This year’s fall season has never been so hectic and anxiety-ridden. Coronavirus is still a thing. Economies are trying to recover, while businesses are trying to reopen. Jobs are slowly coming back, while schools are in flux. The campaign for the presidency kicked up a notch as it winds to its last stages. Lost in the chaos is an important question among Americans. Is a second stimulus check still happening?
RELATED: New Coronavirus Stimulus Package
Last July, Congress adjourned without coming out with a comprehensive relief program. Both sides continued to negotiate during the break but ended up being further apart. The previous program’s benefits expired on July 31, and until now, there are no new bills. A $600 extra jobless benefit, a moratorium on evictions, and the window to apply for PPP loans all have lapsed since.
President Donald Trump issued executive orders last August that aimed to provide relief. The jury’s still out on the orders, as there were questions on implementation and funding. Now that the Senate is back from recess, there’s hope for a new round of relief for Americans. What the relief package contains is still up for debate.
GOP Proposes the”Skinny Bill”
On Tuesday, Senate Republicans introduced a less-than-expected coronavirus aid bill. It does not have the anticipated stimulus check, but it does have unemployment aid. Instead of the extra $600 unemployment benefit, the GOP proposed half, or $300. The “skinny bill” also includes liability protections for businesses and health-care facilities. It also funded more money for health-care funding and schools. Finally, it also contains the second round of Paycheck Protection Program funding. While the bill provides only a part of the previous relief, it only costs between $500 billion to $700 billion. Unspent funds for Federal Reserve facilities support will cover some of the costs.
All in, $105 billion would go to schools, $16 billion into Covid-19 testing, and $31 billion toward the development and stocking of vaccines. Another $15 billion would go towards childcare grants. Senate Majority Leader Mitch McConnell (R-KY) called it a “targeted proposal.” He said: “We want to agree where bipartisan agreement is possible… get more help out the door and then keep arguing over the rest later.” He hopes that Congress will vote on the proposal later this week.
Democrats Say No Again
In response to the skinny bill, the Democrats remained unimpressed. House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) noted that this bill won’t help. In a joint statement, they claimed “Senate Republicans appear dead-set on another bill which doesn’t come close to addressing the problems and is headed nowhere.” Dems criticized the bill because it excluded other sectors that need help. Missing are funds for state governments, rental and mortgage, USPS, and food. As a result, the bill likely will not get the needed 60 votes to pass the Senate. It would also take a miracle to get approval in the Democrat-controlled House.
While acknowledging that Americans need aid, Republicans balk at spending more money. Earlier, they shot down a Democrat stimulus proposal worth $3 trillion. The GOP insisted on a $1 trillion budget and refused to resume talks even when the price tag went down to $2 trillion.
Reacting to the Democrats, McConnell said: “Speaker Pelosi and Leader Schumer said a targeted deal on jobless benefits and the Paycheck Protection Program would be ‘piecemeal,’ but then-Speaker Pelosi came rushing back to pass the most piecemeal bill imaginable: Postal Service legislation.” He noted that this bill “completely ignored the health, economic, and education crises facing families.”
McConnell added: “Everything Speaker Pelosi and Leader Schumer have done suggests one simple motivation: They do not want American families to see any more bipartisan aid before the polls close on President Trump’s re-election. They have taken Americans’ health, jobs, and schools hostage for perceived partisan gain.”
The Deadline is Looming
The November elections are putting the squeeze for incumbents to do something. The White House, in particular, would prefer the release of second stimulus relief aid before the polls. Incumbents facing tough reelection also need party help to boost their chances.
It’s time for parties to realize that there is more than the election at stake. The more important deadline was the one set by everyday Americans. Election year or not, if a second stimulus check will happen, it has to happen now.
Watch CNBC Television: Texas Senator Ted Ruz doesn’t believe Congress likely won’t pass stimulus before Election Day:
Do you think that both parties can come to terms with submitting a bipartisan bill to provide a second stimulus relief package to Americans? Or has the time run out to come up with something? Let us know how you feel about this by leaving your comments below.
Gold ‘Frenzy’ To Build Around Election, Platinum Could Soar 50% By Year-End
Peter Hug, head of the precious metal division at Kitco, believes the Fed’s decision to hold interest rates at near-zero through at least 2023 is bullish for precious metals and particularly gold. He also mentioned the road platinum can head to by the year’s end.
“About three Fed meetings ago they indicated they would hold rates at pretty much zero through the end of 2021 into early ‘22, today they’ve extended that by an additional year, there have been some analysts that are suspecting they will keep rates at zero right through 2024, so we’ve got another almost four years of zero interest rates to look forward to,” said Hug.
“The Fed being a bit more accommodative on inflation indicates to me that it’s a very positive environment for hard assets in general but I think the metals as well will continue to move higher over the next period of time based on the dovishness of the Fed, global central banks and the uncertainty of the US election coming up in about six weeks.”
The State of the Gold and Silver Markets
Hug said the current consolidation phase is a great sign of the overall health of the gold and silver markets. This comes after the frenzy in the gold and silver markets about a month ago.
“The market has been consolidating, which is a very good sign, especially for gold. Gold has been consolidating between our support level of 1925 and 1975 for the better part of two weeks. Silver seems to be between $26.50 – $27.50 range and consolidating as well. The fact that people are not selling into a market that is as frenetic as it was a month or six weeks ago, indicates to me that this market is setting up for the next leg higher once we get through this consolidation phase.”
Availability and Premiums
The gold and silver markets are taking a bit of a breather and the mania has slowed a bit. With this, Hug said the availability of gold and silver coins is getting better. He said premiums are coming down as well.
“On the gold and silver side, dealers are starting to show inventory. That’s not a result of increased production, it’s more a result because of this consolidation phase, retail investors have started to pull back on the markets so there’s not as much buying frenzy in the physical space right now, I think that changes if gold gets north of $2,000 again. But this consolidation of $50 range in gold and the $1, $1.50 range in silver has basically dried up the demand at these levels.”
“So production is still coming on board and dealers are starting to build inventory. And because of that you are seeing premiums come down. Silver maple leafs you can get, again, depending on quantity, somewhere between $5-6 over spot, Eagles are down somewhere between $5-7 over spot, so you are starting to see as this market stays sideways and we don’t see another rush into the buying side from the retail investor, you give it another 2-4 weeks and I think there will be reasonable inventory on the market and premiums should come down.”
Volatility to Return Soon?
Hug said that if you are looking to acquire gold and silver coins, you shouldn’t wait long as we could see volatility return very soon.
“I caution that past October 15 the market is going to be very volatile as we go into the election.”
Other than gold or silver, Hug sees a huge opportunity in the platinum space. There, he expects prices to climb 50% by the end of the year.
“I’m constructive platinum. It is also consolidating in the $900-950 range, but I do anticipate platinum to be north of $1000 and then look to $1200 possibly $1400 before year end.”
US Billionaires Got Richer During Pandemic by $845 Billion
US billionaires got richer during the pandemic by a tune of $845 billion. This represents a 29% increase from the time the Covid-19 lockdowns started until now. While the stock market crashed during the early days of the pandemic, it has since recovered. Along with recovery are net worth increases for America’s billionaire. Among the pandemic’s big winners of 2020 were Jeff Bezos, Elon Musk, and Mark Zuckerberg. Also in the list were investor Warren Buffett, Oracle CEO Larry Ellison, and ex-NY Mayor Michael Bloomberg.
RELATED: Jeff Bezos Is Now Worth $200 Billion
In a report released Thursday, the Institute for Policy Studies and the Americans for Tax Fairness (ATF) said the total net worth of 643 of the nation’s richest people rose from $2.95 trillion to $3.8 trillion.
This is equal to a 29% increase between March to September. The report based the numbers on Forbes’ annual billionaire’s report and real-time data.
Jeff Bezos, the founder, and CEO online retail giant Amazon is now the world’s richest man. The pandemic forced people indoors and played right into Amazon’s online strategy. As millions switched to online shopping, demand for Amazon’s services skyrocketed. Amazon shares zoomed along with 40% in 2020, as the company racked up billions in orders. People bought groceries, medicine, household products, and entertainment items on Amazon’s sites. As the company grew richer, so did its CEO and majority stockholder. On August 19, as stock prices of Amazon went up, his net worth exceeded $200 billion. As of September, Amazon stock has fluctuated and Bezos’ current worth is $184 billion.
Another rich guy that got even richer was Tesla’s founder and CEO Elon Musk. Tesla’s value grew five times its January price. By August, the company’s stock split pushed his personal shares to $104 billion. This allowed him to join the coveted centibillionaire club. Compared to his March net worth of $24.6 billion, he’s now over four times that. As of September, with Tesla dropping value, Musk’s worth has dropped as well to $88 billion.
Facebook’s Mark Zuckerberg, who was worth $107.6 billion in August (now down to $93.7 billion). Facebook stock rose from $209 in Jan to $303 in August, making his 13% stake worth over $100 billion. Like Musk, he also joined the centibillionaire club this year.
“COVID crisis supercharges inequalities”
Chuck Collins, director of the Institute for Policy Studies’ Program on Inequality, and co-author of the report said he was somewhat shocked by the figures. He added that the COVID crisis is “supercharging America’s existing inequalities.” He said, “I would have thought maybe six months into this that things would have shaken out – that everybody would take a hit.”
“The difference is stark between profits for billionaires and the widespread economic misery in our nation. It sort of dramatizes the unequal sacrifice and profiteering element of the wealth accumulation at the top.”
Meanwhile, Covid-19 infected 6 million Americans and killed more than 200,000. As businesses collapse, the economy outside of Wall Street is in recession. More than 50 million jobs vanished in the pandemic. At present, 14 million Americans remain unemployed. Even those lucky enough to still have jobs got hit. Average work income fell by 4.4.%, per Bureau of Labor Statistics data. Outbreaks are still prevalent, even as a vaccine remains under development.
As such, the economy’s reopening remains slow.
Even local governments are feeling the pressure. States and cities are hamstrung with crippling deficits. California declared a $54 billion deficit, while New York City is looking at a $9 billion loss in revenue. From now until 2022, state budgets face a $555 billion deficit. This is according to the Center on Budget and Policy Priorities.
COVID-19’s unique effect made those with better plans during the pandemic fares better than most. In the case of Amazon, people flocked to their site when going out posed safety issues. For the others, the rise in stock reflected more on how they handled their business during the crisis. Some people are just quicker to seize on opportunities, even those coming from a crisis.
Watch this as Bloomberg reported last July 2020 on how billionaires got $637 billion richer during the pandemic:
Should we begrudge the rich getting richer, especially at a time like this? Do they deserve this success? Let us know what you think by leaving your thoughts on the comment section below.
Fed Keeps Rates At Zero, Powell Says More Fiscal Support Needed
The Federal Reserve wrapped up its last meeting before the November elections. It announced that it would keep rates at essentially zero until at least 2023. This serves as a signal that it doesn’t see inflation as an issue at all for the foreseeable future.
Fed Chairman Jerome Powell said, “We’re going to continue to monitor developments, and we’re prepared to adjust our plans as appropriate.”
“With inflation running persistently below this longer run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved,” the Fed’s post-meeting statement said.
Uncertainty and the Stock Market
However, the Fed’s latest projections have core inflation staying below their 2% target until 2023. This leaves many observers unsure of the Fed’s actual plan to spur the inflation they desire. This uncertainty caused the stock market to drop after the announcement.
“He noted that targeting an inflation overshoot for ‘some time’ as the statement says, means that they are not targeting a ‘sustained’ overshoot. So how long is ‘some time’ if it isn’t sustained?'” asked AB economist Eric Winograd. “That imprecision is a problem that the committee is going to have to solve to reap the full benefits of the framework shift. It’s not a coincidence that the stock market, which had been in positive territory, flipped negative after the chair’s comments.”
“He’s the great and powerful Oz. Investors got duped. They thought enhanced forward guidance meant something, but when they peeked behind the curtain they realized the Fed didn’t do anything, and the market rolled over,” said Michael Arone, chief investment strategist at State Street Global Advisors.
Jon Hill, a senior fixed-income strategist at BMO, added “This is dovish – lower rates for longer, higher equities, weaker dollar. The Fed is saying we’re not hiking in 2023, maybe in 2024 … What they’re saying is these are our goals. We expect to have just barely met them and even then, they’re not raising rates.”
Stimulus and Economic Recovery
Stepping ever-so-slightly into the political realm, Powell said that Congress should pass another stimulus package to support the economic recovery. He then identified unemployment aid, small business relief and funding for state and local governments as three key areas.
“More fiscal support is likely to be needed,” Powell said. “The details of that are for Congress, not the Fed.”
Republicans have repeatedly stated that they won’t provide additional funding to bailout poorly managed cities and states as part of any additional stimulus bills.
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