The reasoning for this has been well documented through my last number of articles, however, it bears reiterating that tourism, global travel and the vital supply
Many people are starting to become fearful and beginning to take precautions, buying whatever form of protection that they can, most notably in the form of protective masks with ratings of N95 or higher, even despite the fact that it has been proven that these do not fully protect a person from contracting the
Still, anything helps and you cannot blame people for attempting to get ahead of the curve before these sell out across North America, as has been seen in other countries such as China, South Korea and any other region heavily impacted already by the
Already on websites such as Amazon and eBay, we can see people attempting to sell these face masks for outrageous prices, a common tactic in times of crisis. Anything reasonably prized has been sold out for days.
Wall Street, who has blissfully been ignoring the spread of the virus for weeks, finally woke up on Monday morning, realizing that this crisis is not going away and is indeed here to stay for many months to come.
This caused prices of stocks to absolutely tank throughout the trading week, resulting in losses that are truly historic given the short period of time in which they occurred. Trillions of dollars have been wiped off the books, resulting in staggering losses.
The drop throughout this week was so severe and so sharp that we have to go all the way back to 1928, days before the Great Depression began, to find a comparable scenario.
(Charts via google.com)
Even at the time of writing, on Thursday, February 27th, markets continue to nosedive lower, with the S&P 500 Index dropping by 2.25% and the Dow Jones Industrial Average plummeting by 2.41%.
These drops come after days of already heavy losses, compounding the pain and leading to additional selling by those who are fearful.
To make matters worse, we now have a number of stories hitting the airwaves about how numerous senior officials have contracted the coronavirus , such as the Iranian Vice President for women and family affairs, Masoumeh Ebtekar and a former ambassador to the Vatican, Hadi Khosroshahi, the latter of which passed away due to the virus.
(Chart via worldometers.info)
As of today, the total number of coronavirus cases still continues to climb, reaching 82,758 in total, with 2,817 of these resulting in fatality, according to official reports.
Many speculate that these numbers are an estimation only, with the real numbers being much higher.
It doesn't end there, as the State of California brings additional bad news, announcing today that they are in a state of emergency, as they monitor 8,400 people, whom they suspect may be infected with the coronavirus .
(Chart via goldprice.org)
Meanwhile, gold bullion, after an initial sell off earlier in the week, due to people needing liquidity, has now found support and is holding its ground, due to people purchasing it as a safe haven play.
Unfortunately, as I have been saying for weeks, this situation is in all likelihood only going to worsen in the months to come, as the true impact of the coronavirus is yet to be felt.
As people become fearful, they begin to self isolate, travel less and thus spend less, the latter of which is a death nail for the consumer based economy we now live in.
If this virus continues to spread at the rate it has, then you should expect to see many more violent trading days in our near future, shaving additional trillions off of the markets as they descend lower and adjust for the financial impact that is coming.
Sadly, I believe this is far from over yet and the losses that we are now witnessing are just the tip of the iceberg.
- As first seen on the Sprott Money Blog