CNBC/Fred Imbert
Dow sinks 800 points as investors fear rise in coronavirus cases could halt the economic recovery

U.S. stocks fell sharply on Wednesday, following their European counterparts, as investors worried that the latest increase in coronavirus infections could halt the global economic recovery.

The Dow Jones Industrial Average dropped 823 points, or 3%. The S&P 500 dipped 2.9% and the Nasdaq Composite traded 3% lower.

In Europe, the German Dax index dropped 4.4% to its lowest level since late May and the French CAC 40 slid 4%. The FTSE 100 in London fell 3.2%.

This uptick has led some countries to reinstate certain social distancing measures. German Chancellor Angela Merkel called on Wednesday for a limited lockdown. Meanwhile, Reuters reported, citing sources, that France was poised to issue a stay-at-home order. In the U.S., the state of Illinois has ordered Chicago to shut down indoor dining.

U.S. coronavirus cases have risen by a record daily average of 71,832 over the past week, data compiled by Johns Hopkins University showed. Meanwhile, coronavirus-related hospitalizations are up 5% or more in three dozen states, according to data from the Covid Tracking Project.

“I think there’s going to be a call for lockdowns the likes of which we’ve seen in Chicago,” CNBC’s Jim Cramer said Wednesday. “The lockdowns without the stimulus equals what we’re seeing.”

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Kitco/Neils Christensen
Inflation is coming, preserve your wealth with gold – Degussa chief economist

Consumer prices may be showing muted inflation pressures as the world continues to feels the effects of the COVID-19 pandemic but a major inflation threat is looming on the horizon according to one chief economist.

In a telephone interview with Kitco News, Thorsten Polleit, chief economist at Degussa, said that instead of focusing on consumer inflation, investors need to pay more attention to the growing money supply as this is what is going to general higher inflation for years to come.

Polleit’s comments come as governments and central banks around the world continue to flood capital into financial markets to support the beleaguer global economy. In a recent report, the International Monetary Fund said that $12 trillion has been pumped into the global economy. Data published last week showed the Federal Reserve’s balance sheeting hitting a new record high above $7 trillion.

“People continue to ask: ‘Where is the inflation,” he said. “But you just have to look at equity markets, real estate and bond prices. At the moment inflation is impacting asset markets. But the increase in the quantity of money that has been printed in the U.S. as well in the Euro area inflation will sooner or later also push up consumer prices.”

“It may take a while for inflation in asset markets to show up in consumer prices it will eventually happen,” he added. Polleit said that there are two major issues the global economy has to deal with when it comes to all the money that has been printed by governments and central bank.

The first issues are currency debasement and the loss of purchasing power. Polleit said that wealth is being destroyed as currencies lose their purchasing power. He added that the create of more money doesn’t make people wealthy.

“Money is just a means of exchange. The wealth of a nation comes from the products it produces, the apples it grows and the homes that it builds,” he said. “More money doesn’t make a nation wealthier.”

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CNN Business/Matt Egan
How Washington’s stimulus gamble could backfire

The fragile economic recovery is losing steam. The pandemic is getting worse again. The risk of post-election chaos has never been higher. And yet lawmakers in Washington won’t agree to a fiscal rescue package that is so obviously needed.

Both sides of the aisle are betting they’ll avoid the wrath of voters, despite this historic failure. The livelihoods of countless Americans will be worse off because of this political roll of the dice.

“Politicians in both parties are tempting fate by not agreeing to another round of fiscal aid,” said Joe Brusuelas, chief economist at RSM International. “This is more about politics than economics or finance. That’s the unfortunate reality of the matter, because real lives do hang in the balance.”

Without federal aid, more small businesses will close. Those on unemployment will struggle to get by without enhanced benefits. Renters could face eviction. Families won’t receive another round of stimulus checks. Hotels, airlines and other travel businesses will shed tens of thousands more jobs.

And the deadlock in Washington — on top of the surge of coronavirus infections — casts a shadow over what is already an uneven economic recovery. Although the stock market and housing market have sharply rebounded, the parts of the economy most exposed to the pandemic remain troubled.

“These are still dark economic times,” said Mark Zandi, chief economist at Moody’s Analytics. “The recovery is at significant risk because of the failure of the administration and Congress to pass another fiscal rescue package, particularly given that the pandemic is intensifying and the rancor over the election threatens to boil over.”

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CNBC/Greg Iacurci
Millions poised to lose unemployment benefits in ‘enormous cliff’ at year’s end

Millions of jobless Americans are poised to lose their unemployment benefits at the end of the year without action from Congress to extend temporary aid programs.

A federal program paying benefits to gig workers and others (such as the self-employed, freelancers, contractors and part-timers) is poised to lapse after December, as is one paying extra relief to workers who’ve exhausted their standard state benefit.

In all, there are about 13.5 million people in these two programs — more than half of the roughly 23 million people receiving unemployment benefits, according to Labor Department data.

“There’s going to be an enormous cliff at the end of the year,” Stephen Wandner, a labor economist and senior fellow at the National Academy of Social Insurance, said of the expiring benefits.

That aid would be ending at a precarious time and cripple household spending among these workers, according to economists.

Meanwhile, the U.S. is experiencing a third peak of new coronavirus cases. Rising infections could lead to renewed business closures, and associated layoffs, especially as the country heads into the colder winter months that limit outdoor activity, economists said.

Further, layoffs once thought temporary have become permanent and jobless durations are rising. There are about two unemployed workers for every job opening, according to the Bureau of Labor Statistics, making it difficult to find work at the same time the economic recovery that started in May has lost steam.

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