“Bring out your dead…Bring out your dead”

As the doom and gloom merchants continue to shout Bring out your dead…bring out your dead I remember the old Monty Python movie The Holy Grail, and the following scene,

Click Image for a chuckle

During the Wuhan Virus epidemic, I have been reporting almost weekly that the virus is not going to affect the USofA other than economically. Will people get sick? Yes, they will. Heck the CDC has reported that there has been between 20,000 to 52,000 deaths from October 1, 2019 to February 29, 2020 here.  In comparison, there is only 22-deaths at this writing due to the nCoV-2019 virus here. And most of those folks had underlying medical issues. Let’s put things in perspective folks.

I have predicted that precious metals will rise as people move their money from the stock market and other commodities to a holding bucket; Consequently, gold is up to $1,674- an ounce at this writing which is a rise of ~$100- in the past 30-days. Silver is down about $1- during the same period to $17.17 an ounce.

The stock market is off its high of 29,277 30-day’s ago to today at 24,065, a 18% fall. Let’s look at why.

The initial decline of the stock market and crude prices along with the rise of the gold price is certainly due in a large part to the Wuhan Virus – Maybe as much as 50%. The USofA along with many global markets have way too many eggs in the China basket and it will affect all of us due to JIT (Just In Time – Inventory/Manufacturing). With China being off normal manufacturing levels by 50%, they do not need the same levels of fuel to run their plants. It’s the old Supply and Demand phenomenon. Oil and other fuels will predictably drop. I have already seen it at my local gas stations where prices have dropped 14¢ a gallon in the last two weeks.

The next chunk of why we are seeing the jittery market is correction. We all know that the market was over valued and what we are seeing is a stiff correction in combination to the virus. It was bound to happen, and I am glad it is happening now rather than in October of this year. One month or so before the Presidential election in November.

The last item that we all need to be aware of is; Saudi Arabia has decided to stop controlling the output of their oilfields – They are opening the spigots sort to speak. Again, supply and demand determine the price and availability. As the supply increases even more, crude is going to drop in price. Crude was $54- a barrel 30-days ago and today at this writing it is $41- a barrel. Why are the Saudis doing this you might ask? Well because the world’s economy is screwy, and they figure what a great time to stick it to the Russians and Iranians. Remember, the Iranians are fighting the Saudis via a proxy war in Yemen while the Russians have their hands under the Iranians saroual’s.

Let’s all remember that the Wuhan Virus along with other winter nasties will burn itself out as we move quickly into spring weather patterns. Once that happens hang on as the market is going to explode and gold will most likely drop down to the low $1,600’s. Oil will rise again but not in time for you to not see welcoming price drops at the petrol pumps just in time for summer travel.

With all of that written, you still need to take stock of your 3B’s and make smart additions in case you find yourself laid-off for a short period while China regroups. I still am recommending that you have one month of expenses on hand in cash just in case. Do not worry about over buying to much on certain items as you will then be ahead of the curve when the nasties start up again in October of 2020.  And yes folks with a new one called the Wuhan Flu.

Freedom Through Self-Reliance®

 

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5 Comments

  1. vyt1az March 10, 2020 at 21:48

    I agree, the death rate really doesn’t give the whole picture.

    With that being said, I’m not so sure that the concern is really unwarranted. nCoV-2019 is an order of magnitude more contagious than the Flu. We’ve got 100yrs of Flu statistics and not even a year for nCoV-2019.

    Even if a tiny fraction of the US gets it, it will have a significant impact on the economy.

    There are 329,227,746 people in the US.

    82.3% of the population is in an Urban or Suburban area which is approximately 270,954,435 people.

    Let’s say that only 10% of the above (sub)urbanized population gets nCoV-2019. That’s approximately 27,095,443 people.

    The estimated hospitalization rate is 10-20% but I’ll be optimistic and say that only 10% of the infected population need hospitalization. That’s approximately 2,709,544 people that need medical treatment to recover.

    The number of staffed hospital beds according to the American Hospital Association is only 924,107. Many of those are already filled.

    Where are 2,709,544 people going to get their treatment to survive? If they don’t the death rate will likely go up. Even if a single one doesn’t die, they’re not going to be contributing productivity to the economy or spending nearly as much money while they recover.

    With the potential for millions of people to be sick or being forced to stay at home, I don’t think the economy will bounce back for a long time. Not to mention that I took the optimistic path with my numbers.

    For what it’s worth, I hope you’re correct and I’m wrong.

    • johnyMac March 11, 2020 at 11:18

      vyt1az wrote, For what it’s worth, I hope you’re correct and I’m wrong.,
      Amen to that Brother…Amen to that.

      To be honest and maybe a bit tinfoil hatish about the Wahun Virus, I have a nagging feeling in the back of my mind that this was all planned or at least a General Jack Ripper drama (Dr. Strangeglove and how I learned to love the bomb) that played out in China to put a hurt on the world and more importantly the USofA. Mr. Trump is playing the Chinese like a drum as well as the Russians. Who is not to at least give some credence to a joint attack on us. Just think of all the negative press that Trump is receiving in the media. How many times has the left wished for a recession to neuter Trump. Based on the recent indicators it looks like it will happen if the Chinese do not get back on their feet and crank up those JIT plants and shipping ASAP. Be careful what you wish for.

      Thanks for reading and taking the time to comment Brother

  2. Jackalope in TN March 10, 2020 at 23:20

    I’m not going to make any predictions regarding the mortality rate in the U.S. We’ll have a better idea by the month of May. I believe we’ll have unforeseen secondary and tertiary effects from the Chinese virus. Another World War is within the realm of possibility too. My intent is to physically withdraw from society until I have more verifiable information. Good luck to all in these trying times!

  3. Gray Man March 11, 2020 at 00:34

    To vyt1az, keep in mind that your average ICU is already running at 90% capacity with zero COVID-19 cases in house.

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