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3.27.20 - That Discomfort You're Feeling Is Grief

Gold last traded at $1,622 an ounce. Silver at $14.53 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Friday on safe-haven buying and a weaker dollar. U.S. stocks resumed their historic decline, capping off another volatile week on Wall Street.

$1.2 Billion Fund Makes the Case for Gold -Barrons
"Matthew McLennan owns gold bullion because the future - now more than ever - is uncertain. 'If we knew what the future held, we'd probably have either all equities or all gold. But to recognize the limits of your knowledge is an important reason to own gold,' says McLennan, co-portfolio manager of the $1.2 billion First Eagle Gold fund....With the Federal Reserve and other central banks slashing interest rates and taking other steps to support markets, the yellow metal surged to levels not seen since early 2013 on Tuesday. The monetary policy response and Congress' $2 trillion stimulus plan 'are the best thing that can happen to gold in the long-term,' co-portfolio manager Thomas Kertsos says...'It's very hard to imagine that we are going to get out of this without inflationary or deflationary consequences, which opens risks and opportunities for the absolute and real price of gold going forward.'....Physical gold is the fund's top holding, setting it apart from other gold mutual funds. Also unique is the managers' silver bullion position, a top-six holding."

coronavirus How the Pandemic Will End -Yong/The Atlantic
"Three months ago, no one knew that SARS-CoV-2 existed. Now the virus has spread to almost every country, infecting at least 446,000 people whom we know about, and many more whom we do not. It has crashed economies and broken health-care systems, filled hospitals and emptied public spaces. It has separated people from their workplaces and their friends. It has disrupted modern society on a scale that most living people have never witnessed. Soon, most everyone in the United States will know someone who has been infected. Like World War II or the 9/11 attacks, this pandemic has already imprinted itself upon the nation's psyche....The testing fiasco was the original sin of America's pandemic failure, the single flaw that undermined every other countermeasure....Basic protective equipment, such as masks, gowns, and gloves, began to run out. Beds will soon follow, as will the ventilators that provide oxygen to patients whose lungs are besieged by the virus....As of last weekend, the nation had 17,000 confirmed cases, but the actual number was probably somewhere between 60,000 and 245,000. Numbers are now starting to rise exponentially: As of Wednesday morning, the official case count was 54,000, and the actual case count is unknown....To avert a worst case scenario, four things need to happen - and quickly. The first and most important is to rapidly produce masks, gloves, and other personal protective equipment. If health-care workers can't stay healthy, the rest of the response will collapse....The second pressing need: a massive rollout of COVID-19 tests....The third need is social distancing. Think of it this way: There are now only two groups of Americans. Group A includes everyone involved in the medical response, whether that's treating patients, running tests, or manufacturing supplies. Group B includes everyone else, and their job is to buy Group A more time....The fourth urgent need: The importance of social distancing must be impressed upon a public who must also be reassured and informed....There are only about 180,000 ventilators in the U.S. and, more pertinently, only enough respiratory therapists and critical-care staff to safely look after 100,000 ventilated patients....There are three possible endgames: one that's very unlikely, one that's very dangerous, and one that's very long. The first is that every nation manages to simultaneously bring the virus to heel, as with the original SARS in 2003....The second is that the virus does what past flu pandemics have done: It burns through the world and leaves behind enough immune survivors that it eventually struggles to find viable hosts....The third scenario is that the world plays a protracted game of whack-a-mole with the virus, stamping out outbreaks here and there until a vaccine can be produced. This is the best option, but also the longest and most complicated....The lessons that America draws from this experience are hard to predict....One could envisage a future in which America learns a different lesson. A communal spirit, ironically born through social distancing, causes people to turn outward, to neighbors both foreign and domestic."

That Discomfort You're Feeling Is Grief -Harvard Business Review
"Some of the Harvard Business Review edit staff met virtually the other day - a screen full of faces in a scene becoming more common everywhere. We talked about the content we're commissioning in this harrowing time of a pandemic and how we can help people. But we also talked about how we were feeling. One colleague mentioned that what she felt was grief. Heads nodded in all the panes. If we can name it, perhaps we can manage it. We turned to David Kessler for ideas on how to do that. Kessler is the world's foremost expert on grief. He co-wrote with Elisabeth Kübler-Ross On Grief and Grieving: Finding the Meaning of Grief through the Five Stages of Loss. His new book adds another stage to the process, Finding Meaning: The Sixth Stage of Grief. Kessler shared his thoughts on why it's important to acknowledge the grief you may be feeling, how to manage it, and how he believes we will find meaning in it. HBR: People are feeling any number of things right now. Is it right to call some of what they're feeling grief? Kessler: Yes, and we're feeling a number of different griefs. We feel the world has changed, and it has. We know this is temporary, but it doesn't feel that way, and we realize things will be different...We are not used to this kind of collective grief in the air....HBR: You said we're feeling more than one kind of grief? Kessler: Yes, we're also feeling anticipatory grief. Anticipatory grief is that feeling we get about what the future holds when we're uncertain. Usually it centers on death. We feel it when someone gets a dire diagnosis or when we have the normal thought that we'll lose a parent someday. Anticipatory grief is also more broadly imagined futures. There is a storm coming....HBR: What can individuals do to manage all this grief? Kessler: Understanding the stages of grief is a start...There's denial, which we say a lot of early on: This virus won't affect us. There's anger: You're making me stay home and taking away my activities. There's bargaining: Okay, if I social distance for two weeks everything will be better, right? There's sadness: I don't know when this will end. And finally there's acceptance. This is happening; I have to figure out how to proceed. Acceptance, as you might imagine, is where the power lies. We find control in acceptance. I can wash my hands. I can keep a safe distance. I can learn how to work virtually....HBR: What do you say to someone who's read all this and is still feeling overwhelmed with grief? Kessler: Keep trying. There is something powerful about naming this as grief. It helps us feel what's inside of us...It's absurd to think we shouldn't feel grief right now. Let yourself feel the grief and keep going."

Campaign 2020: The Show Must Go On -Rove/Wall Street Journal
"The Covid-19 crisis has upended life in America, including the presidential campaign. Both former Vice President Joe Biden and President Trump face new strategic challenges, and the country is watching. As the U.S. rightly turned from primaries to quarantines, Mr. Biden was naturally sidelined. His first move to resist was to convert his home's rec room into a studio, so he can appear on cable-TV shows. It wasn't enough. His speech on Monday was vague and flimsy, marred by a malfunctioning teleprompter and a meandering discourse on the 1940s....Mr. Biden hasn't yet grasped that as the presumptive Democratic nominee, he's already the party's leader. He mistakenly left the drafting of his party's Covid-19 stimulus bill to Nancy Pelosi and Chuck Schumer in Congress....Mr. Biden must also decide soon whether to keep moving left or emphasize that he's a more centrist Democrat. Picking the first course would suggest that he believes victory this fall depends on mobilizing Sen. Bernie Sanders's backers by agreeing with many of the Vermonter's views. Picking the second would indicate that he thinks the key to victory lies with suburbanites who swung to Democrats in 2018, and that he'll get the Bernie vote by being the alternative to Mr. Trump, not the instrument to enact a socialist agenda....The coronavirus crisis presents Mr. Trump with a bigger potential upside, and downside. Americans don't blame presidents for unforeseen emergencies but do judge how they respond. Presidents must not only execute a broad, effective response over time, but also speak to people's concerns and aim for unity....Voters won't hold Mr. Trump responsible for a slowdown right now, but they will react negatively afterward - unless he strikes an optimistic tone and offers a robust package of measures to restore prosperity....Americans are watching the president and Mr. Biden intently, taking the measure of both men. The defining moments of this crisis have yet to come, but when they do, the outcome of the presidential race will hang in the balance."

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3.26.20 - As Hyperinflation Risk Looms, Buy Gold

Gold last traded at $1,652 an ounce. Silver at $14.70 an ounce.

NEWS SUMMARY: Precious metal prices rose on safe-haven buying after jobless claims spiked to a record high. U.S. stocks rose for a third day despite downbeat unemployment data on rising investor hopes.

Coronavirus hyperinflation risk looms, buy gold -Schiff/Fox Business
"The extreme measures taken by the U.S. government and the Federal Reserve to combat the COVID-19 pandemic could push the U.S. into an episode of hyperinflation and boost gold, according to Peter Schiff. The White House and the Senate reached a $2 trillion deal early Wednesday on the third phase of a relief package that extends cash to the individuals, small businesses and corporations that were hit hardest by economic fallout from COVID-19. On top of that, the Fed said earlier this week it would buy unlimited amounts of assets to support market functions and the economy. The central bank has also cut rates to nearly zero to ease lending conditions....'What the Fed is doing is extremely bearish for the U.S. economy,' Schiff, CEO of Westport, Connecticut-based Euro Pacific Capital, told FOX Business. He added that hyperinflation, or extremely high and worsening inflation, is 'very much on the table,' and that a complete destruction of the U.S. currency would be accelerated if the world 'dumps the dollar as a reserve.' Schiff is not alone in suggesting that hyperinflation is a potential consequence of resorting to helicopter money. Deutsche Bank macro strategist Oliver Harvey says that while the policy response to COVID-19 is 'very similar' to the 2008 financial crisis, today's calamity is 'very different.'....For Schiff, the winner is clear: gold. The precious metal's price, he says, should be up 'a lot more' than just the 9.5 percent it has gained since the Fed launched its massive asset purchase program on Monday."

route65 Coronavirus Shock Is Destroying Americans' Retirement Dreams -Bloomberg Quint
"For older people, the coronavirus crisis has been an appalling shock. Many can't travel or see grandchildren. Even buying groceries is a risk. Their life savings are melting as the global economy shuts down and financial markets plummet. The pain may be particularly acute in the U.S., where Americans rely on a retirement system that was broken well before a pandemic dashed it to pieces. Almost half of U.S. households 55 and older have nothing saved for retirement. Many of the rest were already doing worse than earlier waves of retirees. After a 40-year-long shift from traditional pensions to individual 401(k) retirement accounts, Americans' financial security is now defenseless against whatever crisis comes along....The more time Americans spent in the 401(k) system, the less they were managing to save. The prime culprit, researchers concluded, was the Great Recession, which hit the 401(k)-reliant late boomers harder than older cohorts....Now, another economic shock is putting livelihoods and retirement savings in jeopardy. The ultimate damage is impossible to predict, with U.S. stocks more volatile than anytime since the start of the Great Depression....Social Security can be credited with creating the very notion of retirement. For centuries before the program was launched in 1935, only the wealthy could afford to stop working. As the U.S. recovered from the Great Depression and then boomed, a new retirement system for the middle class took root....The losses for retirement savers depend on how exposed they were to stocks."

Coronavirus Is Making Business Leaders Rethink the Rules of Capitalism -Worth
"Fifty years after economist Milton Friedman sternly admonished society that the sole business of business is profit, business is rethinking that adage with support from business schools. Business schools have long embraced the belief that shareholders are the 'owners' of the company and profits should be maximized to benefit them, and have taught accordingly. So it is only fair that business schools, which play the dual role of educating the next generation of business leaders while also undertaking research that informs current corporate decision-making, help design the next chapter of capitalism. The coronavirus crisis brings the issue home: Should well capitalized companies lay off workers (which would benefit shareholders) or should they figure out how to support their workers and society while managing a radically changed world?....There are a growing number of degrees and specializations in corporate sustainability and sustainable finance. These programs include focused-programs like the eight-year-old MBA in Sustainability at Bard College and long-standing dual-degree programs at Yale, Michigan and Duke wherein students can pursue an environmental studies masters and an MBA....Outside of the classroom, sustainability is permeating extra-curricular and co-curricular activities...With business leaders calling for a more responsible capitalism, they will need business schools to train the next generation of leaders in new skills and illuminate the way forward through academic research."

During coronavirus, the free market is coming through when we need it most -Washington Examiner
"This weekend, we received a package at our front door. My mother, in Kansas, found an educational kit for my three daughters on Amazon, purchased it, and had it shipped to our house. Under normal circumstances, that might have been considered merely a nice gesture from a grandmother. However, during our period of social distancing and isolation, it was a gift not just from a caring grandmother who was able to shop from home but also from Amazon, the warehouse workers, and the delivery people who had a role in delivering the gift. I spend most of my time advocating for doctors, inventors, and a free market. Both doctors and inventors are rightfully being celebrated for their role in helping combat this pandemic. But the free market is also coming through when we need it most....Amazon isn't the only company that should be celebrated. Like Amazon, grocery stores aren't being staffed by the military - they are being staffed by the same employees who worked there before the pandemic. They aren't open by order of the government. They are providing a service that we all need, a service that also helps to alleviate panic....These are the stories that we need to remind ourselves of when we come out of this and hear calls for more government....We took the tiger by the tail when we shut down the economic engine. But as tough as figuring out how to let go of the tiger is, it is what comes next that might be the hardest part. There are two ways that this can go. Either the government can take a bigger role in the economy and growth can move at the speed of bipartisanship (there is none right now), or we can rely on entrepreneurs to spring into action, feel out the new normal, and grow the economy. The front line of people helping us now is the same that will bring us out....The economy is stopped, but America is not. In fact, as long as the government stays out of the way and possibly provides some financial assistance, we appear ready to pounce once everything is safe to restart."

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3.25.20 - Get Ready for $2,500 Gold This Summer

Gold last traded at $1,634 an ounce. Silver at $14.64 an ounce.

NEWS SUMMARY: Precious metal prices eased Wednesday following a historic government economic stimulus plan. U.S. stocks rose in anticipation of a coronavirus stimulus deal.

Get ready for $2,500 gold price this summer -B. Riley FBR/Kitco
"Massive gold price revisions are hitting the market this week as analysts estimate the impact of the COVID-19 crisis, with one investment bank upping its Q3 and Q4 gold price forecasts to an impressive $2,500 an ounce. Citing unprecedented fiscal and monetary policy stimulus, B. Riley FBR analysts said on Tuesday that they expect gold to surge to $2,500 an ounce in Q3 and continue to trade at those levels in Q4. 'It has not been our practice to forecast gold price,' wrote B. Riley FBR’s analysts. '[But] due to our conviction in rising gold prices, we are meaningfully raising our gold price deck … to $2,500/oz in 3Q20 … and we feel compelled to align our 12-month price targets to this view.' The main driver will not be a potentially deep recession or another major drop in equity markets, but extremely low rates along with 'unprecedented fiscal and monetary stimulus,' the analysts said....'During such a gold price ascent, gold will be the best performing asset class, and gold related equities will be the best performing equity sector,' they wrote."

central banks Federal Stimulus Expansion Will Lead to More Economic Crises -Bonner/Bonner & Partners
"We are in the deflationary stage now… when the bubble pops and asset values are suddenly marked down to where they should have been in the first place. But what comes next? Is that all there is to it? Alas, the answer is simple: No… There's much more to come... The economy… how it reacts to the C virus… and the feds' own response - all are matters of politics...We're not talking about Democrats against Republicans… but about the whole realm in which things are decided not by voluntary win-win compromises, but by the intrusion of the feds in one form or another. We have seen, over the last 20 years, how the feds queered the economy...Fake money and fake interest rates gradually undermined the economy's immune system....In short summary, they created a 'just-in-time' economy, where everyone - from ordinary householders, gig workers, corporate chiefs, and the feds themselves - believed that the supply of money and credit were essentially unlimited....Real money - like real time and real skills and real resources - is not unlimited. And when the limits are passed, bad things begin to happen...First, the feds get more power simply because they are the ones handing out the money. The latest stimulus bill, calls for $2 trillion of giveaways...The little guys will get $1,200 each, or a total of only about $300 billion....Of course, the government has no money. It is already running trillion-dollar deficits. All it can do is print more money - inflate - to pay for these bailouts, giveaways, and stimulus efforts. Inflation then infects everything… and always leads to more government power."

Record $2 Trillion Stimulus Risks Falling Short -Bloomberg
"Shortly after midnight Wednesday, the White House and Democratic lawmakers said they reached agreement on a $2 trillion bill aimed at limiting the economic hit of the outbreak. The Senate may vote later in the day; it would still need to clear the House and be signed by President Donald Trump. Even with a price tag that represents about 10% of the nation's total output, not all Americans who may need direct payments will receive them, and timing remains an issue. The bill - the third phase of coronavirus aid from Congress - was tweaked after House Democrats proposed their own $2.5 trillion version....Further stimulus will be needed in coming days and weeks to further bolster the economy and leaders should begin working on that now, according to Jason Furman, a member of Barack Obama's economic team during the 2008 recession. 'I've never seen Congress move so fast to do something so large. Unfortunately, the problem may be larger and faster,' Furman said....For individuals, the package provides direct payments to lower- and middle-income Americans of $1,200 for each adult, as well as $500 for each child....The payment amount doesn't apply to those making more than $75,000, just above the nation's median household income....Trump indicated the checks would go out by April 6, according to Senate Democratic leader Charles Schumer, but during the prior recession, it took about two months for those to go out."

Finding Community and Cheer at Home -Readers/New York Times
"Many of us are now entering the second, third or fourth week of restrictions on our movements, and it is becoming ever clearer that overcoming this crisis will be a marathon, not a sprint. As we all collectively adjust to our unique situations, we asked New York Times readers to share their ideas for pursuing the traveler's spirit of discovery, curiosity and delight within their new limitations at home. Following are their responses, which have been edited for clarity and length. 'An artistic exercise in patience' - 'As a child, I was taught ink drawing and I rediscovered my love for it...It helped me through a difficult time in life where I felt very anxious about not understanding what's happening around me.' - Andre Williams, Montreal, Canada...'Painting landscapes of where I want to go once the virus is no longer a threat.' -@ameliekurlander, via Instagram...'Support small businesses where you can' - 'For those of you who are able to be on staycation, please consider doing some online shopping at independent stores and ordering take out from independent restaurants.'- Elaine, Atlanta...'Beethoven, via Berlin' - 'The Berlin Philharmonic, for instance, kindly offers concerts on their Digital Concert Hall website free of charge'.- Neo Hung, Hong Kong...'Look to the stars' - 'Download the SkyView app to your phone to view distant constellations, nearby planetary objects and more!' -Caroline Pedro, Seattle....'Take stock. Breathe'. 'Take a daily walk and notice the beauty. Deep breathing before getting up and before going to bed. This will last a long time, but not forever.' -Robin Weintraub, Rochester, New York."

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3.24.20 - Time to Buy the Currency of Last Resort -Goldman Sachs

Gold last traded at $1,665 an ounce. Silver at $14.26 an ounce.

NEWS SUMMARY: Precious metal prices rocketed higher for a second day Tuesday in response to rising Fed-induced inflation fears. U.S. stocks rebounded from three-year lows as investors hoped U.S. lawmakers were close to a stimulus bill agreement to rescue the economy from the damage caused by the coronavirus.

'Time to buy the currency of last resort' -Goldman/CNBC
"Gold prices jumped more than 6% on Tuesday, putting the precious metal on track for its best day in 11 years, and Goldman Sachs believes the Federal Reserve’s latest stimulus package will prompt investors to seek out the safe-haven asset and drive prices even higher. 'Time to buy the currency of last resort,' Jeffrey Currie, Goldman Sachs' global head of commodities research, succinctly summed up in a note to clients Monday night. Gold has gained more than 12% in the last two days as the Federal Reserve on Monday pledged unlimited asset purchases to support the markets. Prices are rallying as investors believe gold will be the best alternative as central bank actions lead to currency debasement and possible inflation."

uncertainty Risk, Uncertainty and Coronavirus -Schrager/Wall Street Journal
"The government response to the coronavirus pandemic has seemed chaotic - underreaction one minute, piling on restrictions the next. It has left many wondering whether anyone is weighing the trade-offs. Do heavy-handed measures carry the benefits to justify the considerable costs? The uncomfortable answer: We don't know. The novel coronavirus appears at first to be a problem of risk management. It is a dangerous disease that threatens the lives of our neighbors and loved ones. Our response - increased social distancing, shutting down businesses - is aimed at reducing that risk. But the problem isn't risk so much as uncertainty...The future is unknowable, but risk is measurable. It can be estimated using data, provided similar situations have happened before. Uncertainty, on the other hand, deals with outcomes we can't predict or never saw coming. Risk can be managed. Uncertainty makes it impossible to weigh costs and benefits, such as whether reducing the spread of a virus is worth the cost of an economic shutdown that could last several months. The most responsible course of action is to assume the worst and take the most risk-averse position. Managing uncertainty is expensive: In markets, it means holding cash; in society, it means shutting down....This uncertainty makes it much harder to manage the virus, or to strike a balance between public health and the economy...The goal should be to move from uncertainty to risk, which will take time and data. The way forward is testing as many people as possible - not only people with symptoms....More testing would also help spare the world from future shutdowns if the virus reappears before there is a safe, effective vaccine....Policy makers should throw as much energy as possible into getting accurate data. That would allow the world to assess the real risk of the coronavirus. This may lead us to continue to take drastic action to limit its spread, or it may allow us to temper our response, managing the risk at a much lower cost to both society and the economy."

Armies are mobilizing against the coronavirus -The Economist
"Two weeks ago Xi Jinping, China's president, made a triumphal visit to Wuhan, capital of Hubei province, ravaged by covid-19, to declare that the virus had been 'basically curbed'. His first stop was a hospital built at breakneck speed and run by the People's Liberation Army (PLA). Now armies across the world are temporarily putting down their guns and playing a frontline role in the war against the virus. That will ease the burden on overwhelmed civilians, but it may have far-reaching implications for the forces' military proficiency. In Italy and Spain, where death rates have spiraled upwards in recent weeks, thousands of soldiers have been deployed to quarantined cities to patrol the streets and enforce lockdowns....Many countries are uncomfortable with state-mandated lock downs, enforced by gun-toting soldiers. But they have found other uses for their soldiers. Armed forces are good at mounting big logistical operations at short notice. They have lots of pliant manpower and heavy vehicles, and expertise in moving large amounts of stuff from one place to another. On March 19th Britain, which has thus far taken a laxer approach to the enforcement of social distancing than Italy or France, announced a new 'COVID support force', which will comprise over 20,000 personnel, bolstered with reservists...On March 22nd National Guard (ie, reservist) units in three states - California, New York and Washington - were deployed to perform similar duties. Armed forces are also well placed to help out overloaded health-care systems. For one thing, they often have large stockpiles of vital medical kit. The Pentagon has promised to hand over 5m respirator masks and 2,000 ventilators to civilian authorities....It is understandable that overwhelmed states want to mobilize their armies for policing, logistics and medicine. But armed forces are designed first and foremost for killing people, rather than issuing fines on street corners or delivering food to supermarkets. And covid-19 will affect military preparedness, both directly and indirectly....Troops may be distracted and diverted, but war does not pause for viruses."

The Bright Side: Coronavirus Is Bringing Communities, Couples Closer Together -Study Finds
"It's hard not to feel at least a little down these days. The coronavirus is absolutely dominating the headlines and our lives, and most of the stories aren't exactly positive. If you're looking for a silver lining in all this, a recent survey of 2,000 residents in the United Kingdom has identified a few unexpected benefits of the COVID-19 situation. In this modern age, it's become increasingly common for neighbors and community members to ignore each other and almost never speak. Well, 25% of respondents agree the coronavirus outbreak has led to conversations with neighbors (at a safe distance, of course) who they hardly knew at all before a few weeks ago. Additionally, 64% believe that COVID-19 has brought their community closer together in a variety of ways....30% of respondents have started checking in on their older relatives and 23% are doing the same for neighbors in need. A full third of survey participants have started grocery shopping for neighbors and family members who are unable to leave the house. Meanwhile, other people have donated to a food bank (13%), volunteered for a charity (10%), or decided to patronize a small business instead of a larger chain store (28%)....Besides broader communities, the coronavirus situation has also led to families and partners seeing a whole lot more of each other. While there is, of course, the possibility of getting on one another's nerves, 49% of survey participants believe that self-isolating will bring them closer to their partner. In all, two-thirds say they are seeing their significant other much more than usual due to COVID-19 measures such as working from home, self-isolation, or social distancing."

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