“Be anxious for nothing…” – Paul the Apostle, Philippians 4:6
Bull Market RIP
In an astonishing turn of events, the once-thriving bull market in U.S. stocks is now a memory. From its peak of 29,551 on February 12, the Dow Jones Industrial Average (DJIA) plummeted to 21,200 in a mere 30 days—a staggering decline of over 28 percent. Rest in peace.
While death signifies an end, it often heralds a new beginning. The bull market’s demise signals the arrival of a bear market. We estimate the DJIA will need to dip another 30 percent before the bear market concludes and a new bull market can emerge.
In the interim, the Federal Reserve and the U.S. Treasury are likely to deploy every strategy at their disposal to resuscitate the previous bull market. Just recently, Fed Chair Powell activated a massive $4 trillion repo bailout. Yet, this audacious move failed to deliver the desired results.
After a brief respite, the DJIA resumed its decline, closing down by nearly 10 percent, or 2,353 points. The stock market is acutely aware of the economic damage caused by efforts to contain the coronavirus, a reality that is undermining the economy.
Unemployment is rising. Businesses are closing their doors. Ports sit idle, railroads are silent, and sports venues remain dark. The oil market is in freefall, and panic engulfs the nation. The resulting economic landscape threatens to lead us into a severe depression, potentially dubbed The Great Depression II. The stock market is adjusting its reality to reflect this grim forecast.
The truth is unavoidable…
Can’t Run, Can’t Hide
You cannot escape. You cannot hide. Ultimately, no one here makes it out unscathed. However, you do have options.
You can challenge fate. You can resist the prevailing currents of destiny. This involves taking calculated risks contrary to popular opinion—but it must happen before the tipping point, as the crowd races toward disaster.
Throughout periods of economic turmoil, physical gold and silver, along with arable land, have historically been reliable means of preserving wealth. Those who had the foresight to diversify their savings into these assets may find themselves more secure.
If you missed out on this opportunity, the responsibility is yours. Warnings have been evident for quite some time, indicating that financial markets were teetering on the brink of a crisis. It was clear to anyone paying attention.
Even individuals with modest means could have made simple choices to safeguard their financial well-being—perhaps opting to trade stocks for silver coins instead.
With a bit of luck, these tried-and-true assets will safely navigate us through this turbulent period, until new economic realities emerge. At that time, it’s likely that paper money will hold little value, while gold and silver will maintain their worth.
Admittedly, gold and silver have taken a hit this week. However, as sure as day follows night, once the current wave of panic subsides and the implications of monetary and fiscal destabilization become clear, these precious metals are expected to surge. You can be confident of that.
In the meantime, escaping to a rural retreat or mountain cabin is an appealing way to weather the storm—assuming you have such a place available. If not, the upcoming months may reinforce the importance of having food supplies and cultivating a vegetable garden. Being prepared with essentials and some gold can allow for a more peaceful existence, away from large crowds.
Beyond that, the best strategy may be to keep a low profile as the tumultuous events unfold. To aid you during these challenging times, we present a collection of practical ideas, including a 12-Point Great Depression II Survival Guide. This guide can help you navigate this crisis effectively.
Your 12-Point Great Depression II Survival Guide
On November 21, 2008, amidst a financial crisis, we provided practical advice in response to numerous reader queries. That guidance proved invaluable to many. Today, by popular request, we revisit it with some updates. We recommend printing this out and posting it for reference as dark days approach.
Your 12-Point Great Depression II Survival Guide:
- Always take what’s rightfully yours… plus a little extra. You’ll need it with Donald J. Trump navigating an election year.
- Never shake hands with your right hand without secretly crossing your left fingers behind your back; you never know when you might need a second chance.
- Always prioritize your own needs, but watch out for the pitfalls around you.
- Never give a beggar your spare change unless it buys them a drink.
- Understand the difference between honesty with yourself and honesty with others; the former should be unwavering, while the latter can be more flexible, particularly when dealing with insurance.
- Refrain from kicking a man when he’s down; equally, don’t rush to help him up.
- Don’t stiff your barber; he might be your last resort when things get tough.
- Avoid exploiting the vulnerable, such as widows and orphans; all others are fair game.
- Don’t fret over finances; the absence of money should not be a major concern.
- Remember, there’s a fool on every corner, and a sucker is born every minute. Strive to avoid being one, as it can be both demoralizing and costly.
- Do not take job loss personally; this economy is on a downward spiral, and many others will face similar hardships.
- Keep in mind that this too shall pass, although not quickly enough. Stay hopeful, for even in tough times, life continues to flourish, and those with clarity of mind and spirit will emerge from it a little wiser, if not a bit leaner.
Wishing you the best,
MN Gordon
for Economic Prism
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