The Dow Jones Index closed the week down 5.38% from its last all-time high of July 15th, a month ago. But looking at the Dow Jones as Mr Bear does in the BEV chart below, with every new all-time high registered as a 0.0%, or BEV Zero, and all other daily closings as a percentage decline from their last all-time high, comes short of displaying what has happened in the stock market since July 15th.
In this interview Max Keiser and Egon von Greyerz discuss the enormous pressures in the financial system and the coming stampede into gold. Also:
- The final phase of the currency race to zero has just started
- Massive energy in gold, built up over the last 6 years
- Gold will break its all-time high of $1920, without effort
- Gold hit new all-time highs in many currencies. Now on its way to at least $10,000 or even $50,000
- Central banks panicking over global banking system
- Negative rates – Government bonds, world’s most risky investment
- At some point, investors will dump overvalued bonds, resulting in hyperinflation and implosion of bond market
- Dow Jones stock index, will face a vicious fall very soon and in years to come
HERE IS THE INTERVIEW:
This week the Dow Jones saw above average volatility, especially early in the week, but on Friday closed only 3.92% from its last all-time high.
The Dow Jones in the table below (#10) was down 6% at Monday’s close, but recovered as the week progressed to Friday’s close, and that was the story for the rest of the indexes in the table too.
By Mike Gleason – Re-Blogged From Gold Eagle
What a wild week it’s been for investors.
The threat of global trade wars and currency wars sparked big swings across all major asset classes. Bond yields dove toward historic lows. Stocks plunged earlier in the week before rebounding sharply by Thursday. And precious metals rode a huge safe-haven wave higher.
Gold prices eclipsed the $1,500 level on Wednesday for the first time in over six years. Meanwhile, silver price pushed above $17 an ounce to record a one-year high. Both metals are up over 4% for the week.
The money metals are becoming increasingly attractive as President Donald Trump ramps up his battles against China abroad and the Federal Reserve at home.
The US stock markets are becoming more unstable, fueling mounting anxiety about what’s likely coming. After surging to new all-time-record highs in late July, stocks plunged in a sharp pullback as the US-China trade war escalated. Stock markets’ resiliency in the face of bearish news is partially determined by how companies are faring fundamentally. The big US stocks’ just-reported Q2’19 results illuminate these key indicators.
Four times a year publicly-traded companies release treasure troves of valuable information in the form of quarterly reports. Required by the US Securities and Exchange Commission, these 10-Qs and 10-Ks contain the best fundamental data available to traders. They dispel all the sentiment distortions inevitably surrounding prevailing stock-price levels, revealing corporations’ underlying hard fundamental realities.
Growing evidence of a severe global recession is sure to provoke more aggressive monetary policies from central banks. They had hoped to have the leeway to cut interest rates significantly after normalising them. That hasn’t happened. Consequently, as the recession intensifies central banks will see no alternative to deeper negative nominal rates to keep their governments and banks afloat through a combination of eliminating borrowing costs and inflating bond prices. It will be the last throw of the fiat-money dice and, if pursued, will ultimately end in the death of them. Gold and bitcoin prices are now beginning to detect deeper negative rates and the adverse consequences for fiat currencies.
Central banks face a dilemma: how can they cut interest rates enough to stop an economy sliding into recession. A central banker addressing it will note that the average cut required to put an economy back on its feet is of the order of 5%, judging by the experience of 2001/02 and 2008/09 and what their economic models tell them. Yet, in Euroland the starting point is minus 0.4% and in Japan minus 0.1%. In the US it was 2.5% before the recent reduction and in the UK 0.75%. The solution they will almost certainly favour is deeper negative nominal interest rates.
Breaking News: COMEX paper gold contracts closed on Wednesday, August 7, at $1,513, up from $1,274 on May 22. Gold bottomed at $1,045 in December 2015. The S&P 500 Index closed at a new all-time high on July 26.
Gold closed at its highest price since 2013.
What Happens Next?
- We don’t know. Gold has disappointed for years, but central banks must “inflate or die.” Expect more QE, lower interest rates and excessive political and central bank manipulations.