February 27, 2020
Things
are accelerating fast, as the markets finally come to the same realization I
reached over a month ago: the coronavirus will have a massive
economic impact that could possibly send the world into a severe recession.
(Charts via google.com)
Even at the time of writing—Thursday, February 27th—markets continue to nosedive, with the S&P 500 Index dropping by 2.25% and the Dow Jones Industrial Average plummeting by 2.41%.
These drops come after days of already-heavy losses, compounding the pain and leading to additional selling by those who are fearful.
To make matters worse, we now have a number of stories hitting the airwaves about how numerous senior officials have contracted the coronavirus, such as the Iranian Vice President for women and family affairs, Masoumeh Ebtekar, and Iran’s former ambassador to the Vatican, Hadi Khosroshahi, who passed away due to the virus.
(Chart via worldometers.info)
As
of today, the total number of coronavirus cases still continues to
climb, reaching 82,758 in total, with 2,817 of these resulting in
fatality, according to official reports.
Many speculate that these numbers are only an estimate, with the real numbers being much higher.
It doesn't end there. The State of California brings additional bad news, announcing today that they are in a state of emergency as they monitor 8,400 people whom they suspect may be infected.
(Chart via goldprice.org)
Meanwhile,
gold bullion, after an initial sell off earlier in the week due to people
needing liquidity, has now found support and is holding its ground thanks to
people purchasing it as a safe haven play.
Unfortunately, as I have been saying for weeks, this situation will likely worsen in the months to come, as the true impact of the coronavirus has yet to be felt.
As people become fearful, they begin to self isolate, travel less, and thus spend less, a death knell for the consumer-based economy we now live in.
If this virus continues to spread at the rate it has, you should expect to see many more violent trading days in our near future, shaving additional trillions off of the markets as they descend lower and adjust for the financial impact that is coming.
Sadly, I believe this is far from over yet and the losses we are now witnessing are just the tip of the iceberg.
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