The recent pandemic has provided the catalyst needed to finally push our economy into an overdue “great depression,” this according to Doug Casey, founder of Casey Research.
Casey told Kitco News that although the virus has popped the bubble, the underlying problem is still due to poor economic fundamentals.
“This hysteria over the coronavirus, not necessarily over the virus itself but the resulting hysteria, and the second and third order knock-on effects have kicked it off. It’s been long overdue but don’t blame it on the virus, blame it on very, very unsound fundamentals,” he said. “The inevitable has become the imminent.”
Year-to-date, the Dow Jones Industrial Index has sold off 30%, with precious metals falling alongside stocks as investors scramble to raise cash.
The Federal Reserve has responded to market turmoil with two rate cuts, brining interest rates to near zero. Bond yields have also fallen to historic lows.
Despite market calamity, Casey said that the virus’s seriousness is overblown.
“The virus itself isn’t nearly as serious, I don’t know how serious it’s going to be, but not terribly in my opinion,” he said. “What I’m really shocked at, Daniela, is the degree of hysteria on the part of the powers that be. They’ve actually just gone insane.”
He added that the proper response is not to enforce quarantine by the governments but to allow the population to act in the best interest, which would result in people naturally staying away from each other.
Gold prices have rebound Tuesday, as markets climbed higher. Spot gold last traded at $1,617.40 an ounce.
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