Gold Resource Corp (GORO)

[GORO2020]

A Warning To the ""PIMPS"" of Wall Street...........The Federal Reserve "IS" going to FAIL no matter how many Fools to get on TV to PUMP this PONZI SCAM!!!!!!!!!!!!!!!!!

BUY ""GOLD"" NOW because your at the POINT where it will never be this CHEAP for YEARS!!!!!!!!!!!!!!

Gold COMEX (Jun'20)

Gold COMEX (Jun'20) (@GC.1:CEC:Commodities Exchange Centre)

*****1,642.60 +51.20 (+3.2173%)

Worldwide coronavirus cases reach 1 million, doubling in a week as death toll tops 50,000


The Federal Reserve's One Last Hail Mary

The Federal Reserve's One Last Hail Mary
by Alexander Deluce via GoldTelegrapoh.com

Over the last few weeks, the Federal Reserve has been in utter desperation mode to try to revive and keep the American economy on life support.



What many in the mainstream media have failed to include in this recent coronavirus economic narrative is that the virus was just the pin of one the biggest bubbles ever created, which we call the central bank bubble revolving around U.S sovereign bonds.



Before we dive deep into this, let’s start with what the Fed has been doing to combat against the coronavirus and to keep markets alive for the time being. To begin, welcome back to the era of the printing press, but this time they have made it clear they will conduct “QE infinity” if this is a prolonged depression, which it will be.

For some prospective, previous QE programs were:

QE1: $1.7 Trillion

QE2: $600 Billion

QE3: $1.6 Trillion

With this latest being:

QE4:$1.6 Trillion

An overwhelming number in such a short period, making previous QE programs look like peanuts in comparison. In fact, the Fed printed roughly $970,000 every second last week to keep the market afloat. To validate that the Fed is artificially keeping the market alive, just look at this next chart:



This chart showcases that while the Fed balance sheet has shot up ($5.2 Trillion), corporate earnings have plummeted. The market is clearly on life support with the Federal Reserve as its temporary backstop. Presently, the aviation, hotel, and automotive industries, to name a few, are in a major crisis. This applies to all businesses, but since 2008 companies have taken advantage of prolonged zero interest rates and have gone on a total debt binge, with the majority of this debt going strictly to share buybacks and dividends to shareholders.

It is expected the Federal government will bail some of these companies out with the unprecedented stimulus package passed last week. Which displays we don’t live in a real capitalistic society, wealth effects have been the primary mandate for the Federal Reserve for the past three decades (beginning with Greenspan).

But we now face a severe issue, which resides in the bond markets. The Fed has made it very clear that they will conduct QE forever if needed to normalize things; however, the more and more they print, and as more stimulus gets announced from the U.S government, the confidence in the U.S dollar will begin to dwindle.

Many prominent investors are calling for a significant dollar rally, as they believe the USD will forever be the world’s most sought out currency given its reserve currency status. However, they fail to realize this is a much different world we are navigating through then the 2008 financial crisis.

For starters, this will not be a temporary few month recovery. There are many signals being sent to the market that we are entering a great depression type environment. As CNBC reported just two days ago, the Federal Reserve itself has made estimates public that the unemployment rate could hit 32%, which would have 47 million Americans out of a job. For comparison, during the great depression of 1933, peak unemployment was 24.9%.

It’s worth revisiting the great depression, which had devastating effects. Personal income, tax revenue, profits, and prices dropped, while international trade fell by more than 50%. The great depression lasted until the beginning of World War II.

cont................More Charts..............

Next, on top of unprecedented quantitative easing coming from the Federal Reserve, there is a pipeline of liquidity in the form of an approved two trillion-dollar stimulus bill passed with many government officials calling for more. The American economy is currently being flooded with cash to keep things afloat.

The big story here, is looping back to the biggest bubble ever created which is the bond market and the question is, how will the Fed keep it from utterly collapsing?

The Fed has the following to worry about:

The $10 trillion corporate bond market

The $16 – 19 trillion commercial real estate market (which is shutdown)

The $23 trillion treasury market

The only way the Fed is going to deal with this is by printing endless amounts of money, which is going to debase the USD purchasing power in the coming years dramatically.

As more and more money is printed, one of the most important charts to pay attention to is this one:



The gold price will always be the best signal when it comes to inflationary concerns, as the metal is already at record highs in multiple currencies, and the industry is currently going through a physical supply crisis as premiums skyrocket.

The Dutch central bank summed up gold the best:

“Gold is the perfect piggy bank – it’s the anchor of trust for the financial system. If the system collapses, the gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank’s balance sheet and creates a sense of security.”

We wish everyone good health during these difficult times.


DNB’s gold stock

DNB’s gold stock

De Nederlandsche Bank (DNB) holds more than 600 tonnes of gold. A bar of gold always retains its value, crisis or no crisis. This creates a sense of security. A central bank's gold stock is therefore regarded as a symbol of solidity.



Gold vaults

DNB holds more than 600 tonnes of gold. Part of it is stored at DNB's head office in Amsterdam, but most of it is stored in other countries: the United States, Canada and the United Kingdom.

DNB's gold vault stores 15,000 bars of gold, worth over EUR 6 billion and representing a third (31%) of DNB's total gold stock. Another third (31%) is located in New York. This gold is stored in the vaults of the Federal Reserve Bank, on Manhattan's granite rocks. A larger share of the gold used to be stored here, but DNB retrieved part of it in 2014. The remaining 38% is stored in the vaults of the Canadian and UK central banks in Ottawa and London.



Gold: anchor of trust

Shares, bonds and other securities are not without risk, and prices can go down. But a bar of gold retains its value, even in times of crisis. That is why central banks, including DNB, have traditionally held considerable amounts of gold. Gold is the perfect piggy bank – it's the anchor of trust for the financial system. If the system collapses, the gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank's balance sheet and creates a sense of security.