Many believe July 2020 was one for the gold history books, but it wasn’t even a top 10 move in gains for gold historically. Gold’s big move to an all-time U.S. dollar high last month was the 23rd-best spot monthly return.
The number of Americans filing for unemployment benefits fell to 963,000 last week, the U.S. Department of Labor reports. The number for the week that ended on August 8 is the lowest since governments began imposing COVID-19 lockdowns in mid-March. It marks the first time the weekly total has been less than a million since then.
Just over a month ago, we argued that rapid and record fiscal stimulus had been a critical driver of the initial V-shaped recovery in consumer spending and therefore that several benefits cliffs could endanger this momentum if government support was removed prematurely (see: “Look Out Below”: Why The Economy Is About To Fly Off A Fiscal Cliff”). The first of those cliffs was hit at the end of July, with the failure to pass additional legislation leading to the expiration of the Federal Pandemic Unemployment Compensation (FPUC) benefits, which have provided qualifying unemployed individuals an additional $600 per week.
With the retail sales report on deck tomorrow morning, traders will be curious to see if consumer spending indeed fizzled in July just as the fiscal cliff discussed earlier hit, and as consumers in impacted states hunkered down.
After the George Floyd protests broke out across major U.S. cities, some mayors and police chiefs were accused of issuing stand-down orders to their police officers. Nightly news streamed video footage of the looting, rioting, and general mayhem that ensued in the absence of a civil order.
The virus-induced recession has resulted in deep economic scarring that will be seen for years. Tens of millions of Americans remain unemployed, broke, and hungry. US bankruptcies of large companies are on pace to hit a 10-year high, with even more devastation seen among smaller firms.
$9 trillion in additional global liquidity (from $79 to almost $88 trillion since the March lows)…
“Copper is way ahead of the fundamentals,” Eugen Weinberg, head of commodities research at Commerzbank, told Reuters, adding that waning demand and oversupply conditions should pressure prices well into a correction (10-15%) from current levels.
International Man: The world has become increasingly unfree. Recently, the global pandemic has justified all kinds of draconian measures by governments.
As noted earlier, silver is crashing as much as 15% today, a plunge which if it had spread to stocks would prompt a panic at the Fed and an injection of at least several trillion. The fact that precious metals do not need a rescue from the Fed – and in fact anything the Fed does do will only send them higher – is probably worth its own take, but for now we will simply look at how we got here, where we are going and update details on the balance sheets of the Federal Reserve, European Central Bank (ECB), Bank of England (BoE), Bank of Japan (BoJ), Reserve Bank of Australia (RBA), and Bank of Canada (BoC) balance sheets, as well as on the programs implemented by each central bank.