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Corona & Debt: A Twin Virus Horror

Stewart Thomson
email: stewart@gracelandupdates.com
email: stewart@gracelandjuniors.com
email: admin@guswinger.com

Feb 11, 2020

  1. To view the only virus more concerning than Corona, please click here now. The global government debt virus!

  2. In America, the government’s debt to GDP ratio is now three times the level it was when Ronald Reagan got elected. Simply put, Donald Trump doesn’t have the wiggle room that “Jellybean Ron” did… to ramp up debt, produce GDP growth with that debt, and then claim all the growth came from tax cuts.

  3. Poor demographics and global de-dollarization put additional pressure on any attempt to use debt to produce growth today.

  4. The good news is that Trump seems aware of the situation, and he’s adding to debt only at a moderate pace.

  5. The bad news is that the absolute level of debt is so high that even moderate increases in debt are producing no additional growth.

  6. The bottom line: Reagan was able to produce a dollar of GDP growth with fifty cents of debt growth. He had great demographics, the biggest rate cutting cycle in US history, and numerous other tail winds at his back.

  7. That’s no longer the case, and the debt clock shows the situation is getting worse every day.

  8. Please click here now. Many gold analysts feel the US stock market is at risk of a crash, and they feel the Corona virus is the black swan that could make it happen.

  9. In contrast, I’m on record stating the dollar is the major market at risk and already in downside play, not the stock market. I see the US private economy as relatively healthy, while government is infected with a horrifying debt virus that threatens to kill the dollar.

  10. Please click here now. Stock market crash enthusiasts should keep a close eye on this key chart.

  11. I’ve highlighted most stock market swoons and it’s very rare for the stock market to crash without a Fed rate hiking cycle in play.

  12. Stock markets aren’t the real economy, although governments like to use them as “poster boys” for growth. The US stock market rises and falls mainly on the actions of the Fed, and the Fed is very dovish now, after throwing in the towel on an attempted normalization of rates.

  13. A stock market decline is possible but not too likely until the Fed begins a fresh hiking cycle, while a continued meltdown of the dollar against gold is a near-certainty. The bottom line:

  14. With Corona “on deck”, is the Fed likely to hike now? No!

  15. Please click here now. Double-click to enlarge this exciting daily gold chart. There’s a flag-like pattern in play, with an upside target of at least $1670.

  16. Tuesdays are generally soft days for the gold price, but I don’t think investors should be concerned about any of the minor pullbacks within the flag pattern.

  17. I view the entire $1570-$1520 zone as a buying area, with a focus on the miners more than bullion.

  18. Please click here now. More government debt and more Fed liquidity just produces more debt rather than growth.

  19. Corporate boards are incentivized to borrow more money to do stock market buybacks rather than invest in business expansion, government talks growth while sinking deeper in debt, and gold outperforms everything.

  20. This is the world of today… and it’s here to stay!

  21. Please click here now. Double-click to enlarge this GOAU ETF versus Dow ratio chart.

  22. Gold stock investors certainly aren’t “missing out” on anything offered by the US stock market. The price action of gold stocks is solid.

  23. The gains from the 2018 summer low to the 2019 summer high have been mostly retained, and against the dollar GOAU looks spectacular.

  24. On that note, please click here now. Investors should buy the $15 area, buy a breakout over $18, but right now the operational word is… enjoy!

Thanks!

Cheers
st

Feb 11, 2020
Stewart Thomson
Graceland Updates
website: www.gracelandupdates.com
email for questions: stewart@gracelandupdates.com
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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am. The newsletter is attractively priced and the format is a unique numbered point form; giving clarity to each point and saving valuable reading time.

Risks, Disclaimers, Legal
Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

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