The next two jobs reports from the BLS will put the final nails in the coffin. When the unemployment fall-out from this carnage is recorded, the markets will capitulate big time as it will signal that there’s a system melt-down that cannot be saved by throwing money at the problem. And they will probably keep throwing money at it anyway. When you’re a hammer, everyting looks like a nail.
Gold rockets in a panic. And that’s what’s happening right now. The world is losing faith in the fiat money system. There’s every indication that gold will climb both in real and nominal terms for the next two years. Valuations on RE and equities has to come back down to reality. Homes at 3 to 4 times income and equities at 10 to 12 P/E’s. There’s a reason these historical norms exist. But look for over corrections as that’s normal for markets as well.
