{"id":1188461,"date":"2020-06-02T14:45:41","date_gmt":"2020-06-02T19:45:41","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=109402"},"modified":"2020-06-02T14:45:41","modified_gmt":"2020-06-02T19:45:41","slug":"you-may-never-see-normal-again","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1188461","title":{"rendered":"You May Never See \u201cNormal\u201d Again"},"content":{"rendered":"

This post You May Never See \u201cNormal\u201d Again<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

American cities are burning, there’s a lethal pandemic and we’re in a new Great Depression.<\/p>\n

Other than that, everything\u2019s fine.<\/p>\n

People often ask me when things will “get back to normal.” Well, the answer could be never (or at least not for a long time).<\/p>\n

Germany was not “normal” from 1914\u201354, for example. Social disorder is like a virus; it goes away eventually but not necessarily soon.<\/p>\n

Meanwhile, we\u2019re now in our third month of a national lockdown, with perhaps another month to go, depending on your locality.<\/p>\n

Some states and cities are beginning to reopen, but they\u2019re doing it in \u201cphases,\u201d so maybe your hair stylist reopened last week and your favorite restaurant will reopen next week.<\/p>\n

The lockdown has certainly been painful for many. Even under the best of circumstances, anxiety levels went up, patience wore thin and tempers flared at trivial things. Cabin fever is a real disease.<\/p>\n

Was it all worth it?<\/p>\n

I\u2019ve done a deep dive on this and the answer is almost certainly no.<\/p>\n

The lockdown did slow the spread of the virus and did save some lives, that\u2019s true. Yet the gains may only be temporary.<\/p>\n

\u201cFlattening the curve\u201d does not mean reducing total infections and deaths. It just means stretching them out over a longer period so the hospital system is not overwhelmed.<\/p>\n

There were much better solutions for this, including temporary hospitals and sending doctors and nurses from low-infection areas to those areas most in need, like New York City.<\/p>\n

The biggest problem with the lockdown was that everyone counted the benefits but no one calculated the costs.<\/p>\n

Many may have died and still could die from suicide, drug overdoses, alcoholism, domestic violence and other untreated medical conditions like cancer and heart attacks because patients were afraid to go to hospitals for fear of getting the virus.<\/p>\n

In short, the lockdown may end up costing more lives than were saved.<\/p>\n

That\u2019s on top of trillions of dollars of lost wealth and lost economic output. That\u2019s what happens when you put doctors in charge of the economy. Next time, it might be a good idea to let a few economic analysts into the room also.<\/p>\n

But don\u2019t worry, the optimists say. We\u2019ll see a \u201cV\u201d-shaped recovery once the lockdowns are fully lifted.<\/p>\n

You probably know the theory of a \u201cV\u201d-shaped recovery. The idea is that the economy fell sharply in March and April 2020 but it\u2019s ready to bounce back with a record recovery this summer and fall.<\/p>\n

The crash is one side of the \u201cV\u201d and the recovery is the other. The result is you end up recovering all of your losses and are ready for new growth from the old levels.<\/p>\n

You\u2019ll hear this a lot, but don\u2019t believe it.<\/p>\n

Remember \u201cgreen shoots\u201d in 2009 and 2010? They turned out to be brown weeds. Yes, the economy eventually recovered and the stock market went on to new highs, but it was the weakest recovery in U.S. history and those stock market highs took almost seven years to appear.<\/p>\n

Things are much worse now.<\/p>\n

Yes, we will hit a bottom this summer. And yes, a recovery will begin. But it will be long and hard.<\/p>\n

Output may not get back to 2019 levels until 2022 or later. Unemployment will come down, but it is still expected to be higher than the worst of the 2008 crisis in 2023. The bankruptcies are just starting.<\/p>\n

We\u2019ve seen J. Crew, J.C. Penney, Neiman Marcus, Pier 1 Imports and Hertz all file for bankruptcy in recent weeks. There is a long line of name-brand companies right behind them preparing to go bankrupt also.<\/p>\n

Not only will we not have a V-shaped recovery, but it will probably be an \u201cL\u201d (down and then sideways).<\/p>\n

The 2009\u20132020 recovery was an \u201cL\u201d where the new trend for growth was 2.2% instead of the post-1980 trend of 3.2%.<\/p>\n

Now the new recovery (when it begins) may have output of only 1.9% or less.<\/p>\n

When each recovery is weaker than the one before and debt goes up faster than growth, it\u2019s just a matter of time before you go broke \u2014 or eventually break out in inflation.<\/p>\n

We probably won\u2019t see inflation for a while because inflation has a strong psychological component and right now a deflationary mindset prevails.<\/p>\n

That may change \u2014 it probably will \u2014 but we\u2019re not there at this point.<\/p>\n

Meanwhile, people are looking for \u201csafe havens\u201d right now.<\/p>\n

Stock and Treasury market behavior can be explained as much by “safe haven” demand as fundamentals. But what happens when the safe haven doesn’t look so safe?<\/p>\n

There\u2019s still one place to go \u2014 gold.<\/p>\n

Regards,<\/p>\n

Jim Rickards
\nfor The Daily Reckoning<\/i><\/p>\n

The post You May Never See \u201cNormal\u201d Again<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post You May Never See “Normal” Again<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

“Social disorder is like a virus; it goes away eventually but not necessarily soon”…<\/p>\n

The post You May Never See “Normal” Again<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[3884,3724,366,656,465,4336,463],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1188461"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1188461"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1188461\/revisions"}],"predecessor-version":[{"id":1188462,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1188461\/revisions\/1188462"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1188461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1188461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1188461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}