Over the weekend Trump took to Twitter to foment anarchy in order to pressure governors into re-opening the economy. He is throwing matches at a dry tinderbox hoping it will explode.
"Echoed across the internet and on cable television by conservative pundits and ultraright conspiracy theorists, his tweets were a remarkable example of a president egging on demonstrators and helping to stoke an angry fervor that in its anti-government rhetoric was eerily reminiscent of the birth of the Tea Party movement a decade ago."
Trump knows that Joe Biden merely needs to remain on life support through November to win the election. The Coronavirus has exposed his Potemkin economy for what it was all along - history's largest con job. Now, no amount of sugar stimulus can get the Ponzi scheme back on track. So he has nothing to lose by using his two hour rambling daily "briefings" to provoke his base into disobeying lockdown orders.
We have only seen the beginning of this provocation and in the meantime, the dry tinder grows by the day. He knows that he needs to deflect from the fact that these stimulus gimmicks are not working.
The U.S. food supply chain is on the verge of breaking down from end to end. First off, over half of the food supply was designated for restaurants and cafeterias, which couldn't be saved in time to repurpose for grocery stores. In addition, the virus itself is taking meat packing plants down across the country like dominoes. Also, the number of migrant workers has been curtailed by the various border lockdown orders. Meanwhile, grocery store workers are starting to get sick and protest as well. On top of all that, food banks are seeing record demand and beginning to run out of food.
It's not hard to imagine a scenario in which a food panic erupts into wholesale anarchy amid mass shortages. This nascent anarchy will put more and more pressure on the governors to open up the economy and with Trump on the side of anarchy they will have no choice but to capitulate.
When the economy re-opens, sooner rather than later, deaths will spike massively. First responders will be overwhelmed, from hospital workers to the police. Old age homes will implode. The stock market will collapse. Panic will explode.
That is my latest prediction for the coming weeks and months. We should all have at least a month of food in supply at all times, from this point forward.
The second lockdown will be under martial law.
Getting back to the casino...
All the Fed has done over this past month is solidify the belief that central banks are invincible. Which has further emboldened investors to ignore risk.
Throughout the record decline in March, there was never any sign of true investor panic. The subsequent bounce has further convinced bulls that printed money is the secret to effortless wealth.
Which is why they are no longer hedging. As we see they monetized their hedges into the March decline.
Now, with the VIX still in the high 30s, it's too expensive to hedge.
I call what comes next, "Third wave everything" - meaning a panic selloff in all risk assets at the same time.
We see the exact same three wave retracement in every chart:
Any questions?
