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Authored by Daisy Luther via The Organic Prepper blog,

From the moment lockdowns and serious social distancing efforts began in the United States, the question on everyone’s mind was, “How long will these lockdowns last?”

And it’s not simple impatience. The cost of Covid-19 continues to come as a brutal assault to families across the country. First, there was the money spent preparing for the likelihood of quarantine, and this was followed, for many, by a loss of income. A shocking 3.3 million people had filed for unemployment by last Thursday, something projected less than a week ago and laughed off by many as fear-mongering. The economic ramifications of this virus are not just short-term – they’re long-term too.

It’s psychological, too. Right now, we’re in this strange period of purgatory in which the situation isn’t that bad for a lot of people – outside of a few hotspots, we aren’t seeing the virus in our own backyards. But the inability to plan for something next summer, next month – even next week – is tough on people who are accustomed to being able to map out things like vacations, summer activities for the kids, heck, even a night at the movies with our partners. There’s a sense of overall discomfort which can only be described as grief as we miss out on goals, milestones, and the day to day lives we enjoyed just a couple of short weeks ago.

We want this to end. Now.

And if we can’t have that, we want to know when. When will this limbo known as lockdown be over?

Unfortunately, we’re just getting started.

A few weeks ago, I wrote about when the lockdowns and shelter in place orders would be handed down in the United States, based on the patterns we were seeing in China and in Italy. It turned out to be extremely accurate, so we can use the same general idea of using patterns to attempt to predict what happens next.

Now, keep in mind, there are all sorts of variables. I hate making “predictions because of this. These aren’t “predictions” in a crystal ball kind of way. This is just an analysis of what has already happened and how a pattern is developing. So, my disclaimer is, given the vast array of variables, some of which we’ve probably never even considered, these dates may be entirely wrong. But right now, patterns are all we have to give us an idea of what to expect.

Some of the variables that could come into play are the severity of the lockdown, the population density of the infection hotspots, a surge of civil unrest, a concurrent disaster, and/or the medical systems in the different countries involved. China is a lot more authoritarian than the US and Italy, and they incorporated shocking measures like literally welding people into their apartments.

While things started off rather gently in Italy and the United States, don’t expect it to stay that way.

Italy started off less strictly but has increasingly become tougher on citizens as the cases explode, and we’re seeing harsher measures being instituted across the United States as governors take steps to protect their less-infected states from those fleeing hotspots.

Expect this to continue up to and including martial law if people don’t cooperate with social distancing measures. I’m not saying that this is a good thing or a bad thing – I’m just pointing out that this is reality. If you don’t believe it, read this article about how the cops in Rhode Island are teaming up with the National Guard to go door to door looking for New Yorkers who have fled the city. Right here in the United States of America, boys and girls.

Don’t delude yourself into thinking we’re protected by the Constitution right now. While that should always be the case, know that right now, we’re not.

Some definitions

For the purposes of this article, here are some definitions that I’m using.

• Lockdown: Periods of time with the restriction of movement, closure of businesses, quarantines, and curfews mandated by federal or local governments with varying degrees of enforcement,

• Peak: The plateau in which the number of cases was high somewhat uniformly. Also known as “flattening the curve.”

• Spike:  A brief period during which the number of cases skyrocketed, then returned to the peak.

• Decline: The period of time when the number of new cases began to drop steadily from the peak period.

The charts below are all from Worldometer and show the new cases diagnosed in each country.

I’m not a scientist, a statistician, or a doctor. These are my definitions that I’ll be using throughout the article and I’m sharing them for the purpose of clarity so that we’re all reading from the same songbook.

Here’s how it went down in China.

Keep in mind that I never trusted and still do not trust the numbers coming from China. I’m not basing any of this on their numbers, but on their increases and decreases. If it helps any, I don’t trust the American numbers either. I’m equal opportunity in my distrust.

All we’re looking at here are patterns.

The lockdown of China began on Jan. 22. Within a few days, the lockdown had spread to incorporate millions and millions of people and were quite widespread to some degree or another.

This is Worldometer’s chart for China. The chart begins on Jan. 22, which is not accurate – that was the day that they locked down Wuhan so we know there were a number of cases before that date. But this is the data we have to work with. Again, we’re not focused on the numbers, but on the pattern.

China’s cases hit the plateau that we’re calling a “peak” approximately Jan. 30th. That’s when they hit a plateau that was continued after the peak until cases began to drop off on Feb. 19th. During this time, the cases were being diagnosed hard and fast at a high rate that varied from day to day but stayed in a certain range. This means the peak for China began 8 days after widespread lockdown and lasted for 20 days.

You can see a spike on Feb. 13th and 14th. This can be explained away –  at least in part. China began using a different diagnostic method on the 13th that didn’t require the antigen test. It was faster and easier to diagnose patients at that time. There were 15 thousand new cases that day and this is notable. This spike occurred 22 days after the lockdown began. They only used this diagnostic method for 2 days, then returned to their previous methods of diagnosis. At that time, numbers returned generally to the plateau that we’re calling the peak.

Cases began to decline 21 days after the peak began, on Feb. 19th.

65 days after the lockdown began, Wuhan relaxed to the lockdown: people can leave their homes but are not allowed to leave the city. If all goes well, China plans to reopen Wuhan on April 8th which is 77 days after they first locked down Wuhan.

We’ll learn a lot about our own future when we see how it goes in Wuhan a couple of weeks from now.

Here’s the deal with Italy.

Italy began its regional lockdown on Feb. 21st and it quickly expanded to a widespread national lockdown by March  9th. (source for dates) As I write this, Italy is at day 20 of its lockdown

In the chart below, it appears that Italy began its peak around March 18th, which is 9 days after widespread lockdowns began.

If the same pattern as China holds true, infections will decline but still be in peak until April 20th.

Italy could begin to relax its lockdown as of May 13th. If China does indeed completely lift its lockdown on Day 77 and this works well, then the end of Italy’s lockdown could be June 6th.

Again, there are many variables. For example, on March 28th in Italy (yesterday at the time of writing), tensions arose in Italy as the health emergency became a social emergency. People broke the shelter in place orders, threatening to storm supermarkets because they’ve run out of food. Cries for revolution arose throughout social media and many people have said they will not remain at home, and that they’re out of food and basic necessities.

This could, unfortunately, result in a much longer period of infection as people gather in crowds to protest. It could even result in a spike for Italy around March 31-April 1 that would be similar to China’s spike, albeit for a different reason.

What about the US?

First things first – this is not going to be over in two weeks. If the country reopened again next week or the week after while cases are still climbing, everything we’ve done from this point on will have been in vain. We’re in this social distancing business for quite a while if we want it to work.

Our first major lockdowns began on March 19th. Thirty-three states have closed down non-essential businesses or mandated some type of lockdown since that time.

If we base our timing on the pattern of China, the peak would have begun yesterday, March 28th. We should begin to see the curve flattening out on charts within the next few days.

This peak would last through about April 30th and we could see our worst days on April 10th and 11th, depending on whether we have some kind of unusual variables like both China and Italy have had.

On May 23rd, we could see the lockdowns become more relaxed, and if they go 77 days like Wuhan, then the lockdowns would end on June 6th.

It’s important to note that we still don’t know what the aftermath of the lockdown looks like in China. It could end up that they’ll put another lockdown in place if infections begin to reoccur at a high rate. Personally, I don’t plan to rush out to a crowded mall the moment lockdowns are lifted. I want to wait and see what happens after a week or so first.

To provide an example, several hundred movie theaters in China outside the epicenter of the outbreak reopened on March 23rd, then were abruptly ordered to close on March 27th without further explanation.

The reopening of the United States could also be a start-and-stop process as scientists learn more about Covid-19.

This isn’t a short term event. It’s going to get worse.

I’m not the only person who thinks these measures could last for quite some time. According to Michael Snyder, it will be ongoing and we too could expect to see some civil unrest before this is over.

Of course many Americans are already losing patience and are quite eager to get back to work.

If the “shelter-in-place” orders stretch on for months, it is probably inevitable that we will see civil unrest and rioting like we are witnessing in China right now.

Unfortunately, it appears that vast sections of the country will remain shut down for the foreseeable future. (source)

As in China, there are parts of the country that are far less affected than places like New York City and New Orleans. But every single state has diagnosed Covid within its boundaries and none of the country is unscathed by the measures being undertaken to combat the spread.

And despite the steps that Americans have taken to slow this down, we have the unfortunate distinction of surpassing China as the epicenter of the pandemic. On Thursday, March 26th, 17,224 new cases were diagnosed here and on Friday, there were 19,452 new cases.

Unfortunately, the number of new cases is still climbing. We have not seen the worst of this situation yet. People should be prepared for anything from more stringent lockdowns, supply chain interruptions, and potentially even civil unrest in some areas as the situation drags on.

I know these dates and numbers are probably not what you want to hear. It’s only been ten days and for many, it’s practically unimaginable to live like this for 2 more months, stretching into June. The effect on the economy alone is mindblowing, not to mention the feelings of uncertainty, unrest, and even fear that many people are experiencing.

But if you’re anything like me, you’d rather go into this unknown territory facing reality instead of waiting and wondering.

Elon Musk continues to find new ways to humiliate himself as the coronavirus that he once labeled as “dumb” makes its way around the globe. This weekend’s embarassment du jour was Musk coming out and publicly making the assertion on Twitter that many doctors are afraid of the virus and are unwilling to treat patients for it as a result.

Musk make the off-color snub about healthcare providers in a Tweet thread about how quarantines would result in an inordinate number of toothaches going untreated across the country.

“…many doctors are not treating patients, due to fear of giving or receiving C19,” Musk Tweeted.

Musk’s assertions were met with outrage by social media:

Seriously? @AmerMedicalAssn @AOAforDOs @TwitterSafety @Jack Dorsey, are you really okay with @ElonMusk claiming “many doctors” are not treating patients out of #coronavirus fear?

Wonder how many doctors owns @Tesla stock or cars? Wonder how many will after Musk’s tweet. $TSLA https://t.co/zjgYtxrfBR pic.twitter.com/WN8JHS5Rzt

— KillingMyCareer (@MelaynaLokosky) March 28, 2020

Elon’s claim is that “many” doctors are not going to work out of COVID fear with no data. Not because of lack of PPE or cause they are closed…. due to fear. What a tone deaf thing to say as doctors put their lives on the line. They are heroes. He should clarify or delete

— 🐶Earl of Frunkpuppy🐶 (@28delayslater) March 29, 2020

Meanwhile, Musk, who recently engaged in a fight with Alameda County officials about keeping his Fremont factory open during the midst of the outbreak, might be to blame as the first several coronavirus cases at both Tesla and SpaceX have turned up.

“Two Tesla employees have tested positive for COVID-19, the disease caused by the novel coronavirus, according to an email sent to employees Thursday morning,” BuzzFeed reported late last week. 

Additionally, the LA Times has reported that at least 12 SpaceX employees have been sent home to quarantine after two confirmed cases of the coronavirus were reported at the company’s Hawthorne factory. 

Meanwhile, Musk had also recently Tweeted that kids were “essentially immune” to the virus…

…despite the fact that there have been numerous reports of teenagers “fighting for their lives” on ventilators and passing away from the virus (source and source).

For a cumulative account of all of Musk’s outrageous comments about coronavirus where you can watch them blow up in Musk’s face in real-time, Twitter user @EVdefender has made, and continues to update, this chart documenting some of Musk’s most egregious assertions. 

He also asks a key question: while other accounts, including recently Rudy Giuliani’s, have been suspended for “misinformation” surrounding the virus, why is Elon Musk still allowed to Tweet?

Authored by Dr.Scott Gottlieb via The American Enterprise Institute,

Key Points

• This report provides a road map for navigating through the current COVID-19 pandemic in the United States. It outlines specific directions for adapting our public-health approach away from sweeping mitigation strategies as we limit the epidemic spread of COVID-19, such that we can transition to new tools and approaches to prevent further spread of the disease.

• The authors outline the steps that can be taken as epidemic transmission is brought under control in different regions. They also suggest measurable milestones for identifying when we can make these transitions and start reopening America for businesses and families.

• In each phase, the authors outline the steps that the federal government, working with the states and public-health and health care partners, should take to inform the response. This will take time, but planning for each phase should begin now so the infrastructure is in place when it is time to transition.

Executive Summary

This report provides a road map for navigating through the current COVID-19 pandemic in the United States. It outlines specific directions for adapting our public-health strategy as we limit the epidemic spread of COVID-19 and are able to transition to new tools and approaches to prevent further spread of the disease. We outline the steps that can be taken as epidemic transmission is brought under control in different regions. These steps can transition to tools and approaches that target those with infection rather than mitigation tactics that target entire populations in regions where transmission is widespread and not controlled. We suggest measurable milestones for identifying when we can make these transitions and start reopening America for businesses and families.

In each phase, we outline the steps that the federal government, working with the states and public-health and health care partners, should take to inform the response. This will take time, but planning for each phase should begin now so the infrastructure is in place when it is time to transition.

The specific milestones and markers included in the report for transitioning our responses are judgments based on our current understanding, with the goal of facilitating an effective path forward. The epidemic is evolving rapidly, and our understanding of best responses will evolve as well. The broad set of tasks described here requires and will receive high-level, ongoing attention, and it should be updated and refined as additional evidence, context, and insights about the epidemic become available.

To gradually move away from a reliance on physical distancing as our primary tool for controlling future spread, we need:

1. Better data to identify areas of spread and the rate of exposure and immunity in the population;

2. Improvements in state and local health care system capabilities, public-health infrastructure for early outbreak identification, case containment, and adequate medical supplies; and

3. Therapeutic, prophylactic, and preventive treatments and better-informed medical interventions that give us the tools to protect the most vulnerable people and help rescue those who may become very sick.

Our stepwise approach depends on our ability to aggregate and analyze data in real time. To strengthen our public-health surveillance system to account for the unprecedented spread of COVID-19, we need to harness the power of technology and drive additional resources to our state and local public-health departments, which are on the front lines of case identification and contact tracing. Finally, we must expand our investments in pharmaceutical research and development into COVID-19 and promote the rapid deployment of effective diagnostics, therapies, and eventually a vaccine.

Slow the Spread in Phase I. 

This is the current phase of response. The COVID-19 epidemic in the United States is currently growing, with community transmission occurring in every state. To slow the spread in this period,1 schools are closed across the country, workers are being asked to do their jobs from home when possible, community gathering spaces such as malls and gyms are closed, and restaurants are being asked to limit their services. These measures will need to be in place in each state until transmission has measurably slowed down and health infrastructure can be scaled up to safely manage the outbreak and care for the sick.

State-by-State Reopening in Phase II.

 Individual states can move to Phase II when they are able to safely diagnose, treat, and isolate COVID-19 cases and their contacts. During this phase, schools and businesses can reopen, and much of normal life can begin to resume in a phased approach. However, some physical distancing measures and limitations on gatherings will still need to be in place to prevent transmission from accelerating again. For older adults (those over age 60), those with underlying health conditions, and other populations at heightened risk from COVID-19, continuing to limit time in the community will be important.

Public hygiene will be sharply improved, and deep cleanings on shared spaces should become more routine. Shared surfaces will be more frequently sanitized, among other measures. In addition to case-based interventions that more actively identify and isolate people with the disease and their contacts, the public will initially be asked to limit gatherings, and people will initially be asked to wear fabric nonmedical face masks while in the community to reduce their risk of asymptomatic spread. Those who are sick will be asked to stay home and seek testing for COVID-19. Testing should become more widespread and routine as point-of-care diagnostics are fully deployed in doctors’ offices.

While we focus on state-by-state reopening of activities in a responsible manner and based on surveillance data, we note that states may move forward at a county or regional level if these conditions vary within the state and that coordination on reopening among states that share metropolitan regions will be necessary.

Establish Immune Protection and Lift Physical Distancing During Phase III. 

Physical distancing restrictions and other Phase II measures can be lifted when safe and effective tools for mitigating the risk of COVID-19 are available, including broad surveillance, therapeutics that can rescue patients with significant disease or prevent serious illness in those most at risk, or a safe and effective vaccine.

Rebuild Our Readiness for the Next Pandemic in Phase IV. 

After we successfully defeat COVID-19, we must ensure that America is never again unprepared to face a new infectious disease threat. This will require investment into research and development initiatives, expansion of public-health and health care infrastructure and workforce, and clear governance structures to execute strong preparedness plans. Properly implemented, the steps described here also provide the foundation for containing the damage that future pathogens may cause.

*  *  *

Download the full report here…

 

Last week, Bloomberg finally confirmed what we first reported last December: namely that the return of the Fed’s repo operations, allegedly to “fix” the clogged up repo market, was just a stealthy attempt to prevent a firesale liquidation among massively levered macro hedge funds that had allocated hundreds of billions in regulatory capital to the cash/futures basis trade which had steadily printed money for years and which suddenly went haywire.

In effect, the Fed was bailing out not one but dozens of LTCM-like funds which had all ended up on the wrong side of an extremely popular basis trade, but a handful of funds were exposed the most. To wit, as we explained last December, “hedge funds such as Millennium, Citadel and Point 72 are not only active in the repo market, they are also the most heavily leveraged multi-strat funds in the world, taking something like $20-$30 billion in net AUM and levering it up to $200 billion. They achieve said leverage using repo.”

Bloomberg finally caught up with the narrative last week. In an article discussing how and why the Fed unleashed its March 12 repo bazooka, Bloomberg writes that “when coronavirus panic kicked off unprecedented turmoil in Treasuries last week, hedge fund leverage was lurking” and goes on to “explain” something we said late last year:

The [hedge funds] use borrowed money from the repurchase market for the popular basis trade, which exploits price differences between cash Treasuries and futures. Though individual firms’ borrowing is a closely guarded metric, people familiar with the transactions said some of them levered up as much as 50 times their own wagers. Leveraged funds’ exposure to the basis strategy could be as much as $650 billion, JPMorgan Chase & Co. strategists said.

Does that sound like “the Fed suddenly facing multiple LTCMs”? Because to us it sure does. And more importantly, what happened in the days ahead of last week’s credit market debacle is precisely what happened ahead of the September repo snafu, only with exponentially more destructive power.

“We’ve had 10 years of a perfect paradise and so people have been picking up pennies thinking there’s no risk in holding strategies like the basis trade,” said Kathryn Kaminski, chief research strategist and portfolio manager at AlphaSimplex Group. “A lot of the strategies, like the basis, that hedge funds tend to use don’t work when markets aren’t stable. You’ll see more of these types of blowouts.”

Of course, the Fed’s massive intervention to the tune of up to $1 trillion per day in repo operations, made sure that all hedge funds that were stuck holding to illiquid Off The Run positions in basis, could repo them back to the Fed in exchange for fresh, brand new and far more liquid On The Runs, as the hedge fund industry quietly got another bailout.

So fast forward to last Friday when courtesy of Bloomberg, we got a  update on the performance of the three hedge funds which we identified first in December that were most heavily exposed to the lock up in the repo market, namely Citadel, Millennium Management and Point72 Asset Management, and which were among the funds that struggled in the first half of March as the effects of the Wu Flu pandemic halted the global economy and seized up capital markets.

As Bloomberg explains, “while losses at the largest multi-strategy firms — which invest across a range of assets — were only in the single digits at their peak, the moves were sudden and unexpected, hitting usually dependable trades that use leverage to take advantage of small price differences in related securities. The so-called arbitrage trades were placed on everything from Treasuries to company mergers.”

And then came the Fed’s bailout of well, everything, including billionaire hedge fund managers, as it unleashed an unprecedented series of actions to inject liquidity into markets coupled with Congress’s promise of a $2 trillion economic stimulus package. That combination boosted markets this week – at least temporarily. U.S. stocks had their best three-day run since the 1930s before falling again on Friday.

“Investors can take heart that we’ve counteracted this existential shock with the greatest fiscal and monetary bazooka,” fund manager Paul Tudor Jones said in an interview on Thursday with CNBC. “It’s not even a bazooka — it’s more like a nuclear bomb.”

In the meantime, as part of its nationalization of capital markets, by Friday the Fed had bought $1 trillion worth of Treasuries and mortgage-backed securities since the launch of “QE-Unlimited”, the same amount they bought over eight months during the global financial crisis.

The biggest beneficiary of all this?

Not the economy or the middle class, but the trio of hedge funds which as shown in the chart above have regulatory assets of roughly half a trillion dollars among them, and which managed to quietly offload position that could have otherwise forced their liquidation, a la LTCM.

The end result, after suffering major losses in the first few weeks of the month, Millennium, Citadel and Point72 were all nearly back to breakeven:

• Citadel was down 5.3% for the month through March 20. Its performance has since improved.
• The fixed-income heavy ExodusPoint, run by Michael Gelband, had been down 3%, and is now up slightly on the month.
• Millennium had posted a loss of about 5% through March 20.
• Point72’s losses were around 4% through March 20. The fund had taken a hit from its quant trading group Cubist, which had lost 22%.

Then, in a follow up published on Sunday, Bloomberg reports that the $40BN Millennium (which is levered up to over $200BN in regulatory capital), successfully erased its losses this past week, and is now just down 67 basis point for the month, compared with a decline of 5.1% a week earlier. More impressive is that the fund is now up 17 basis points for the year, just as we predicted it would be last weekend, thanks to what is arguably the most draconian back office of any fund in existence. The fund, which had about 230 portfolio managers running individual teams, gained 9.8% last year and has posted annualized growth of 13.7% over the past three decades.

Millennium Management and most other firms struggled in the first three weeks of March as the effects of the spreading coronavirus virtually halted the global economy and seized up markets from stocks to bonds to commodities.

Then came unprecedented moves by the Federal Reserve and the promise of a $2 trillion stimulus bill that was signed by President Donald Trump on Friday. That combination boosted markets last week, with U.S. stocks posting their best three-day run since the 1930s, before falling again on Friday.

So in light of the above “miraculous” recoveries by the “smartest people in the room”, who occasionally are so smart only a Fed bailout can rescue them, perhaps it’s time to finally remove the clearly obsolete “hedge” designator from the description of this particular bailed out industry.

Then again, not everyone came crawling to the Marriner Eccles building. Unlike the macro basis trade funds noted above, several smaller, more nimble firms actually did not need a Fed bailout,having navigated the first half of March without losses. For example, Dmitry Balyasny’s $6 billion pod-based Balyasny Asset Management made money in March through Monday, climbing 1.1% in the month, and 2.2% for the year, after returning about 12% last year. This year it made money in areas including equities and macro trading, according to a person familiar with its performance. At the same time, $1 billion Cinctive Capital Management, a multi-manager stock fund founded by Rich Schimel and Larry Sapanski, was up about 1% after cutting risk going into March, an investor said. It’s up more than 3% for the year. Verition Group, a $1 billion fund run by Nick Maounis – best known for blowing up Amaranth – returned 2% in the month. It uses less leverage and stays away from crowded trades, according to an investor.

Finally, here are the top and bottom 20 funds are compiled by HSBC through the middle of March; note this table does not capture the sharp rebound in performance observed in the past week.

By now it becoming clear to many that demand for precious metals, as the world ‘turns’, is far outpacing supply as major gold suppliers and sellers exclaim “there is no gold.”

One glance at APMEX pages and two things are immediately clear:

1) There is no gold or silver….

2) And if there is, the premium for physical gold and silver over paper is massive…

Put in context, this 100% premium for silver is shocking (h/t @JanGold_)

And the mainstream media is starting to notice as DollarCollapse.com’s John Rubino points out, The Wall Street Journal just published the kind of article gold bugs dream of… Here’s an excerpt:

Coronavirus Sparks a Global Gold Rush

Epic shortage spooks doomsday preppers and bankers alike; ‘Unaffordium and unobtanium.’

It’s an honest-to-God doomsday scenario and the ultimate doomsday-prepper market is a mess.

As the coronavirus pandemic takes hold, investors and bankers are encountering severe shortages of gold bars and coins. Dealers are sold out or closed for the duration. Credit Suisse Group AG, which has minted its own bars since 1856, told clients this week not to bother asking. In London, bankers are chartering private jets and trying to finagle military cargo planes to get their bullion to New York exchanges.

It’s getting so bad that Wall Street bankers are asking Canada for help. The Royal Canadian Mint has been swamped with requests to ramp up production of gold bars that could be taken down to New York.

The price of gold futures rose about 9% to roughly $1,620 a troy ounce this week and neared a seven-year high. Only on a handful of occasions since 2000 have gold prices risen more in a single week, including immediately after Lehman Brothers filed for bankruptcy in September 2008.

“When people think they can’t get something, they want it even more,” says George Gero, 83, who’s been trading gold for more than 50 years, now at RBC Wealth Management in New York. “Look at toilet paper.”

Worth its weight in Purell

Gold has been prized for thousands of years and today goes into items ranging from jewelry to dental crowns to electronics. For decades, the value of paper money was pinned to gold; tons of it sat in Fort Knox to reassure Americans their dollars were worth something. Today they just have to trust. President Nixon unpegged the dollar from gold in 1971.

Gold is popular with survivalists and conspiracy theorists but it is also a sensible addition to investment portfolios because its price tends to be relatively stable. It is especially in-demand during economic crises as a shield against inflation. When the Federal Reserve floods the economy with cash, like it is doing now, dollars can get less valuable.

“Gold is the one money that can’t be printed,” said Roy Sebag, CEO of Goldmoney Inc., which has one of the world’s largest private stashes, worth about $2 billion.

The disruptions this week pushed the gold futures price, on the New York exchange, as much as $70 an ounce above the price of physical gold in London. Typically, the two trade within a few dollars of each other.

That gulf sparked a high-stakes game of chicken in the New York futures market this week. Sharp-eyed traders started snapping up physical delivery contracts, figuring banks would have trouble finding enough gold to make good and they would be able to squeeze them for cash. That set off a scramble by banks.

Goldmoney’s Mr. Sebag said bankers were offering him $100 or more per ounce over the London price to get their hands on some of his New York gold.

What’s more, there is limited new supply. Mines in countries such as Peru and South Africa are shut down because of the coronavirus. Once-busy Swiss refineries that turn raw metal into gold bars closed earlier this week as the country’s coronavirus cases neared 10,000.

David Smith owns a wristwatch business in northern England and said Tuesday his bullion dealers weren’t taking any more orders. He has been scouring social media for individuals who might sell to him.

“You can’t really get physical gold and silver anywhere at the moment,” he said.

He began investing personally in metals a few years ago after watching videos from Mike Maloney, creator of the website goldsilver.com. Like other online dealers, the site currently has a notice saying products are back-ordered up to 12 weeks and that there is a $1,000 delivery order minimum.

The title of Mr. Maloney’s latest podcast: “Unaffordium and unobtanium.” (The latter has popped up in the plots of science fiction movies).

To sum up:

A pillar of the mainstream financial media just acknowledged gold’s multi-millennia role as a store of value, quoted someone calling it “money,” and noted that since the world left the gold standard, we “just have to trust” governments to maintain their currencies.

The article quotes the CEO of GoldMoney and GoldSilver’s Mike Maloney, and calls gold “a sensible addition to investment portfolios.”

It mentions the divergence between paper and physical prices and attributes it to the same kind of buying panic that has emptied stores of toilet paper. “When people think they can’t get something, they want it even more.”

Now pretend you’re an editor at a city newspaper or regional magazine and you’ve just finished reading the above article. What do you do? You immediately call in one of your finance reporters and tell them to look into this “gold shortage” thing.

So prepare for millions of anxious people to get their first exposure to the gold story, just as the supply dries up.

After receiving a controversial $25 million bailout (which would pay for a lot of respirators), the John F. Kennedy Center for the Performing Arts notified nearly 100 musicians with the National Symphony Orchestra that they won’t receive paychecks after April 3rd, according to the orchestra’s COVID-19 Advisory Committee obtained by the Washington Free Beacon.

“The Covid-19 Advisory Committee was broadsided today during our conversation with [Kennedy Center President] Deborah Rutter,” reads the email. “Ms. Rutter abruptly informed us today that the last paycheck for all musicians and librarians will be April 3 and that we will not be paid again until the Center reopens.”

The email went out to members on Friday evening, shortly after President Trump signed the $2 trillion CARES Act, a stimulus package intended to provide relief to people left unemployed by the coronavirus pandemic. Congress included $25 million in taxpayer funding for the Kennedy Center, a provision that raised eyebrows from both Democrats and Republicans, but ultimately won support from President Trump. The bailout was designed to “cover operating expenses required to ensure the continuity of the John F. Kennedy Center for the Performing Arts and its affiliates, including for employee compensation and benefits, grants, contracts, payments for rent or utilities, fees for artists or performers,” according to the law’s text. The arts organization decided that the relief did not extend to members of the National Symphony Orchestra, its house orchestra. –Washington Free Beacon

“Everyone should proceed as if their last paycheck will be April 3,” the email continues. “We understand this will come [as a] shock to all of you, as it did to us.”

One veteran member of the orchestra (who we suspect forwarded the email to the Beacon) told the outlet that the decision has “blindsided” musicians.

“It’s very disappointing [that] they’re going to get that money and then drop us afterward,” the musician said. “The Kennedy Center blindsided us.”

The cente, which received $41 million from taxpayers in 2019, just completed a $250 million renovation – however it faced insurmountable deficits after shuttering its doors on March 12 due to COVID-19.

Rutter, meanwhile, told the Washington Post that she would forego her $1.2 million salary while the JFK center was closed – while orchestra members bristled at the idea of doing the same.

“While the Union understands that the Kennedy Center has decided to cancel all performances through May 10, 2020 because of the COVID-19 pandemic, those cancellations do not give the Association any contractual basis for failing to comply with the sections of the [agreement],” reads a grievance filed by the orchestra, claiming that the center has violated its contract with members that stipulates members be given at least six-weeks notice before they can stop paychecks.

“There is no provision of our collective bargaining agreement that allows the Kennedy Center to decide to stop paying us with only one week of notice,” the email says. “While we fully expect that an arbitrator would agree that management violated the CBA and that we are entitled to continued salary and benefits, this process takes time.“

Authored by Sven Henrich via NorthmanTrader.com,

Answers

The year is 2020. A new virus is spreading across the planet like a wildfire. More lethal than the flu, highly contagious with no cure. Stocks markets collapse, global economies are shutting down with billions of people quarantined to their homes and millions losing their jobs overnight. What do you do? What DO you do?

While it sounds like the script of a bad disaster movie, it is nevertheless the world we suddenly find ourselves in. If you’d outlined this script to anyone just a couple of months ago nobody would’ve believed you.

But here we are and everyone has to adapt and get on with it.

Everyone searches for answers. Is it a short term thing and a big recovery is just around the corner with the help of unprecedented monetary and fiscal stimulus, or will the monetary and structural consequences be so severe that a larger recession, depression even, is inevitable?

The Big Battle is unfolding right in front of us.

Markets, following the biggest crash off of all time highs since 1929, also just managed the sharpest rally since 1933. A bear market rally similar to many seen during the 2008 crisis?

Or a V shaped bottom similar to December 2018?

A retest of the lows for a “W” bottom, or the beginnings of a much more sinister stair step descent to new lows? Lots of questions, but few answers amid evolving data points that do not offer clarity where the current shock will settle.

Fact is the long term monetary and fiscal consequences of the current interventions will reverberate for years to come. Fact is also the global recession that was already at risk of playing out in 2019, but was delayed by aggressive global central bank action, but has now come to fruition anyways. Sparked by a trigger that has rendered all these policy actions of the past year ineffective and meaningless.

And now the forces of intervention have gone straight the MMT route. I urge caution once again:

This crisis is every MMT proponent’s wet dream.
Don’t let them lead you astray with promises of magic money.
They are even more dangerous than the easy money hacks that have steered us into this latest disaster.

— Sven Henrich (@NorthmanTrader) March 28, 2020

Since the advent of cheap money the crashes are getting worse. 2000 was bad, 2008 was worse and now 2020 is even worse than 2008. The trend is your friend? Not so. The trend suggests ever cheaper money, ever more debt and ever more interventions lead to ever more severe consequences and all is reliant on the forces of intervention to retain their efficacy and double, triple, quadruple down, a proposition whose wisdom is highly debatable.

Many now say the shock will be short lived and the market is a forward discounting mechanism and will look to brighter things to soon to come. If the market is a forward discounting mechanism why did this just happen:

If markets were forward looking they wouldn’t have made all time highs on February 19th.

— Sven Henrich (@NorthmanTrader) March 28, 2020

My view: Flexibility over certitude. Anyone expressing certitude about what will or will not happen has access to information I don’t have or perhaps they are simply projecting of what they would like to see happen.

What I do know is that technicals are working and they help guide us through this complex jungle and I’ll demonstrate that in the video below. But technicals also have to negotiate the complex web of artificial liquidity which is now entering markets to a degree never before seen in human history, even dwarfing the interventions of 2008/2009.

This week’s technical market assessment:

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