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Markets are feeling the weight of pandemic history

BloombergOpinion/John Authers

Repost from 7-12-2021

“Much of the argument for higher imminent inflation, albeit not all of it, rests on the huge amounts of money that are currently burning a hole in the pockets of many Americans. The hope, which seems reasonable, is that they will rush to spend it once they have the chance. But that won’t necessarily happen.”

USAGOLD note 1: One of the major differences between the current pandemic and those of the past is the instantaneous flow of news and opinion via the internet. There has been an equally instantaneous ebb and flow in the market reaction to the pandemic’s economic implications – not all of it is based on rational thinking. Today’s reaction, though it is taken in some circles as the be-all, end-all, might not be the ultimate reaction. In short, in our view, the markets are still sorting things out. We will add that, during just the past week, it has begun to settle in that the economic ramifications of the pandemic (and its aftermath, if there is one) are still up in the air.

USAGOLD note 2: At a time, when no one really knows where this all ends, i.e., inflation, deflation, stagflation, disinflation, hyperinflation, does it not make sense to insulate one’s portfolio with an asset that protects against any of those ultimate scenarios? That said, for the more deeply curious, Authers lays out some interesting historical background at the link above.


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