"If Biden is sworn in, he'll shut the economy down this winter more than Trump would have. USD goes under the bus, stagflation is likely. They'll blame COVID-19, but for once, socialism might also get some of the blame for the trouble it causes..." said Lobo Tiggre of the Independent Speculator in a Tweet made last week.
Golden silver are rebounding after yesterday's losses, but, uh, equity are still seeing a mixed bag. The NASDAQ is down 1% while the S and P 500 and the Dow Jones are up level Tigray of the independent speculator joins us today to talk about what is wrong with our economy today. And by the way, Lobel before we continue you called what happened yesterday, right?
You. And I spoke about a couple of weeks ago, a month ago. And you said, when we get a vaccine now a announcement, we're going to get a knee jerk reaction in the gold market. And that's exactly what happened yesterday. And this is a question I've been getting from a lot of viewers coming into my inbox is what's going to happen to gold, should a vaccine introduced.
You can see knee-jerk reactions to things like this as you and I are speaking, we have this knee-jerk reaction to this really. I think insignificant change in CPI data. That is true, but I want to jump in right away and say, I'm not a prophet. I didn't say this is the only possible outcome. You know, me, I'm not the guy to make these bold predictions that may or may not be true.
Uh, without naming any names, we know there've been some guests on your show who made bold predictions for what was going to happen before the election. And, uh, but it's important, right? You look forward, you look at probabilities and yes, it was, I think it was pretty predictable that if there I said it predictable.
You know, if there was big news and a 90% effectiveness rate, that's, that's big news. That's more than any of the experts were expecting. Uh, so yeah, that's big news. There was a knee jerk reaction way over done. Lots to talk about in there. And I think the source of opportunity, why was it overdone? I mean, it wasn't, it's not it's you don't think it's a fair move.
And I mean, we talked about this before. But, uh, in your opinion, the long-term fundamentals for gold haven't changed. So, uh, so isn't that just, you know, the market correcting its course and just going from there. When did she say let's, let's actually come back to gold and silver. Uh, let's look at the markets like the overall market reaction was ridiculous.
Now, if. If wall street had been down at the bottom, right. If it had crashed in March and never recovered and everything was in the doghouse, and then there was good news, like better than expected news on the COVID front, then actually it would make sense for things to take off and go vertical on, on this great news.
Uh, but that's not where we are. We're still, you know, close to all time highs. We reached all time highs yesterday and some indices, at least intraday. And I mean, just, just look at movie stocks. Rising 50% in one day. That's ridiculous. Those companies are not worth 50% more than they were the day before or some of the at home traits.
I don't remember the names, but I was listening to the tickers yesterday. Some of the stay-at-home traits dropping 20% or more in a day. It's not like suddenly everybody's going to stop using zoom or that. Something like zoom or some of the, you know, work at home technologies. Weren't already on the rise of before COVID-19.
So I think yesterday's reaction. You look at the big picture, all that happened. It's clearly an overreaction. Now. I'm not saying that the vaccine isn't good. I'm saying, just look at what happened. It's totally out of proportion. Here's a question that I got from a viewer. If gold reacted the way a day yesterday on just an announcement.
What's it going to do when the vaccine actually comes out. Well, so wait, this is actually the subject that you asked me about last week. And while we got into this not prediction, but looking at this possibility, and I think it's really important to bear in mind that nothing has changed. And the reason why gold was rising, you know, that started with the pal pivot.
It started long before COVID-19 was a dark shadow on anybody's doorstep. Uh, gold was already having a good year before the COVID-19 thing happened. So. All that. All that we can say about this is that maybe COVID 19 was a tailwind and maybe that tailwind goes away. And that's why I don't see yesterday as any kind of sign of change.
It was a knee-jerk reaction. Oh, You, you know, COVID is going away. So that's bad for gold, but that's, what's true in the heads of people who thought that gold was only up because of COVID, but that's not the case. You talked about the possibility of a crash in gold and other markets. Would you see, would you call it yesterday's move a crash?
Would you use that word? No. No. I mean, 4% in the same day, technically a correction, right? We don't reach 10% is that's not even typically a market correction for gold. It was a big move. And it was, I think, an opportunity for people to understand that what's going on with monetary metals gold and silver is fundamentally driven by monetary and fiscal policy, not the COVID center.
Okay. So if we don't, if we don't, if the vaccine is enough to cause a crash, what is the elbow? What would be a trigger for gold market crash? Well, let's say it's not just this vaccine. Let's say there's a bunch more good news. You're asking me for a bear case here. Okay. So here's a potential bear case. I don't believe this will happen, but I'm answering your question.
Uh, say there's more, uh, progress on, on not just the vaccine, but treatments. And let's say that the second wave happens, the shutdowns are effective or maybe not even necessary. Treatment is effective. And, and the whole thing just kind of blows away. And before the new Congress, whether or not the Senate in the U S is democratic or not before the new Congress gets in before the new administration gets hold.
But if there is one, you know, before all that easy money could happen, it's canceled, right? If, if the school and monetary policy suddenly turns, um, or hawkish. Now, this is really a stretch, you know, but you asked me, so I'm telling you, so, you know, defense starts talking about raising rates and Congress starts saying, Oh, everybody's fine.
Everything's fine. We don't need any more money. Um, you know, that would be bearish. And I think I would still make a fundamental case, but I think that would make 20, 21, a really tough year for monetary metals. I think the odds of that are pretty slim though. You're giving the best case for the economy and as a result, the worst case.
For stimulus. Well, that makes sense. Okay. Well, let's take a look at your tweet that you issued a Y that you, uh, that you made, uh, last week. I'm just going to read it. I know this be contested, but if Biden is sworn in, he'll shut the economy down this winter more than Trump would have. So right off the bat, I know that you think that's best case for the economy is unlikely to happen, but let's talk about your tweet here.
Why do you think Biden is going to shut the economy down? More than Trump would have. I mean, just look, it's a, it's a political thing. If only to be not Trump, if he's sworn in as president, he's going to wear a mask and he's going to do everything that Trump wouldn't do or, or push in that direction. I think that's sufficient psychological cause here.
Uh, but actually nevermind what I say or what I think, uh, look at what he said, his speech as you and I speak it was yesterday. Um, Monday. He gave a speech about what he was going to do about COVID-19 and he talked about national shutdowns national mask mandates, and I've got a lot of pushback for that tweet.
You mentioned people say, Oh, he's the president. He can't just shut down the economy. Well, no, I mean, executive power has its limits though. We have seen those stretched, I think, beyond the constitution recently. Uh, but he can do a lot and certainly leadership counts this, the governors that support him, that local governments that support them would follow that lead and he can do things on the national level.
He could order a federal employees to do things that would make noncompliance with his national mandates or national plan. Very difficult for local communities, even strongly Republican ones. Why would he need to do this? We just got a vaccine announcement. It's a magazine announcement is a vaccine that needs to be kept at minus 80 degrees.
It needs two doses. Isn't going to be ready in mass numbers until next summer and winter is coming. All right. So, so you don't think Trump would have done this? I, if he might've been pushed into it or the States might have done it, even without him, that's why I didn't say it was a choice between shutdown or no shutdown.
It was a shutdown, excuse me, the choice between some shutdown and more shutdown. All right. So basically what you're saying is the U S economy will be shut down and get well is likely to be shut down again. We're seeing that in Europe right now, that's happening right now in France and Germany. Right? The last time too, it started first in Europe and then it came to us.
There, there might be political will in the U S to be more resistant to it. But as the case counts rise, and as hospitals start getting overfull and nevermind if the case counts, aren't real. Like if you're one of those people that thinks everything's being called COVID-19, even if it isn't, if the numbers are there and the hospitals are full and governors and mayors are declaring emergencies, you're going to see a response and in a litigious society, such as we have today in a politically correct world, such as we have today, uh, the probability of the United States just ignoring, you know, this huge upswell of panic.
Basically zero low bar. I'm just going to point out that I don't think the stock markets are agreeing with you this week. Look what happened to the indices last week, continuous rise, you know? Right. So actually I think the markets are agreeing with me. The markets are saying vaccine, no vaccine. There's more easy money on the way.
And Ooh, it's party time. You know, one thing that surprised me was that, uh, the markets rallied the way they did given that, uh, uh, Biden was leading in the, uh, in the election. Now, most analysts I've spoken to have said that a democratic president would impose some sort of restrictions on investments. You know, he wants to raise capital gains taxes.
He wants to raise corporate taxes and whatnot, and yet markets continued to rally. How does that make sense? That makes sense, because any, if you look carefully at the patterns, right, the market seemed to be happier when Biden was in the lead, but it's everybody expected the Republicans to hold onto the Senate.
A split government meant that the Senate was going to veto, whatever crazy high tax ideas they might try to put through. So you would get more stimulus, which is good for the market, but you'd get government gridlock on any major negative changes. So that was a great combo, more easy money. Less taxes going through.
And then when that changed, when it hung up at 48, 48 and people started Holy cow, you know, it could be, you know, that democratic sweep could actually happen. That's that's when markets started, uh, getting more jittery. So you don't think that, uh, we're going to get a tax increase before January, let's say.
No, I don't. No, there's no chance of that. Trump is still president and until January, the Republicans still control the Senate until January. At least they may hold on to it, but no nothing's going to happen. Yeah. You also said that you also said in the tweet that it's a contested election. So how long is it going to stay contested you think?
I think there's actually a statutory limit to that. I'm not an expert on this issue. Um, I, I don't think that the legal challenges are going to do much good for the Trump team. A couple of them have already been thrown out. I think the recounts have a better chance of possibly doing some good, but again, there's a time limit.
I think that has to be decided sometime by December. And I think likely it will be. Okay, well, the last sentence with the last part of your sentence, uh, they might a little blame COVID-19, but for one socialism might also get some of the blame for the trouble. What do you mean by that? Lobo? I mean, shutting down the economy again, I'm just playing devil's advocate to your tweaking, shutting down the economy.
It's supposed to be a health issue. It's not supposed to be a political where yeah, yeah, no, I get it. I get it. So it seems like you get somebody like Ronald Reagan. Uh, and he talked about reducing the size of government and cutting taxes and, and gay capitalism, free markets. And, and there was a lot of economic, uh, trouble after Reagan's tenure.
And that was blamed on Reagan was blamed on what he talked about. But the fact is that Congress increased taxes. Congress increased spending on the Reagan years, more than ever before. I don't have the numbers off the top of my head, but it was something like four times more on the national debt after.
Reagan than before Reagan. Um, but capitalism got blamed for a lot of government spending or what I would call socialist leaning government movements. And so Trump. You know, he talked a lot about capitalism and he did reduce some taxes and customer regulations. I'm not saying it was all talk, but he certainly didn't put the economy on a hardcore free market basis.
And so a catastrophe blamed on Trump could be blamed on capitalism. Whereas if, um, you know, the second way through is more difficult than people are expecting now. And we have a lot of more, you know, shutdowns, you can have firings job losses. If the wheels fall off under the Democrats, watch. Then maybe some of that blame will go towards the more socialist leaning policies of that administration.
A little bit of karmic justice there. If it happened. Okay. We're going to do a little speed round. I love playing this game with our guests. And, uh, so I'm going to give you a bunch of scenarios and just all you have to do. I know you don't like giving predictions yes or no. So you can say highly likely or highly unlikely.
How's that? Alright, we're going to start with the first one, which you just talked about a contested election. Biden getting into the white house by January. I think that's likely. Okay. Uh, another shutdown, the messenger. I'm not saying I want that to happen. I'm saying, I think it's likely another shutdown for the economy for all States.
Oh, all States. I doubt that. But major national shutdown, likely New York, you know, Chicago. Seattle Los Angeles, those kinds of places shut down. Okay. Goal to rally another 20% before the end of the year possible. It depends on the, on the outcome. Okay. Go gold to crash 10% by the end of the year, I think unlikely, unlikely S and P 500 to crash before the end of the year.
That's possible. I'm going to lean towards unlikely. I think it would take. A bigger scare coming in and people are hopeful. Now you don't think there's a shut down of major cities enough to crash the markets. Lobel I think that'll start happening maybe towards the end of the year. I don't, I don't think it's going to happen tomorrow.
So. As winter comes, winter is coming. Right. But that's not necessarily by the end of the year. If you, if we were talking to six months, I might give you different answers on some of these, but we're talking to one and a half. Okay. All right. Yeah. Let's just stick to the end of the year because you know, anything's possible in six months to one year, a fiscal stimulus bill passed before the end of the year.
Unlikely unlikely because of the divided Congress right now. Yeah. I just don't think there's much mood to be cooperative right now. Certainly not. While the elections contested. All right. Trade Wars, will they continue likely likely, you know, I am going to mention that, uh, Biden has basically announced, right?
He has announced publicly that his primary objective during his presidency is forced to return to normal. Right. That a return to normalcy is what first item on the agenda is. And yet you're saying that the first thing he's going to do is shut us down. I hear you. But you know, he said, end of the year, you said, end of the year, he's coming in January.
So doesn't matter what he says. I don't, I don't think the Chinese are going to suddenly be more cooperative now with Trump because Biden might be coming in. So even though Biden basically wants to reopen the economy again, first he's going to shut us down. And then reopen it once the vaccine is going to come out, is, is your prediction no prediction because that's not quite what we were saying.
We're talking about the trade war, shutting down the economy and ending the trade war are no, I'm going to make it. Yeah, I'm going back to the economy for a second here. Yeah, I, you know, Biden, he says he wants to reopen the economy. He said that in his speech, but to do that, we have to do the right things for COVID.
Everybody has to wear a mask, social distance downs, you know, we have to beat COVID first and that is the path to reopen in the economy, according to him. So. Not now, not January, maybe next summer. All right. Finally, let's talk about uranium. I know you like uranium. Do you have any updates on your views?
Well, one uranium is still having a great year. People hate it when things aren't going up, they're only happy when they're going up, up, up, but if they're, if they remain relatively high, that's not good enough. So, uh, first fact is just uranium is having a good year. Second fact is the fact that the price has not gone back down despite all the energy levels, like even in March when oil went negative, right.
Uranium didn't panic. Didn't really change that much. It. And actually they had a good quarter. Um, and this reason, or a prime reason for this is remember that uranium is used for nuclear power plants, which are great for base load power. This is not like wind that you use sometimes, or reserves that come on.
This is base load power when you need your lights to stay on and hospitals and city cores and so on. Yeah. That's where, uh, nuclear power does best. And that I think doesn't make it immune to all economic shocks, but makes it more resistant to economic shocks. You just don't switch off a nuclear power plant overnight because you know, you know, people are so, so I'm very bullish.
And I think the fact that prices have held up means that the secondary supply, that beat prices up so much. Is no longer swamping the market you add to that overt shutdowns and so on. I think uranium will have a great 20, 21 Iranian moved much this week. Um, even though crude oil. Did, do you think there's a correlation there?
I know, I know crude oil moved up on expectations that there's going to be stronger demand because of the vaccine. What about uranium? But that's part of what I'm saying. I, I. You know, the fact that uranium didn't move that much with crude oil tells you exactly what I'm saying. Right? If, if my thesis is that there's, winter's coming and there's more problems for the economy, uh, that's bad for oil.
Uh, uranium is less driven by that. It really comes down to these long-term contracts in that space. This, this isn't a big spot market like oil. I mean, you have long-term contracts that are almost all rolled off and the buyers, they might say, Oh great. We can buy, you know, below long-term prices on the market.
But at some point they need secure supply. They can't rely on spot markets forever. There, the big utilities are going to need long-term contracts and the miners are just not going to sign them anywhere near current prices. So I'm very bullish and I think uranium is not immune, but more resistant to all this economic turmoil that you and I are talking about, then oil or other energy commodity resources.
So one last point before we, uh, before we, uh, end the conversation here, Biden also wants to, uh, reenter into the Paris accord. How does that affect energy prices? Well, uh, yeah, I think that's shadow over the oil patch going forward, but again, these things take years, right? So, so by and mantras, the Paris accord, we move towards these goals and things.
Again, no, that's not good for coal or oil, uh, but it's, it's a years long phenomenon. It is actually I think good for uranium. And it's interesting that the Biden campaign has come out as pro advanced nuclear. I think. Most, uh, not, not just insane, the extreme people in this space understand that there's a role for nuclear if you're serious about reducing carbon emissions.
All right, Lobo, great talking to you as always. Thanks for coming on the show today. Thank you, David. And thank you for watching Kitco news. I'm David Lynn, stay tuned for more. .