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8.4.20 - Silver: Poor Man's Gold No More?

Gold last traded at $2,025 an ounce. Silver at $26.13 an ounce.

NEWS SUMMARY: Precious metals rallied Tuesday, with gold prices cresting $2,000/oz and silver rushing past $25/oz., on bullish momentum and a weaker dollar. U.S. stocks rose modestly as lawmakers try to come to a bipartisan agreement on a new coronavirus stimulus package.

Silver: poor man's gold no more? -Saefong/Marketwatch
"Investors have focused on a rise in record prices for gold, but silver’s up about 25% in July - the metal's second-biggest monthly gain on record - and it's still undervalued compared with the yellow metal. 'Silver is often called the 'poor man's gold' because some of the same factors that cause gold prices to rise do the same thing to silver prices,' says Ed Moy, chief market strategist at gold retailer Valaurum. 'And what is driving gold prices now are mainly the fear of inflation due to the magnitude of the monetary and fiscal stimulus worldwide, and the flight to safety due to the uncertainty around how and when the global economy will recover.' Silver, however, is 'cheaper per ounce' than gold, and its prices are much more volatile, he says. It has also been 'lagging behind gold's rise' and the ratio of the number of ounces of silver to buy one ounce of gold is historically high...If silver is underpriced, 'there is a lot of money to be made,' says Moy, who was director of the U.S. Mint from 2006 to 2011....'Silver is not even halfway to its all-time high,' says Ryan Giannotto, director of research at exchange-traded-fund-issuer GraniteShares. While it’s unlikely silver would more than double in the immediate future, it’s “unwise to rule out extreme scenarios.” It takes more than 80 ounces of silver to buy one ounce of gold. Though the ratio has seen a significant decline in recent months, it’s still well above the typical gold-to-silver ratio, which Moy pegs at one ounce of gold to 60 ounces of silver....Ross Norman, CEO of precious-metals news and information provider Metals Daily, says the ratio between the metals rose to a 4,000-year high at 126 on March 18. 'It has been clear for some time that silver was excessively cheap compared to gold,' he says. The ratio is still historically high, 'suggesting there is scope for greater gains in silver still.'....For most individual investors, government-made silver bullion coins are an attractive way to invest, he says, and governments guarantee the weight, content, and purity of each coin."

dollar Behind the Vast Market Rally: A Tumbling Dollar -Wall Street Journal
"The ICE Dollar Index, which measures the dollar against a basket of other major currencies, in July notched its worst month in nearly a decade and recently hit a two-year low. The fall extended a reversal that began in late March, spurred lately by ballooning worries that mounting coronavirus cases will stall the U.S. economic rebound...Big-name investors such as Ray Dalio and Jeffrey Gundlach have recently said publicly that the flood of U.S. government spending being injected into the financial system could eventually stoke inflation, eroding consumers' purchasing power. Surging budget deficits tend to make investors less likely to hold a country's currency. Fitch Ratings on Friday revised its credit rating outlook for the U.S. to negative from stable. At the same time, the currency's slide is adding further support to the booming market rally, lifting stocks and commodities. A weaker dollar boosts multinational companies, which see their products get more competitive abroad and can more easily convert overseas profits into dollars. 'These things are denominated in dollars, and the dollar is getting crushed,' said Christopher Stanton, chief investment officer of Sunrise Capital Partners. He expects the trend to continue and is directly wagering against the currency, betting on gains in the euro against the dollar and buying gold, which some investors are using as an alternative store of value. Gold recently climbed to all-time highs for the first time since 2011....Net investor bets on a weaker dollar recently climbed to their highest level since April 2018, Commodity Futures Trading Commission data compiled by Scotiabank show. 'We are in a stage of very high momentum,' said Ed Al-Hussainy, senior interest-rate and currency analyst at Columbia Threadneedle Investments....Investors say that the economic picture could make this dollar slide longer lasting."

Data collected from your phone is being used to score you -Washington Post
"Operating in the shadows of the online marketplace, specialized tech companies you've likely never heard of are tapping vast troves of our personal data to generate secret 'surveillance scores' - digital mug shots of millions of Americans - that supposedly predict our future behavior. The firms sell their scoring services to major businesses across the U.S. economy. People with low scores can suffer harsh consequences. CoreLogic and TransUnion say that scores they peddle to landlords can predict whether a potential tenant will pay the rent on time, be able to 'absorb rent increases,' or break a lease. Large employers use HireVue, a firm that generates an 'employability' score about candidates by analyzing 'tens of thousands of factors,' including a person's facial expressions and voice intonations. Other employers use Cornerstone's score, which considers where a job prospect lives and which web browser they use to judge how successful they will be at a job. Brand-name retailers purchase 'risk scores' from Retail Equation to help make judgments about whether consumers commit fraud when they return goods for refunds. Players in the gig economy use outside firms such as Sift to score consumers' 'overall trustworthiness.'....Surveillance scoring is the product of two trends. First is the rampant (and mostly unregulated) collection of every intimate detail about our lives, amassed by the nanosecond from smartphones to cars, toasters to toys. This fire hose of data - most of which we surrender voluntarily - includes our demographics, income, facial characteristics, the sound of our voice, our precise location, shopping history, medical conditions, genetic information, what we search for on the Internet, the websites we visit, when we read an email, what apps we use and how long we use them, and how often we sleep, exercise and the like. The second trend driving these scores is the arrival of technologies able to instantaneously crunch this data: exponentially more powerful computers and high-speed communications systems such as 5G, which lead to the scoring algorithms that use artificial intelligence to rate all of us in some way. The result: automated decisions, based on each consumer's unique score, that are, as a practical matter, irreversible. That's because the entire process - the scores themselves, as well as the data upon which they are based - is concealed from us....The tech industry insists that its every advance improves our lives. But that's a myth. Surveillance scoring enables companies to cloak old-school discrimination in an aura of technological infallibility and wonder....Secret surveillance scoring places us at the precipice of the 'singularity,' a dystopian turning point after which machines will make judgments about humans that will determine our fate. We either seize control of our future, or risk losing it."

Do some people have protection against the coronavirus? -Dr. Grupta/Kane/CNN
"Why do some people get very sick and even die from their illness, while other similar people show no symptoms and may not realize they've been infected at all? We know some of the big factors that put people at higher risk of having a severe, even fatal, course of disease: being over 60; being overweight or obese; having one or more chronic diseases such as diabetes, cardiovascular disease, kidney or lung disease, and cancer; and being a person of color - Black, Latinx or Native American. But might the opposite also be true: Could certain people actually have some type of protection? A recently published summary article in the journal Nature Reviews Immunology put forth a tantalizing possibility: A large percentage of the population appears to have immune cells that are able to recognize parts of the SARS-CoV-2 virus, and that may possibly be giving them a head start in fighting off an infection. In other words, some people may have some unknown degree of protection. 'What we found is that people that had never been exposed to SARS Cov2 ... about half of the people had some T-cell reactivity,' co-author of the paper Alessandro Sette from the Center for Infectious Disease and Vaccine Research at La Jolla Institute for Immunology, told CNN....They speculate that this T cell recognition of parts of the SARS-CoV-2 virus may come in part from past exposure to one of the four known circulating coronaviruses that cause the common cold in millions of people every year....There are also implications for when we might achieve 'herd immunity' - meaning that enough of the population is immune to SARS-CoV-2, thanks either to infection or vaccination, and the virus can no longer be as easily transmitted...If you have 50% already in a way immune, because of these existing immune responses, then you don't need 60 to 80%, you need 10 to 30% - you have covered the 50% already."

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8.3.20 - The Lockdown's Destruction -Editors/WSJ

Gold last traded at $1,992 an ounce. Silver at $24.51 an ounce.

NEWS SUMMARY: Precious metal prices steadied near recent highs on a firmer dollar and mild profit-taking. U.S. stocks rose, led by tech giant Microsoft, amid upbeat economic data and rising government stimulus agreement hopes.

7 Reasons Gold Will Continue to Soar to Record Highs -Motley Fool
"This has not been an easy year for Wall Street and investors to digest. The coronavirus disease 2019 (COVID-19) pandemic has turned societal habits on their head and displaced more than 20 million workers. It also sent equities to their steepest and fastest tailspin in history during the first quarter, only to see the market rebound ferociously over the past four months. Frankly, no one has any idea what to expect next. However, one group of investors who aren't going to complain are those who own physical gold or gold mining stocks. Physical gold has set two consecutive record-closing highs to begin the week, and is now up almost $390 an ounce in just the past six months. Gold has left the benchmark S&P 500 eating its dust in 2020, and there's a very good probability that this will continue for the foreseeable future. Below you'll find seven reasons why this gold rally still has very long legs. 1. Historically low global bond yields - To begin with, physical gold is ascending to the heavens because income seekers have a narrowing list of options to generate guaranteed income....2. Unlimited quantitative easing - Another reason gold can be expected to continue rocketing higher can be traced to the Federal Reserve's implementation of unlimited quantitative easing....3. Bullion shortages - Never forget the importance of supply-and-demand economics. If demand outpaces supply, the price of a good or service will rise...For months, there have been on-and-off gold bullion shortages....4. Geopolitical risk - Gold is also a haven investment...Although the world is united in their fight against tensions between the U.S. and China from once again heating up....5. COVID-19 fear and uncertainty - Gold is often known as a safe-haven investment during periods of panic and fear. The unprecedented nature of the coronavirus pandemic certainly has folks on edge....6. Bull markets are usually long lasting - Gold has history on its side. Although spikes higher do happen in the gold market, it's far more common to see the physical metal enter long bull-market cycles....7. Emotion-driven investing - Finally, don't discount emotion-driven short-term trading as a reason behind higher gold prices....Gold hitting $3,000 by 2022 is a very real possibility."

lockdown The Lockdown's Destruction -Editors/Wall Street Journal
"Democrats and their media allies have trapped themselves in a contradiction. They are deploring last Thursday's grim second-quarter GDP report even as they demand a repeat of the lockdown that caused the economic catastrophe. What do they expect when government orders Americans to sit in their homes for weeks? That's the main message from the 32.9% decline in GDP, the worst ever recorded. The damage extended across the private economy - from business investment to manufacturing and housing. But the greatest harm was from the collapse of consumer spending as the shutdown crushed the service economy. Consumer spending fell 34.6% and accounted for some 25 percentage points of the GDP decline. The fall in transportation, recreation, food services and hotels was brutal. But the biggest surprise was the plunge in health-care spending during a health-care crisis. Health care represents about 12% of the U.S. economy and its collapse subtracted 9.5 percentage points from GDP....The economic harm from stopping all elective surgeries and barring visits to doctors was severe and unnecessary. It was also a terrible public-health blunder. That harm will play out for years as Americans discover cancer, heart-disease and other diagnoses that were missed or delayed. Notably, Congress's nearly $3 trillion in appropriations couldn't stop the economic collapse...The GDP decline shows that $1,200 cash payments and jobless benefits can't replace a dynamic private economy....Hard to believe, but some on the left are stumping for a second nationwide lockdown to control the virus. Shut the U.S. down again until October when the scourge will be gone for good. Do they want another 33% decline in GDP and 40 million more unemployed?....The public is smarter than the media and can adjust its behavior when flare-ups occur."

The Myth of the Failure of Capitalism -Ludwig von Mises/
"Capitalism allegedly has failed, has proven itself incapable of solving economic problems, and so mankind has no alternative, if it is to survive, than to make the transition to a planned economy, to socialism. This is hardly a new idea. The socialists have always maintained that economic crises are the inevitable result of the capitalistic method of production and that there is no other means of eliminating economic crises than the transition to socialism. If these assertions are expressed more forcefully these days and evoke greater public response, it is not because the present crisis is greater or longer than its predecessors, but rather primarily because today public opinion is much more strongly influenced by socialist views than it was in previous decades. When there was no economic theory, the belief was that whoever had power and was determined to use it could accomplish anything. In the interest of their spiritual welfare and with a view toward their reward in Heaven, rulers were admonished by their priests to exercise moderation in their use of power. Also, it was not a question of what limits the inherent conditions of human life and production set for this power, but rather that they were considered boundless and omnipotent in the sphere of social affairs. The foundation of social sciences, the work of a large number of great intellects, of whom David Hume and Adam Smith are most outstanding, has destroyed this conception. One discovered that social power was a spiritual one and not (as was supposed) a material and, in the rough sense of the word, a real one....Economic theory predicted the effects of interventionism and state and municipal socialism exactly as they happened....Liberalism cannot be deemed responsible for any of the institutions which give today's economic policies their character. It was against the nationalization and the bringing under municipal control of projects which now show themselves to be catastrophes for the public sector and a source of filthy corruption; it was against the denial of protection for those willing to work and against placing state power at the disposal of the trade unions, against unemployment compensation, which has made unemployment a permanent and universal phenomenon, against social insurance, which has made those insured into grumblers, malingers, and neurasthenics, against tariffs (and thereby implicitly against cartels), against the limitation of freedom to live, to travel, or study where one likes, against excessive taxation and against inflation, against armaments, against colonial acquisitions, against the oppression of minorities, against imperialism and against war....The line of argument that leads to blaming capitalism for at least some of these things is based on the notion that entrepreneurs and capitalists are no longer liberal but interventionist and statist. The fact is correct, but the conclusions people want to draw from it are wrong-headed....Because many ventures depend on political favors, those who undertake such ventures must repay the politicians with favors....It is true that socialism and interventionism have not yet succeeded in completely eliminating capitalism. If they had, we Europeans, after centuries of prosperity, would rediscover the meaning of hunger on a massive scale....The crisis under which the world is presently suffering is the crisis of interventionism and of state and municipal socialism, in short the crisis of anticapitalist policies. Capitalist society is guided by the play of the market mechanism. On that issue there is no difference of opinion....Bastiat has not failed, but rather Marx and Schmoller."

Together, You Can Redeem the Soul of Our Nation -Lewis/New York Times
"[Mr. Lewis, the civil rights leader who died on July 17, wrote this essay shortly before his death, to be published upon the day of his funeral.] While my time here has now come to an end, I want you to know that in the last days and hours of my life you inspired me. You filled me with hope about the next chapter of the great American story when you used your power to make a difference in our society. Millions of people motivated simply by human compassion laid down the burdens of division. Around the country and the world you set aside race, class, age, language and nationality to demand respect for human dignity....Though I was surrounded by two loving parents, plenty of brothers, sisters and cousins, their love could not protect me from the unholy oppression waiting just outside that family circle....If we are to survive as one unified nation, we must discover what so readily takes root in our hearts that could rob Mother Emanuel Church in South Carolina of her brightest and best, shoot unwitting concertgoers in Las Vegas and choke to death the hopes and dreams of a gifted violinist like Elijah McClain. Like so many young people today, I was searching for a way out, or some might say a way in, and then I heard the voice of Dr. Martin Luther King Jr. on an old radio. He was talking about the philosophy and discipline of nonviolence. He said we are all complicit when we tolerate injustice. He said it is not enough to say it will get better by and by. He said each of us has a moral obligation to stand up, speak up and speak out...Democracy is not a state. It is an act, and each generation must do its part to help build what we called the Beloved Community, a nation and world society at peace with itself. Ordinary people with extraordinary vision can redeem the soul of America by getting in what I call good trouble, necessary trouble. Voting and participating in the democratic process are key. The vote is the most powerful nonviolent change agent you have in a democratic society. You must use it because it is not guaranteed. You can lose it. You must also study and learn the lessons of history because humanity has been involved in this soul-wrenching, existential struggle for a very long time....Though I may not be here with you, I urge you to answer the highest calling of your heart and stand up for what you truly believe. In my life I have done all I can to demonstrate that the way of peace, the way of love and nonviolence is the more excellent way. Now it is your turn to let freedom ring...So I say to you, walk with the wind, brothers and sisters, and let the spirit of peace and the power of everlasting love be your guide."

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7.31.20 - The Road To Inflation by 2022

Gold last traded at $1,971 an ounce. Silver at $24.08 an ounce.

NEWS SUMMARY: Precious metal prices shot upward, with gold reaching toward $2,000/oz and silver fast approaching $25/oz., on continued safe-haven buying. U.S. stocks traded mixed as investors weighed growing negative economic sentiment with strong tech earnings.

Gold - The Currency Of Last Resort -Dimitrov/Seeking Alpha
"The way I see gold is as a special form of currency. A currency that becomes relevant only at times when the risk for the global financial system runs very high. Not the risk of recession nor the equity risk, but rather the risk of the stability of the monetary regime. This is my reason to holding gold as part of my portfolio - as a form of insurance against monetary and fiscal authorities losing control or simply transitioning to a new system. Everyone would agree that one of the most important drivers of the price of gold is the level or real interest rate in the economy and for most of the time this is correct. Even if it's one of the most important drivers for gold during normal times, there is an even more powerful driver of gold prices - the overall risk for the existing monetary regime....The risk for the current monetary regime is significant and even if authorities manage the transition towards a new monetary system well, the level of uncertainty around it would provide a tailwind for gold prices....Holding gold as part of an equity portfolio in a barbell like strategy is my approach to ride the current wave of uncertainty and high risk. I don't see the precious metal as a speculative investment, nor as a simple inflation hedge. The way I see gold is a currency of last resort, which preserves purchasing power over the long term and gains ground at inflection points when the existing monetary system becomes less sustainable."

inflation The Road To Inflation -TSLombard
"Inflation remains an important theme for our clients. Perhaps this reflects supreme confidence in the policies governments and central banks have introduced to support their economies during the COVID-19 pandemic. With stimulus on a scale that is unprecedented outside of the two World Wars, it is not surprising some investors believe the authorities are doing ;too much'...So how serious is this threat? ...History shows inflation is vulnerable to sudden 'regime shifts' - which economists always fail to appreciate in real time - so it would be foolish to rule out big inflation surprises in the years ahead. The worst kept secret in macro is that economists don’t really understand inflation. Yet, until recently, there was a still a dominant consensus – in the long term, inflation was ‘always and everywhere a monetary phenomenon’. Certainly, there has always been a compelling relationship between the money supply and inflation, at least over long enough horizons. The underlying behavior of inflation changed after the Gold Standard, which was also testimony to the power of the monetary regime....To be fair to economists, the behavior of inflation makes it inherently tricky to forecast. Since the end of the Gold Standard, it has followed a persistent 'random walk', vulnerable to large structural breaks. It is possible COVID-19 will trigger another regime shift in these dynamics....We can identify the conditions that seem most likely to produce an inflation episode (based on history). They include: 1) Recovery from the current global recession...2) A revival in the velocity of money...3) Large, ongoing fiscal support, especially when the economy no longer needs it...4) Central banks that are prepared to tolerate an 'inflation overshoot', having missed their targets in the opposite direction for much of the past 20 years. Combine these forces and you have a compelling inflation narrative for 2022 and beyond."

U.S. Economy Posts Record Downturn -Wall Street Journal
"The U.S. economy contracted at a record rate last quarter...The Commerce Department said U.S. gross domestic product - the value of all goods and services produced across the economy - fell at a 32.9% annual rate in the second quarter, or a 9.5% drop compared with the same quarter a year ago. Both figures were the steepest in records dating to 1947. The contraction came as states imposed lockdowns across the country to contain the coronavirus pandemic and then lifted restrictions....Separately, the Labor Department said applications for weekly unemployment benefits rose by 12,000 to 1.43 million in the week ended July 25, and the number of people receiving unemployment benefits increased by 867,000 to 17 million in the week ended July 18, signs the jobs recovery is losing momentum....A surge in virus infections since mid-June appears to be slowing the recovery in some states, according to some private-sector real-time data....The decline in GDP in the second quarter reflected the deep hit to consumer and business spending from lockdowns, social distancing and other initiatives aimed at containing the virus. Consumer spending fell at a 34.6% annual rate, amid sharp decreases in services spending like health care and lower spending on goods."

A Quarter Of All Household Income In The US Now Comes From The Government -Zero Hedge
"Following today's release of the latest Personal Income and Spending data, Wall Street was predictably focused on the changes in these two key series, which showed a modest slowdown in personal spending (to be expected one month after the savings rate in the US hit a record), coupled with a modest decline in personal income (as government benefits and stimulus checks slowed substantially). But while the change in the headline data was indeed notable, what was far more remarkable was less followed data showing just how reliant on the US government the population has become. We are referring, of course, to Personal Current Transfer payments which are essentially government sourced income such as unemployment benefits, welfare checks, and so on...As of June when total Personal Income was just below $20 trillion annualized, the government remains responsible for over a quarter of all income. Putting that number in perspective, in the 1950s and 1960s, transfer payment were around 7%. This number rose in the low teens starting in the mid-1970s (right after the Nixon Shock ended Bretton-Woods and closed the gold window). The number then jumped again after the financial crisis, spiking to the high teens. And now, the coronavirus has officially sent this number into the mid-20% range, after hitting a record high 31% in April. And that's how creeping banana republic socialism comes at you: first slowly, then fast."

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7.30.20 - Gold Prices Nears $2,000, Is $3,000 Next?

Gold last traded at $1,944 an ounce. Silver at $23.37 an ounce.

NEWS SUMMARY: Precious metal prices took a healthy breather Thursday on mild profit taking amid strong uptrend. U.S. stocks fell sharply as big tech shares declined as investors also digested a record 39.2% drop in GDP.

Gold Price Reached Almost $2,000 Today, Is $3,000 Next? -Forbes
"Gold prices are likely to continue their upward journey as investors know that the gold price has broken significant resistance. This resistance level, formed in 2011, reached an all-time high at $1921. As of today, the gold price is trading at $1967 and has reached as far as $1981. The gold price is up nearly 28% YTD. Gold prices have recorded the longest monthly winning streak since 2012...four consecutive months of gains. We have not seen this kind of momentum since 2012. Gold investors know that gold price has strong momentum. For them, the current rally is only the beginning. With a global dovish monetary policy and the central bank running their money printing machine at full pace, investors hope that the gold price will continue its rally until it touches $3,000 an ounce. From the outset, this may seem bizarre, but with a loose monetary policy in place and a significant stock market crash hiding behind closed doors, the gold price will likely continue its run."

gold chart Is This "Peak Gold"? -Bonner/Rogue Economics
"Here's a Bloomberg headline from yesterday: 'As Gold Smashes Records, Forecasters Ask Whether Peak Is Near' You have to wonder: Who are these forecasters? Where have they been? Do they have any idea what is going on? Gold has its nose in the air. Like a deer in a dry forest, it smells the smoke. It knows it's time to get out of town. On Monday, politicians threw another $1 trillion worth of tinder on the fire. The so-called HEALS Act would bring the deficit for the calendar year (the feds operate on a different 'fiscal' year) to $5 trillion – or about 25% of GDP. To spell it out: More spending = More deficits = More fake-money printing. And more fake money pushes up the price of real money - gold. As long as the money-printing continues, gold will continue to rise....The stock market represents hope for the future...Gold, on the other hand, is more of a reminder of the past… a souvenir of all the plans and projects that never paid out as expected. Stocks are an indicator of giddy greed. Gold is a measure of sober fear. One is hope. The other is reality....So, what do you think?...Is this the 'bottom' for the U.S. economy… and the peak in the yellow metal?....Or is this just the beginning… the first act in a show that will last for years more? Are there whole forests yet to light up… followed by houses, factories, furniture, books… and ballot boxes?....There seems to be more than an even-odds chance that the trends now in motion will stay in motion…until the whole shebang - the economy, politics, and the social system, too - goes up in flames. As for the peak in gold… it is probably still far ahead."

Fed Maintains Stimulus Commitment as Economic Outlook Dims -Wall Street Journal
"Federal Reserve Chairman Jerome Powell said on Wednesday the U.S. economy faces a long road to recovery that will require greater public vigilance to prevent the spread of the coronavirus pandemic and more spending from Congress and the White House. Fed officials didn't announce new policy steps at the conclusion of their two-day meeting Wednesday and reiterated their pledge to maintain aggressive measures to support the economy....The economic backdrop has weakened somewhat since the Fed's rate-setting committee last met seven weeks ago. After surprising rebounds in employment in May and June, many states have seen significant increases in virus infections, leading to renewed curbs on certain commercial activities and a dampening of consumer confidence. Mr. Powell said various data sources the Fed monitors suggested hiring and consumer spending had slowed recently....Mr. Powell warned that even if the reopening of the economy later this year goes well and millions of people return to work, millions of others employed in industries that depend on large gatherings or close proximity indoors could be out of work for a long time."

Revisiting the White Swans of 2020 -Roubini/Project Syndicate
"At the start of the year, when COVID-19 was barely on anyone's radar outside of China, the global economy was entering a fraught phase, facing a range of potentially devastating tail risks. And though the pandemic has since turned the world on its head, all of these threats remain - and some have become more salient....Since February, the COVID-19 outbreak in China did indeed explode into a pandemic, vindicating those of us who warned early on that the coronavirus would have severe consequences for the global economy. Owing to massive stimulus policies, the Greater Recession of 2020 has not become a Greater Depression...Alternatively, with so much uncertainty, risk aversion and deleveraging on the part of corporations, households, and even entire countries could result in a more anemic U-shaped recovery over time. But if the recent surge of COVID-19 cases in the United States and other countries is not controlled, and if a second wave occurs this fall and winter before a safe and effective vaccine is discovered, the economy would likely experience a W-shaped double-dip recession. ....As I predicted in February, the rivalry between the US and four revisionist powers - China, Russia, Iran, and North Korea - has accelerated in the run-up to November's US presidential election. There is growing concern that these countries are using cyber warfare to interfere with the election and deepen America's partisan divisions....Why are financial markets blissfully ignoring these risks? After falling by 30-40% at the beginning of the pandemic, many equity markets have recovered most of their losses, owing to the massive fiscal-policy response and hopes for an imminent COVID-19 vaccine...The problem is that what was true in February remains true today: the economy could still quickly be derailed by another economic, financial, geopolitical, or public-health tail risk, many of which have persisted and, in some cases, grown more acute during the current crisis."

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