CNN Business/Matt Egan
Ex-Obama adviser warns of a potential repeat of the financial crisis
“Whoever is coming in there in January 2021 might be facing worse conditions than in 2009, as hard as that is to believe,” Austan Goolsbee, who helped guide Obama through the Great Recession, told CNN Business. Goolsbee, who chaired the president’s Council of Economic Advisors in the aftermath of that crisis, is worried that the fragile economic recovery will stall if the worsening pandemic isn’t quickly brought under control.
This is really playing with fire. They must get the spread of the virus under control. That’s what almost every other country has done.”
A worsening economy would cause countless companies and small businesses to collapse, forcing already-hurting banks to suffer massive losses.
“It could cause a financial crisis,” said Goolsbee, currently a professor at the University of Chicago’s Booth School of Business. “We could be back into conditions like the 2008 financial crisis.”
Gold price makes history, hits all-time high and analysts still looking for more
The juggernaut that is the gold market remains unstoppable it started the week hitting an all-time high against the U.S. dollar.
The gold market made its historic move Sunday evening during the Asian trading session. First spot gold hit its all-time high above $1,920 and then August futures quickly followed suit. August gold last traded at $1,922.70 an ounce, up more than 1% on the day.
Although the record has been a significant target for analysts and investors, it is also seen by some as just a small speed bump within a much bigger uptrend.
In a recent interview with Kitco News, Marc Chandler, chief market strategist at Bannockburn Global Forex, said that he expects that gold prices could easily hit $2,000 an ounce before this current rally is over.
“It is difficult to talk about resistance in never-before-seen prices, but if our view of interest rates and the turn in the dollar cycle is fair, then $2,500 might not seem unreasonable,” he said in a report Sunday, reiterating his current bullish stance.
This week we’ll learn the size of the hole the U.S. economy fell into when COVID-19 struck
There are good economic reports, there are bad ones, and in some rate cases there are ugly ones. This week, we get ugly.
We will find out how deep a hole the U.S. economy fell into in the second quarter this year when non-essential businesses closed down in many parts of the U.S. and many workers sheltered at home to try to stop the spread of the coronavirus pandemic.
The Commerce Department will release the Q2 GDP report at 8:30 a.m. on Thursday.
“We’re looking for the worst postwar economic contraction in 62 years,” said Sal Guatieri, senior economist at BMO Capital Markets.
Economists polled by MarketWatch expect a contraction at a seasonally adjusted annual rate of 33% in the second quarter. That’s much deeper than the previous worst-ever quarterly contraction of 10% seen in the first quarter of 1958.
As silver sits close to seven-year highs, trader foresees a more than 30% rally
Gold isn’t the only hot metal this year.
Silver has rallied 15% just this week, adding to a nearly 30% gain for the year. The commodity on Thursday morning hit its highest level since September 2013. In a note Thursday, Citi credited improving inflation measures as one reason behind the move.
Bill Baruch, president of Blue Line Capital, expects more gains.
“I love the precious metals and have always said that you need a portion of your portfolio at minimum in precious metals, so silver has some room to run here,” Baruch said on CNBC’s “Trading Nation” on Thursday.
Baruch says the charts suggest $26 per ounce could be the next hurdle, a level of resistance stretching to 2011 that could now become support. If it moves past that, he says ”$30 could be in the cards, too.”
A move to $30 marks more than 30% upside from current levels. It traded at $22.78 on Thursday evening.