The world needs a Christmas miracle

As we quickly approach the holiday season, for many Americans it will not be a time for celebration, but a time of revocation. This as the aid keeping working families in their homes thanks to the promise the U.S. government has kept may soon be revoked, but still, there is hope. Hope in the form of genuine optimism regarding the development of a Covid-19 vaccine by at least three pharmaceutical companies. However, according to the World Health Organization as of December 8, 2020, there have been 67,210,778 confirmed cases. This includes the 1,540,777 people who have perished due to the ongoing pandemic.

This has caused extreme hardship for those that have lost loved ones, and those that that have contracted the virus. But there is also genuine concern for those that remain unemployed because of the pandemic. At its peak, there were over 22 million Americans unemployed.

Currently, it is estimated that there are about 12 million Americans unemployed, who are living week to week surviving off of the extended unemployment benefits. However, on the day after Christmas, the prolonged unemployed benefits that have been the only income for millions of Americans will expire. This will be followed by the conclusion of the moratorium on evictions which will go into effect on December 31.

According to Moody’s Analytics Chief Economist Mark Zandi the day after the conclusion of the moratorium on evictions there will be approximately $70 billion of unpaid back rent and utilities which will come due. The Aspen Institute predicts that up to 40 million individuals could be threatened with eviction over the upcoming months.

Aside from the incredible hardship that tenants will face, landlords don’t have it much easier many may be forced to liquidate their rental properties due to rental income losses. According to Stacy Johnson-Cosby, President of the Kansas City Regional Housing Alliance more than 40% of the landlord surveyed in her coalition said that they expect to have to sell their units in the upcoming months.

It is for the reasons we spoke about above that the proposed bipartisan $908 billion second stimulus package is so critically urgent. Sadly, even if lawmakers can pass the stimulus package it will only allocate $25 billion for rent relief, it will fall far short of the estimated $70 billion that will be needed in January.

Over the last two weeks, gold has been moving higher based on the optimism that some form of stimulus will be allocated to those in need. In fact, from the week of November 30, when gold futures traded to a low of $1767 to today’s current pricing of $1875, gold has gained just over $100 per ounce. As great as the need for additional fiscal stimulus is, it will have a detrimental impact on our budget deficit and should weaken the U.S. dollar. These factors will be the primary reasons we believe that gold has been on the rise and will continue to gain value throughout the end of the year and continue moving higher in 2021.

Wishing you as always, good trading and good health,