The COVID Economy In Suspended Animation

7.20.20 - Debt Fatigue is Destroying America

Gold last traded at $1,816 an ounce. Silver at $20.25 an ounce.

NEWS SUMMARY: Precious metal prices rose Monday on rising risk aversion and a weak dollar. U.S. stocks traded mixed as traders weighed the prospect of a potential coronavirus vaccine and more U.S. fiscal stimulus.

Global Macro-Monitor---"Summary: The U.S. economy is not real and in a current state of 'suspended animation.' The COVID rescue package has introduced significant distortions into the economy. The 'Corona Capitalists,' some very well capitalized and liquid corporations, have accounted for a large portion of the loan volume in the Paycheck Protection Program (PPP). Almost 30 percent of renters and homeowners failed to make all or some of their payments in July. The buildup of rental and mortgage payment arrears is a very complicated and potentially menacing problem, threatening the very heart of capitalism, itself. Personal income is up almost 7 percent year-on-year, though wages and salaries are down 6 percent, the result of a 70 percent increase in government transfer payments. Personal savings skyrocketed from 7.9 percent of disposal personal income (DPI) in January to 32.2 percent in April, providing some of the jet fuel for a rocketing stock market. The Fed's digital printing press has financed most, if not all of the increase in the transfers and savings. Markets remain detached from economic reality....It's stunning to us that the markets continue to hold up, choosing to take the blue pill of bliss and ignorance, believing the Wizard of Oz, dressed up as the Federal Reserve, will always be there to bail them out no matter their level of stupidity. Then again, there really are no free markets left after the Fed has effectively nationalized just about anything that moves."