There’s Only One Place to Hide to Weather This Storm

Written by Jason Simpkins
Posted March 13, 2020

I’ll be honest.

I didn’t take the coronavirus seriously at first.

I’m not a reactionary person and I’ve seen similar panics spring up around Ebola and SARS.

Even now, the fact that I’m in my 30s means that even if I contract the disease, I’ll have a 99.8% chance of survival.

I’m no stranger to market crashes, either.

I first started in this business in 2007. I barely had a year before the greatest financial crisis of a generation reduced our economy to rubble.

But the truth is, the president and the federal government have badly bungled the response to this emergency.

To begin with, President Trump liquidated the U.S. Pandemic Response Team in 2018.

That same year, the Centers for Disease Control and Prevention (CDC) was forced to slash its efforts to prevent global disease outbreak by 80% — downsizing its epidemic prevention activities in 39 out of 49 countries — as its funding ran dry.

The Complex Crises Fund — a $30 million emergency response pool that allowed the Secretary of State to deploy disease experts in the event of a crisis — was also cut.

In fact, Trump ultimately eliminated $15 billion from global disease-fighting funds from the CDC, the National Security Council, the Department of Homeland Security, and the Department of Health and Human Services.

As a result, only three of America’s 100 public-health labs have been able to test for coronavirus.

He single-handedly eviscerated America’s disease prevention capabilities.

And then, when the coronavirus emerged and began to spread...

Trump insisted it was no big deal, and that it’d quickly pass with limited impact.

“When you have 15 people, and 15 within a couple of days is going to be down to close to zero, that’s a pretty good job we’ve done,” Trump said on February 26.

Not even a month later, the United States now has more than 1,000 confirmed cases.

And despite the rapid spread, Trump still refuses to declare a state of emergency that would free up badly needed funds and resources.

Declaring a national emergency — something Trump did without hesitation to divert money from the military to his border wall — would bring FEMA in to aid with transportation, shelters, mobile hospitals, and public safety. It would also allow money to be used from FEMA's disaster relief fund, which has a balance of more than $40 billion.

But still, Trump refuses to do that. Instead, he’s broadened his travel ban to Europeans, as if the coronavirus isn’t already here. He also promised a batch of small business loans, but I fail to see how that will stem the rising tide of infection.

Furthermore, the president’s comments were confusing and contradictory.

Trump forgot to mention U.S. citizens wouldn’t be affected by the travel ban, but he did say it would affect a “tremendous amount” of trade and cargo from Europe. The White House then denied the latter.

In any case, Trump didn’t consult our European allies at all, and his administration has conducted no analysis of the potential impact of the travel ban.

So, rather than comfort the markets, Trump’s Wednesday night address merely stirred more panic, and markets plunged again yesterday.

This is why I’ve suddenly lost confidence that this will be a minor blip. It’s because we have clearly squandered our chance at containment.

It’s clear now that this is going to drag out for months, if not the rest of the year.

Nevertheless, I remain confident that the market’s panicked response has been overblown.

I’m still of the opinion that the economy will persevere and stocks will ultimately rebound.

I’m continuing to look at this as a buying opportunity.

The problem is, I don’t know when we’re going to find the bottom.

No one does.

It’s a waiting game.

And the only thing investors can safely do in the meantime is buy gold.

Gold thrives on uncertainty of the type we’re seeing.

So, that’s where your focus should be right now. And as luck would have it Nick Hodge has a brand-new gold play that’s set to deliver huge returns.

I encourage you to check that out while you’re hunkered down with 100 rolls of toilet paper and a gallon of Purell.

Fight on,

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Jason Simpkins

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Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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