true, in the post- pandemic world we’re not returning to where we were, it is to be the “never normal” instead.

United States of Infection
Indeed, history shows that these seminal events set off chain reactions, aftershocks and trends that we only see afterward. We believe that the pandemic’s aftershock will have economic, political, social, and military affects, particularly with the US – China relationship at historic lows. The economic policy response has been massive and global, uniting the world against a common foe with central banks throwing everything but the kitchen sink, including draconian lockdowns. The bailouts keep piling up, billons, trillions, there are not enough zeros. A trillion or two here and tens of trillions there. Significantly, the shock has disrupted global supply chains and trade, at a time when economic activity is now at its weakest since the Great Depression, exposing the interdependence of countries who are insourcing everything from ppe to cars to phones to semiconductor chips.

While the 2008-2009 financial crisis was mainly a financing problem in Wall Street, this time it is an economic problem with global casualties. The UN has calculated the pandemic has wiped out $8.5 trillion of global output, replaced by some $10 trillion of government bailouts. To be sure, the economic fallout from the coronavirus has raised the risk of sovereign defaults, particularly in those developing countries which lack the savings and institutions, which are now in terrible financial shape. Then there is the eurozone with its chronic debt problem between the northern and southern members made worse by Germany’s top court’s intransigence as it ruled that the ECB exceeded its mandate when it unleashed its bailout scheme, setting up a constitutional crisis in the European Union.

A worse thought though is the collapse in trust in America, recklessly deconstructing its own framework. In becoming the world’s largest debtor, after decades of cheap money, the United States has seen a collapse of trust in its economic and social make-up, exposing the country to fragmentation while its finances will be severely hit as the pandemic accelerates. The failings of capitalism, polarisation and racial inequality have robbed America’s moral standing. Ironically a new era of protest and a broad radicalised electorate appears to be fueling the force that could actually change the system. Nonetheless, despite the stock market’s rebound, retracing more than half of the coronavirus sell-off, harder times are ahead once the economic hardship from the pandemic materializes in the coming months or years.

Debt Trap
The pandemic has laid bare many unpleasant truths about the United States that we know exist but markets prefer to ignore. Too long America took for granted the longest economic expansion on record, financed by a large debt, denominated in a currency they can always print, ensuring they would never become insolvent. But now, the United States has weaponized this currency and despite its financial edge, its big spending today limits their options. The world faces a global recession, maybe worse than the Great Depression and although the world is much more interconnected, deglobalisation and the pandemic have weakened confidence in the United States and the dollar, just at a time when US exceptionalism has run its course.

In fighting the pandemic, the White House has put opening up the economy a priority, ahead of science and certainly guaranteeing a virulent second wave of Covid-19. But it is not only in the fight against the virus, but in the effort to resurrect the economy in time for the November elections, the White House has racked up record amounts of debt skewing the stimulus to households over businesses. It is politics at all costs, including the abrogation of long standing geopolitical relationships in favour of an “America First” policy. Trade wars and demonizing China, no doubt resonates in key electoral states, but drives a wedge between nations, ending decades of cooperation. This polarizing action is not dissimilar to the protectionist environment that worsened the Great Depression. Of concern is that the “beggar thy neighbour” mercantilism did not work then and won’t today.

Today, America’s isolation measures won’t help them when they need help with their finances. Sadly, it is politics that trumps all, which makes it the 1930s all over again. It is not so different this time.

For the past few decades, the United States built a consumption economy based on the service sector. Today consumer spending accounts for 70 percent of US economic growth. After the 2008-2009 financial crisis, the financial sector was given a boost as rounds of quantitative easing (QE), and near zero interest rates helped inflate asset prices and resurrect the economy, however the cuts also cut the returns on debt, which penalized savers as yields evaporated widening the wealth gap. And, as investors chased returns, property and the stock markets were the main beneficiaries of this easy money as Wall Street became easy street, bypassing Main Street.….More Here

Click here for reuse options!
Copyright 2020 Hiram's 1555 Blog