Since mid-March, the response of governments worldwide to the covid-19 pandemic has led to disrupted mining activities across the globe.
A total of 32 countries have passed partial or complete lockdown orders, leading to the temporary suspension of activities at over 1,600 mines as of April 3, though that number has since dropped down to 729 as restrictions begin to ease in certain areas, analysts at GlobalData report.
The exempted mines are, however, still operating with reduced numbers of workers to minimize the potential spread of the virus, which is causing a slow return for an industry that has already seen production hit by restrictions.
Among the mining activities affected by covid-19, silver production has been the biggest victim, with nearly 66% of the world's annual output still on hold.
Thread by @RaoulGMI: The Dollar Wrecking Ball: I hear the narratives that the Fed is printing money...Brrr... and that is going to cause a dollar collapse. I wor…
"You see, the biggest problem the world faces is the dollar. We are in a viscous doom loop where slowing growth causes the dollar to rise, which causes slower growth, which causes the dollar to rise, as all borrowers play musical chairs to get access to the dollar to service debts"
...
The global system is just not set up to deal with this. It is an UGLY situation with almost zero options without a change in the entire system. No printing of money will solve this. It is structural.
And the change in the system is what gold is picking up (amongst many other things). All attempts to create more money to solve the dollar standard issue tends to devalue all fiat versus gold. Gold is rallying on debt deflation probabilities.
Read this excellent thread by Raoul Pal on why the Dollar won't be collapsing anytime soon...
Thread by @RaoulGMI: The Dollar Wrecking Ball: I hear the narratives that the Fed is printing money...Brrr... and that is going to cause a dollar collapse. I wor…
The Dollar Wrecking Ball:
I hear the narratives that the Fed is printing money...Brrr... and that is going to cause a dollar collapse. I worry that this narrative is very wrong. My strongly held view is that the dollar is the pinnacle of all the macro issues we face. 1/
The Fed have undertaken unprecedented printing, as we know, and the balance sheet is growing exponentially.
But it is not that simple. We live in a relative world where the dollar standard is the very cause of many of the issues we now face. There are simply not enough dollars available in the world to service all the debts and thus a debt deflation remains the BIG RISK.
The expansion of the balance sheet is in fact correlated to the rise of the dollar, not the fall. Here is the Fed Broad Trade Weighted Dollar Index versus the Fed balance sheet.
And since last year, when the global slowdown started, the two are joined at the hip...
People have been looking at the messy chart of the DXY and have been quick to call the end of the dollar rally.... but to me, the DXY broke a small wedge pattern.
And a break of the 103 high would break the neck line of a large cup and handle pattern....
Which, in turn, would lead to an acceleration phase of the bigger downward sloping wedge break that I have been following for most of the last decade.
The Fed Broad Trade Weighted Dollar Index is even more concerning. It has broken out of a massive cup and handle and is at all time highs and appears to be accelerating... (and this is without the RMB moving much...yet).
The magnitude of this pattern is mind blowing... here is the long-term chart going back to the 1960's.
This is matched by the size of the top pattern in the Asian currency index, which is so big that its almost beyond comprehension...
And the short term chart of the ADXY looks like it's about to break lower...again.
But it's not just Asia...the entire Emerging Market FX complex is in FREE FALL...
And that brings us back to velocity of the money that the Fed is printing... it is plummeting and that is crowding out the weakest borrowers, in this case EM FX. This is the very essence of a DEBT DEFLATION.
This year alone has been a blood bath of currencies versus the USD.
And since the Fed started "Haha...the money printer goes Brrr.." The situation has gotten no better..
You see, the biggest problem the world faces is the dollar. We are in a viscous doom loop where slowing growth causes the dollar to rise, which causes slower growth, which causes the dollar to rise, as all borrowers play musical chairs to get access to the dollar to service debts
Dollar swap lines, QE, jawboning, etc have done nothing to stop this. Nothing. The issue is here that swap lines cant help the weakest sovereign borrowers as they have no reserves. And the $13trn dollar short is held mainly by corporations, which struggle to get access to dollars
due to the fact that they are suffering massively weakened cash flows from trade tariffs, collapsing commodity prices, slowing world growth and a shrinking US trade deficit... (tariffs, oil and slow growth).
The global system is just not set up to deal with this. It is an UGLY situation with almost zero options without a change in the entire system. No printing of money will solve this. It is structural.
And the change in the system is what gold is picking up (amongst many other things). All attempts to create more money to solve the dollar standard issue tends to devalue all fiat versus gold. Gold is rallying on debt deflation probabilities.
Bitcoin will be part of the equation but has yet to make any serious move against this backdrop. Its time will come...
My guess is that the next Debt Deflation signal will come when bonds begin to price in negative interest rates. That day is coming soon...
Here are 2 year yields:
And here are 5 year yields:
And that will be the signal to sell equities and the INSOLVENCY phase will begin.
Coronavirus: the situation in Switzerland - SWI swissinfo.ch
Coronavirus: the situation in Switzerland
A shopper taking advantage of the chance to buy home improvement supplies on April 27, the first time in weeks
(Alexandra Wey/Keystone)
Switzerland has eased unprecedented Covid-19 restrictions in a bid to avoid further damage to the economy. This is where things stand and the latest on the measures in place.
An "extraordinary situation" is in place, resulting in a ban on all private and public events and the closure of schools, restaurants, bars, sporting facilities and cultural spaces.
A three-step easing of emergency lockdown measures began on April 27. With protection measures for staff and customers, hair stylists, beauticians and physiotherapists can re-open their doors, along with florists and garden/DIY stores. Dental and medical centres can offer non-urgent care.
In announcing the easing of measures, the government urged the population to continue following social distancing and hygiene recommendations. The ban on gatherings of more than five people remains in place.
The government has decided not to impose a general obligation for the public to wear face masks as it relaxes restrictions.
The government has issued a recommendation to all citizens to stay at home, especially the sick and the elderly. It has announced various measures to help support the economy.
How does Switzerland plan to ease the coronavirus lockdown?
The federal government announced on April 16 an easing in three steps of measures aimed at combatting the pandemic. The deliberate approach to loosening the lockdown is based on recommendations from experts and the weighing of a number of factors, the government said, including the need to continue protecting the public, particularly those at high risk, and the economic benefits of a gradual lifting of measures.
In the first phase, which began on April 27, hair salons, physiotherapists, hospital outpatient services, medical and dental offices, florists, DIY shops and garden centres were allowed to re-open with precautionary measures in place. This may include wearing protective face masks.
Measures that currently restrict funeral services to immediate family will also be lifted during this phase. However, a plan to allow supermarkets to sell non-essential items has been put off until May 11, following a storm of protest from small businesses. Supermarkets and pharmacies have remained open throughout the crisis.
On April 29, the government will make a decision on whether to proceed with the second phase, which would begin on May 11. Schools for children of compulsory-school age would re-open, along with all shops and markets. It is possible that restaurants will also be allowed to re-open.
A third phase would start on June 8 and see the re-opening of upper secondary and vocational schools, plus universities and other higher education institutions. Further decisions on this phase, including the possible lifting of bans on entertainment and leisure facilities, such as museums and libraries, will be taken at the end of May.
The government will decide at a future sitting of the Federal Council when to allow large-scale events to take place again.
To protect staff during the phase-out of lockdown measures, employers must allow those at especially high risk to work from home or adapt the work environment and procedures. High-risk persons can also refuse to work if they consider the risk to be too high and be entitled to leave with pay.
Lockdown measures in place since March
Due to the spread of the coronavirus, the government categorised the situation in the country as "extraordinary". This allows the authorities to take over certain powers from the 26 cantons and to impose measures, including bans on events. The application of these legal provisions is a first for Switzerland.
The government ordered on March 16 the closure of bars, restaurants, sports facilities and cultural spaces. Only businesses providing essential goods – such as grocery stores, bakeries and pharmacies – were allowed to stay open, along with banks and post offices.
The federal government also introduced a countrywide ban on gatherings of more than five people in public places. Schools and universities are also closed, although some are turning to online and distance learning.
The government still recommends that the sick, and people 65 or older, stay at home.
Major events have been cancelled, including the Geneva International Motor Show, the Montreux Jazz Festival and the Baselworld watch fair. Art Basel, originally scheduled for June, has postponed the fair until September.
All top-flight Swiss football and ice-hockey games have also been called off, as have numerous local social, political and cultural events.
The Swiss Post has reduced services. It can no longer send letters or packages to a long list of countries due to the cancellation of many international flights.
The planned nationwide ballot scheduled for May 17, which included a proposal to scrap an accord with the European Union on the free movement of people, has been postponed. A new date will be set by the end of May.
What's the current situation in Switzerland?
Switzerland is among the countries most affected by the pandemic in Europe, with over 28,000 cases and more than 1,600 deaths. Cantons Ticino, Vaud, Geneva and Valais are the hardest hit. The rate of new coronavirus cases, however, began to slow over the Easter weekend, and the number of people hospitalised has stabilised.
Since the beginning of the crisis, Switzerland has ramped up testing for the coronavirus to achieve one of the highest per capita rates of testing in the world. More than 6,000 tests are being carried out in Switzerland per day and cantons have been ramping up their testing capacity.
The government said it planned an extended testing strategy along with a contact tracing concept as it moved to ease social distancing measures.
However, it has decided not to impose a general obligation to wear protective face masks. Instead it recommends that people wear them when travelling by public transport at rush hour. Retail customers may also be asked to wear masks as a protective measure when visiting shops.
The armed forces are planning on buying up to 100 million masks, which will be sold to retailers at purchasing price. The government has a budget of up to CHF400 million ($412 million) to provide the different types of masks. But it is the responsibility of hospitals, companies and private households to ensure a stock.
Never miss a top story: subscribe to our weekly newsletter now.
The government has maintained that daily supplies of medicine and food are guaranteed. Authorities, however, have rationed some common painkiller and anti-fever drugs to prevent panic buying.
Financial relief measures
Officials from the State Secretariat for Economic Affairs (SECO) have said that wages for the month of March are guaranteed, although in some cases there might be delays.
In total the government has set aside around CHF62 billion to support the economy. On April 3, it announced it was doubling the amount of emergency loans available to struggling companies to CHF40 billion ($41 billion). It has since presented a plan to offer additional loans totaling up to CHF154 million for start-up companies.
The promised economic package provides relief for companies with liquidity problems to obtain transitional bank loans. Companies hit by the crisis will be able to defer payment of social insurance contributions temporarily and without interest. These measures also apply to self-employed persons whose turnover has fallen.
The government is also throwing a lifeline to businesses threatened by bankruptcy. Firms can delay declaring their financial difficulties to the courts, with smaller companies being given at least three months' grace to pay off their debts.
There is also money to fund the imposition of short-time work at firms while other tranches have been set aside for hardship loans and to support specific sectors such as event management.
Partial unemployment claims have increased sharply due to the pandemic and are expected to continue to rise. As of April 4, almost a quarter of the Swiss working population (1.3 million people) were on short-time work, according to SECO.
Finance minister Ueli Maurer warned that the shutdown of the Swiss economy could result in a deficit of up to CHF40 billion this year.
Various institutes and banks are predicting a recession in 2020, followed by a bounce back in 2021 – if the virus situation is resolved in the coming months.
A return to border controls and entry restrictions
Only Swiss citizens, Swiss residents, those entering the country for professional reasons (e.g., those who work here and have a permit to prove it), and those transiting through, can enter. Even foreign partners of Swiss citizens, who do not have a right of residence in the country, will be turned away.
The government announced on April 16 that fines will be imposed on those who travel to neighbouring countries for cross-border shopping.
What are the consequences for the healthcare system?
The pandemic has put pressure on the healthcare system. In Switzerland there are 82 intensive care units, which have a total of 950-1,000 beds; around 850 of the beds are equipped with respirators. The army has around 100 additional respirators and put in an order for 900 more.
However, the system is not saturated, Swiss president Simonetta Sommaruga confirmed on April 16. Several hospitals have been able to admit Covid-19 patients from neighbouring France.
Numerous hospitals and nursing homes are prohibiting visits.
The army is providing the cantons with additional ambulances and 800 army personnel are ready to provide assistance if necessary.
In addition, for the first time the Swiss army is deploying a hospital battalion to support other civilian hospitals; it can welcome 200 patients. To cope with the expected increase in the number of sick people, many cantons have also mobilised civil defence volunteers.
What's the risk of becoming infected with the new coronavirus in Switzerland?
The risk of contracting the new coronavirus in Switzerland is currently moderate, according to the Health Office.
However, the number of cases still puts Switzerland among the most affected countries in Europe; current figures from around the world can be found here. Advice regarding the usage of hankies and the practice of handshakes was published in all major newspapers following the outbreak. This has been updated to include "keep your distance".
In order to prevent and slow down the spread of the virus as much as possible, those known to be affected have been isolated.
Anyone who has been in close contact with a sick person, i.e. less than two metres away for more than 15 minutes, must also remain in quarantine for two weeks. Authorities also recommend a certain amount of "social distancing" – i.e, when standing in a queue, for example, to keep a certain distance from those around you.
Recommendations for the world of work have also been issued, such as not travelling at rush hour and working from home when possible.
Those worried about a possible infection are advised to phone the doctor's office first, rather than showing up in person. The cost of a test (CHF180) will be reimbursed by basic health insurance as of March 4, the health office announced.
What's the situation for Swiss citizens living abroad? Are repatriations being carried out?
All Swiss representations abroad remain accessible to Swiss citizens. The representations, and the helpline of the ministry, have answered hundreds of enquiries from concerned citizens.
Under the Swiss Abroad Act, Swiss nationals living abroad cannot claim the right to an organised departure from a crisis area.
The Swiss authorities have organized the biggest ever repatriation operation of Swiss nationals, which is now drawing to an end. Most Swiss stranded abroad have now managed to return to Switzerland, according to the foreign ministry. The ministry has organized more than 30 repatriation flights. Nearly 7,000 people, including some 4,000 Swiss nationals have been repatriated on flights organized by Switzerland.
The foreign ministry regularly updates information about the "unprecedented recall operation" here.
The Organisation of the Swiss Abroad cancelled the meeting of the Council of the Swiss Abroad in the Swiss capital Bern, which had been scheduled for March 14.
What do you need to consider when travelling to and staying in Switzerland?
The government advises against all non-urgent travel in Switzerland and abroad.
All ski resorts have been closed across Switzerland. Tourist trains have also been cancelled.
Swiss International Air Lines has reduced or cancelled many flights to and from areas with a particular risk of infections.
The airline announced that it is cutting back on much of its service and reducing working hours for flight personnel to help safeguard its finances during the pandemic. If the situation gets worse, the airline will have to ground all its aircraft and will then be dependent on government aid, Swiss CEO Thomas Klühr says. Check on the SWISS website for details.
What impact will the spread of the disease have on the Swiss economy?
Economics Minister Guy Parmelin has warned that averting a recession will be extremely difficult despite the measures taken. The government said it wanted to help the economy "quickly and unbureaucratically."
The Swiss stock market has been heavily hit by the panic over the virus.
The tourism and event industries also fear heavy losses. For March and April, Swiss hotels are expecting turnover to fall by up to 90%.
The federal government's economic forecasting Expert Group expects the Swiss economy to plunge into recession in 2020 as a result of coronavirus. It says the economy should gradually recover from the second half of the year onwards, provided the coronavirus situation stablises, but stresses that "forecasting uncertainty is currently extraordinarily high".
In the medium term, the State Secretariat for Economic Affairs is concerned about capital markets and the interruption of supply chains for Swiss industry and international corporations based in Switzerland.
Where can I find further information on the implications of Covid-19?
swissinfo.ch is keeping this story updated daily with numbers of confirmed cases and deaths, as well as any new significant measures taken by the cantonal and federal authorities. Further sources, which we also use and which may be useful to readers, include:
The Federal Office for Public Health (FOPH): live updates of the national situation, as well as recommendations, public safety measures, and details of upcoming announcements.
The World Health Organization (WHO): information on the origins and nature of Covid-19, as well as the global situation and travel advice.
The Swiss foreign ministry: information in French, German and Italian about the situation regarding foreign travel and the steps to be followed by Swiss citizens going abroad.
Johns Hopkins University: a global map that tracks the number of cases and fatalities by country; figures may be slightly different from swissinfo.ch's map, above, due to time lags and/or different methods of defining "confirmed" cases.
Follow SWI swissinfo.ch here, on Facebook and on Twitter for timely updates on the situation in Switzerland.
Here is an overview of the most important Swiss-related coronavirus data and graphs, which are updated automatically.
By SRF Data
Timeline in Switzerland
· February 25: Switzerland reports its first coronavirus case – a 70-year-old man tests positive in canton Ticino, in the south of the country bordering Italy. Ticino bans all public events, including the carnival parades.
· February 27: "Social distancing" is one of the precautions called for as part of an information campaign by the Federal Office of Public Health. The Engadin Ski Marathon – scheduled for March 8 – is cancelled. The Swiss sporting scene starts shutting down.
· February 28: The government raises the alert level to "special situation" – banning events with more than 1,000 people, including football and ice hockey championships, carnivals in Basel and Lucerne, the Geneva Motor Show and Baselworld watch fair.
· March 13: Ticino is the first canton to close all schools as part of its "emergency measures". The federal government launches an emergency aid package worth CHF10 billion ($10.3 billion) and bans public gatherings of more than 100 people.
· March 16: The Swiss government declares an "extraordinary situation", instituting a ban on all private and public events and closing restaurants, bars, leisure facilities and shops apart from grocery stores and pharmacies.
· March 19: Canton Uri orders people 65 and older to stay inside their homes. The federal government tells the canton it can't do that.
· March 20: The government announces a nationwide ban on gatherings of more than five people in public spaces. It urges the public to stay home except to buy food or go to the doctor. Some city parks are shut and police begin enforcing the ban on groups of 5+.
· March 25: The Swiss government extends entry restrictions to all Schengen states. Previously it had imposed restrictions on entry by land and by air from Italy, France, Germany, Austria and Spain, and from all non-Schengen states.
· March 27: Swiss cantons will be allowed to shut down industrial activities if they show a risk of spreading coronavirus. The government ruling, which comes with strict conditions, follows a decision by canton Ticino to ban certain manufacturing production.
· March 31: A scientific taskforce is set up to advise the government and to coordinate national research by universities into coronavirus.
· April 16 : The Swiss government announces a three-stage easing of Covid-19 restrictions from April 27.
Highly recommend this research piece by Crescat Capital on the valuation of Gold Miners vs. the S&P 500.
From the February top for large cap stocks, it would take a 56% selloff just to get to long term mean valuations, a 74% decline to get to one standard deviation below that... 1932 was an 89% drop from the peak. The initial decline in this market so far is comparable to 1929 in speed and magnitude. There will certainly be bounces, but even after an almost 30% fall in the S&P 500 through yesterday's close, we are not even close to the "blood in the street" valuations that should mark the bottom for stocks in the current global recession that has only just begun.
But value investors do not have to despair today. There is one area of the stock market that already offers historic low valuations and an incredible buying opportunity right now. Small cap gold and silver mining companies just retested the lows of a 9-year bear market. Last Friday, they were down 84% from their last bull market peak in December 2010! This was a double-bottom retest at a likely higher low compared to the January 2016 low when they were down 87%. Now that is what we call mass murder! …precious metals juniors reached record low valuations last Friday relative to gold which is still up 18% year-over-year. Mad value. Look at that beautiful divergence and base. The baby was thrown out with the bathwater in a mass margin call. Last time the ratio was in this vicinity, junior gold and silver miners rallied 200% in 8 months.
Are you looking for securities to buy to take advantage of the carnage in the financial markets from the coronavirus? Baron Rothschild, the 18th-century British banker advised that "The time to buy is when there's blood in the streets, even if it is your own." He made a fortune buying government bonds in the panic that followed the Battle of Waterloo against Napoleon. But it's not sovereign debt of the world's superpowers that is on sale today; it's not the S&P 500 or Dow either.
US government bonds already had their biggest year-over-year rally ever, and at record low yields, they are no bargain. As for US stocks, it's only the first month after what we believe was a historic market top. The problem is that the pandemic just so happened to strike at the time of the most over-valued US stock market ever based on a composite of eight valuation indicators tracked by Crescat, even higher than 1929 and 2000. It also hit after a record long bull market and economic expansion. The stock market was already ripe for a major downturn based on an onslaught of deteriorating macro and fundamental data even before the global health emergency.
As we show in the chart above, we believe there is much more downside still ahead for US stocks as a major global recession from nosebleed debt-to-GDP levels has only just begun.
