Forbes/Frank Holmes
Some Are Betting On Red, Some On Blue. I’m Betting On Gold

The Wall Street Journal reported on Friday that the White House is preparing a coronavirus stimulus offer valued at $1.8 trillion, despite President Trump’s earlier comment on ending negotiations. It’s been seven months since the last relief package, the CARES Act, was signed, and in that time, the number of Americans filing for jobless benefits has remained elevated.

With the national debt now topping $27 trillion, such a package isn’t good for the government’s balance sheet, but it’s good for gold. Indeed, the yellow metal traded up as much as 1.8 percent on the news.

And I believe there’s additional upside potential—no matter who wins the election. In 22 days, millions of Americans will be betting on “red,” millions of others on “blue.” I’ll be betting on gold.

I’m far from the only one. Leon Cooperman became just the latest billionaire investor to buy gold. In a recent interview, the Omega Advisors chairman and CEO said: “I bought gold for the first time in my life a week ago. I understand the case for gold. We’re on the way to some banana republic situation. Nobody’s worrying about the debt that’s being created.”

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CNN Business/Chris Isidore
Another huge round of airline losses is coming

The second quarter was the worst financial hit in the history of the airline industry. The third-quarter results won’t be much better.

US airlines reported combined losses of $12 billion in the second quarter, excluding special items, as revenue plunged 86% from the prior year. And analysts are forecasting that losses will come to about $10 billion in the just-completed third quarter.

Delta Air Lines (DAL) will kick off the flood of red ink on Tuesday when it reports results.

Airlines did manage to shave losses by trimming costs — including labor, as employees took buyouts and early retirement packages and agreed to unpaid furloughs. And there was a modest pickup in travel during the summer travel season.

Yet it’s not much better than the previous disastrous quarter: Wall Street analysts forecast industry sales will be down 75% in the third quarter.

Bookings haven’t looked particularly strong for the fall with leisure travel drying up and very little in the way of business travel to take its place.

Meanwhile, many, though not all, of the airlines have recently implemented involuntary job cuts and furloughs that had not been allowed through the end of September under terms of the Congress-approved financial relief for the industry earlier this year. US airlines received $25 billion in direct help to keep workers on payroll through the end of September, along with an additional $25 billion in no-strings loans that did not come with the promise to avoid layoffs.

As soon as the prohibition on involuntary job cuts ended on October 1, American Airlines (AAL) cut 19,000 jobs and United (UAL) cut an additional 13,000. There was bipartisan support for a second package of federal help to prevent those cuts, but hopes for that assistance died when Congress and the Trump administration failed to agree on another Covid stimulus package.

Every US airline lost money in the second quarter. And virtually all are expected to report a full-year loss, including Southwest (LUV), which had reported 47 consecutive years of profitability through 2019.

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Kitco/Neils Christensen
Real negative interest rates will drive silver to all-time highs – Murenbeeld & Associates

In an interview with Kitco News, Chantelle Schieven, head of research at Murenbeeld and Associates, said that although silver prices could be caught in a fairly wide range through the rest of 2020, she said that she sees strong potential for silver starting next year.

The comments come as silver prices trade near a three-week high. December silver futures last traded at $25.25 an ounce, up 0.55% on the day. After being a definitive voice in the gold market for decades, Martin Murenbeeld and his team of researchers bring their analysis and expertise to the silver market as the firm broadens its reach throughout commodity markets.

Schieven said that she is bullish on silver for the same reason she is bullish on gold: falling real interest rates.

“I think the real interest rates, the tips yields have to go back down,” she said. “We’re going to see the Fed kick in. We’re going to see more fiscal stimulus come our way.”

Schieven added that by the Federal Reserve’s account, real interest rates have much further to fall. She noted that the Federal Reserve expects to hold interest rates at the zero-bound range through 2023; meanwhile, the central bank also sees interest rates tick higher.

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