The Markets Are Running Like a Pack of Wild Dogs

'The Last Great Race' goes on... Invisible money versus an 'invisible enemy'... The markets are running like a pack of wild dogs... A recession in the making... The case for gold and silver... A 'nuclear bomb of stimulus'... A $20-something oil world... Don't miss our 'crash event' tomorrow night...

At least the sled dogs are still running in Alaska...

There is one sporting event still happening in the U.S. today... the legendary Iditarod race in Alaska.

Even before all the craziness we've seen over the past few weeks, the annual sled dog event was the epitome of "social distancing." It's a 975-mile trek, one human on each sled with a pack of dogs pulling him across the snowy Alaskan landscape.

Alaska might bring to mind images of isolation, but the Great White North is not totally immune to COVID-19. Race organizers took their own precautions against the virus... like moving check-in points to the outskirts of the small towns that dot the Iditarod trail.

But what's long been referred to as "The Last Great Race" – an ironic nickname today – mostly went on as planned... And just past midnight local time this morning, Norway's Thomas Waerner and his dogs crossed the finish line in the town of Nome to win the 48th annual race in roughly nine days and 10 hours.

A few dozen other mushers, and many more dogs, are still on the trail as we write.

Asked about the circumstances afterward, Waerner said, "We mushers are so lucky that we are in our own world." Then, reality set in... "There will be some problems getting home," he said.

His dogs got snacks. Waerner won a new truck and $51,000.

We wouldn't blame Waerner for keeping the cash in his pocket right now...

There will be opportunities to make a significant return on a long-term investment. But as we've said over the past few days – and as our editors spoke about in our "Town Hall" earlier this week – now is not that time.

The markets are running away like a pack of unchained wild dogs...

Record stock market volatility... major uncertainty in the bond and credit markets... and mortgage rates going from record lows to higher than 4% (for a 30-year fixed loan) in a little over a week. Almost every day, a new federal "stimulus" measure is trotted out.

Invisible money versus an 'invisible enemy'...

With the market's reaction to all the stimulus efforts we've already seen, it should be pretty clear by now that invisible money – declared official by the Federal Reserve out of thin air – can't win a fight against the "invisible enemy" of coronavirus, as President Donald Trump described it at a White House press conference this afternoon.

Things like low rates don't do much when no one is going outside.

We can sum up the economic supply and demand shock, just as a national grocery store chain told us on its website this afternoon when we tried to place a pickup order...

Due to limited supply and high demand, we have implemented limits on several items. We apologize in advance if these items are out of stock.

In New York, during a press conference today, Gov. Andrew Cuomo asked manufacturers like General Electric (GE) and Koninklijke Philips (PHG) to help supply ventilators to medical providers... to keep up with a growing need to keep infected people breathing and alive.

After a staffer rolled a ventilator into the conference room for visual effect, Cuomo said...

Our main scramble now is for ventilators. This is a respiratory illness. The machines are commonplace in hospitals. [but] the number we need is much higher.

We can create more beds, but it's literally the supply of ventilators we need. Countries all over the world are trying to get these devices.

This reminds us that Stansberry Venture Technology editor Dave Lashmet warned of this nationwide shortage in ventilators weeks ago. In an e-mail to us on February 27, that followed up the prescient warnings about coronavirus he made in that day's Digest, Dave said...

What public health officials are trying to do with quarantines and travel barriers, etc., is to slow down the rate that patients hit the emergency room and intensive care units.

Until there's a treatment and a vaccine (both), if we can keep the run rate at hospitals at the speed they can handle, everyone gets better care for coronavirus, and every other condition that brings folks to the hospital.

Particularly, again, look to ventilators... That's the sort of math that hospitals and public health officials all over the world are weighing now.

The U.S. Department of Defense said it can provide up to 5 million respirator masks and up to 2,000 ventilators – to help keep infected patients breathing – to the virus prevention and treatment effort.

The Federal Emergency Management Association ("FEMA"), which we hear about mostly when it's helping out with hurricane and other natural disaster-relief efforts, is now involved in the COVID-19 operation as well.

This is alarming stuff, for our health and wealth... and it's a lot to keep tabs on.

To help subscribers keep up with everything going on each day, we've recently added a "COVID-19 Information Center" section to the Digest and Stansberry NewsWire pages on our website.

We've also now unlocked Greg Diamond's Ten Stock Trader analysis for free...

As we said on Monday, you can now find Greg's real-time Ten Stock Trader feed on the right side of StansberryResearch.com or at the Ten Stock Trader archives page right here.

You'll find Greg's market commentary throughout the day, which analyzes the market's action through the prism of his expertise as a technical trader and Chartered Market Technician.

In fairness to Ten Stock Trader subscribers, we're still keeping Greg's trade recommendations private to paid customers. But we believe all readers may find his brand of analysis particularly valuable in this exceptionally volatile time.

For instance, here is one of Greg's posts from earlier today, when the benchmark S&P 500 Index was trading below its 2018 low of 2,300...

Any rally on a stimulus package is a sell. We've had one-day rallies and then a crash... It's historic.

An official 'recession' hasn't been called – yet...

And it won't be until we get the associated numbers and metrics in the coming months. But it's hard to think we're not in one already, or at least on the way, depending on your definition...

Our Dr. David "Doc" Eifrig and his research team told Retirement Trader subscribers as much late last week. In their most recent issue, they described three possible scenarios ranging from a major pullback to a recession and financial panic...

This could be just a serious market pullback – albeit a panicked one. The economy will chug along just fine. Corporate earnings may get dinged, but it won't be anything that changes the long-term value of businesses. If that's the case, we would see a pullback of around 10% to 15%.

Or on the other hand, things could be worse. We could see full shutdowns of nearly all events and less travel, both reducing revenue in every part of the economy. Consumer confidence will wane, and we could quickly slip into a recession. If that's the case, a pullback of around 20% to 30% is plausible.

Beyond that, the economic recession and health catastrophe could push things into a financial panic. Businesses could turn down so much that borrowers can't pay their interest and bonds could collapse. No one will want any risky assets of any kind. Were that to happen, the market could fall 35% to 45%.

As of today's close, the major U.S. indexes are now down 30% from their February highs...

Stay tuned for more from Doc and his team. Tomorrow, they'll share another major market update and a discussion about a recession in the newest issue of Income Intelligence.

The case for gold...

These are times when holding a good amount of cash is not a bad option. Stansberry's Investment Advisory lead analyst Alan Gula told subscribers that in a special update earlier today...

We think it's prudent to stay in cash for now. It's better to hold onto the cash until there's a definitive uptrend in the market or improving data on the virus.

But if you're getting "cabin fever," now is a good time to watch the precious metals market, specifically gold and silver... However, remember to be patient in both markets, as several of our editors have emphasized lately.

Longtime Digest readers know many of our editors refer to gold as a "chaos hedge." As such, many of you have written in with questions about why the precious metal has not performed well during the current wild times.

There are a few reasons...

Extreme Value editor Dan Ferris and True Wealth editor Dr. Steve Sjuggerud talked about them in Friday's Digest and again on Monday (around the 44-minute mark of our Town Hall event).

Today, we checked with legendary gold investor and editor of Gold Stock Analyst John Doody for his take, as well. If you know John, you know he believes in practicing what you preach.

And he started out by telling us that he bought some gold just yesterday.

Like Dan and Steve, John also said the only historical reference to today is the 2008 crash... Back then, gold went down initially before it outperformed stocks in the following years. As John told us in an e-mail from sunny Florida this afternoon...

The S&P 500, gold and the Gold Stock Analyst Top 10 were all down in the first few months [of the 2008 crash. But] gold returned to its breakeven level first and then went on to soar 100% in the next several years.

The GSA Top 10 was back at breakeven nine months later and went on to gain 200% by 2011. The S&P 500 did not return to breakeven until almost three years later in 2011.

John also said, "Long term, all the money being thrown into the system, like in 2008, will send gold and gold stocks higher."

The case for silver is strong, too...

Silver is gold's more volatile little cousin. It tends to rocket higher when gold moves up... and drop lower when it goes down.

This morning, John's colleague and Silver Stock Analyst editor Garrett Goggin told subscribers that he has never seen a better opportunity to buy silver since 2008...

The scope and severity of the recent sell-off in assets across markets was so fast and so strong that silver is now trading at its largest-ever discount to gold – 47%.

Consider that at the worst point of the 2008 financial crisis, silver reached a 38% discount to gold.

Garrett said the coronavirus pandemic is driving financial markets of all kinds around the world... including precious metals. And "it seems silver is being liquidated as funds are forced to sell to meet margin requirements."

But despite the recent downturn, Garrett says nothing has changed about silver's role in your portfolio... or as an asset that performs well when investors lose confidence in paper money.

A 'nuclear bomb of stimulus'...

Given what the Fed has done already and the more money-printing he expects to come – "a nuclear bomb of stimulus," Garrett told subscribers – he says you may never have a better buying opportunity in silver than today.

And he eyes a big run higher in gold prices, too...

The federal debt was already colossal... And in the wake of the coronavirus pandemic, it's going to absolutely explode.

As all that paper money works its way through the financial system, it will send precious metals prices soaring.

This is what silver and gold investors have been waiting for.

This unprecedented money-printing will push gold to new highs. I suspect gold will trade for $2,500 an ounce in the not-too-distant future.

Meanwhile, oil continues to tank, putting debt-ridden companies at risk...

The price of Brent crude oil, the international benchmark, fell 14% today to around $25 per barrel, as we write... And even worse, West Texas intermediate crude oil, the U.S. benchmark, has dropped 24% to about $20 per barrel. That's two 20%-plus drops in prices in only eight trading days.

Many overleveraged U.S. shale companies were facing the prospect of major defaults... even before Russia and Saudi Arabia recently started an oil-price war. They've promised to flood the market with supply... in the middle of a global supply and demand crisis.

That should work out well (sarcasm included)...

Our colleague Bill McGilton has been all over this story, saying months ago that many companies' "cost structures can't keep up in the world of $60-something oil... let alone $50-something oil... or the current environment of $30-something oil."

Now, we're living in a $20-something oil world...

We shared Bill's thoughts most recently in last weekend's Masters Series.

According to Norwegian energy-research firm Rystad Energy, new oil projects, on average, require a minimum of $60 per barrel just to break even...

Leveraged companies with huge debt on their books to fund more expensive oil projects with high breakeven costs (like offshore and deepwater drilling) are in real trouble.

Companies like Chesapeake Energy (CHK) and Antero Resources (AR) are struggling to hang on... hoping for higher oil prices.

Many of these companies not only can't make a profit... They can't even service their debts. Many are running out of money and can't borrow more. And one by one, they're going bankrupt.

What's more, debts these companies took on during the $100-per-barrel days of 2011 through 2014 are coming due now... $203 billion of oil and gas debt is set to mature from 2020 through 2023.

And Bill explained why he was putting on a trade against an overleveraged energy company in his January issue of Stansberry's Big Trade. That position is now up more than 200% in just two months.

If this isn't the week for a 'crash event,' we don't know what is...

Don't forget about our special event with Bill at 8 p.m. Eastern time tomorrow night.

Bill recently sat down with our video folks to record a brand-new presentation about his trading strategy... which recently recorded three triple-digit winners in eight trading days.

Moreover, six of Bill's 11 current positions are up more than 120% right now.

During tomorrow's event, Bill will detail how you can use his brand of investing to make money when everything else seems to be losing its value. Click here to sign up for this entirely free event if you haven't already.

New 52-week highs (as of 3/17/20): General Mills (GIS) and short position in HCA Healthcare (HCA).

In today's mailbag, one subscriber's note made our day, while two others share what they think is coming next... Do you have a question or comment? Send your notes to feedback@stansberryresearch.com.

"To all of you, I want to thank you all (though I feel I can't thank you enough) for the great learning experience I have had over the last 12 years! As this correction/panic unfolded and I saw how people were reacting I came to realized how calm and collected I was and the confidence I had.

"I started writing notes as I thought about the different courses this scenario might take. Watching stocks, bonds and precious metals I started thinking that things weren't quite happening as I thought I learned they should.

"I tightened up my trailing stops and didn't hesitate when they were hit... no worries I can buy back in anytime. As the stock market carnage continues this morning I'm sittin' on my pile of cash grinnin' like a butcher's dog. All of this above made possible by the hard work of all of you. THANK YOU VERY MUCH!" – Paid-up subscriber Greg R.

"Why do I get the feeling the Jubilee is on the doorstep with all the printing in the last week?" – Paid-up subscriber Mark L.

"When this dies down, those with cabin fever (and there will be many), will unleash their unspent dollars into the service economy in a very drastic way." – Paid-up subscriber Greg H.

All the best,

Corey McLaughlin
Baltimore, Maryland
March 18, 2020