Trends Journal publisher Gerald Celente said during an interview this week traders should stop paying attention to the Chicken Little fear mongers who say the sky is going to fall on Wall Street due to the coronavirus outbreak in China.
“Fear is an easy thing to sell. Whether it’s war or weather or in this. But the numbers aren’t showing it.”
While not dismissing the people who have lost their lives, Celente contends that it has only been a small number of people in comparison to the population as a whole who have died, and far more people succumb to the flu each year in the U.S.
As of this morning, about 420 people have died so far amid 20,438 confirmed cases in China, according to the latest report by The New York Times.
“It’s not really a big number,” Celente said, referring to the death toll compared to China’s massive population of 1.4 billion people. “When SARS hit back in 2003 and 2004, a grand total of about 800 people died in a population of about 6.5 billion people (worldwide). So this kind of reminds me of, ‘The hurricane is coming, the hurricane is coming,’ and all of the media are out there with their rain gear on and the wind blowing and the water splashing onto the beach. I think they’re making a bigger deal out of this than it is.”
To which host and Kitco News Editor in Chief Daniela Cambone gave a surprised, “Really?”
“In the United States last year, 61,000 people died of flu viruses,” Celente explained. “I don’t know how far it’s going to go but when you look at the past, these aren’t big numbers. And it’s really done a lot of damage, particularly to the oil sector.
“And it’s done a big number in China. It happened during the start of the lunar new year — time to party, celebrate and travel, and places are quarantined, streets are empty and the Chinese economy is already soft. So this is really going to hit them pretty hard for a while.”
Cambone then said she was at least a bit worried about the outbreak, adding “it’s definitely inserted an element of fear here.”
Celente admitted the outbreak could be a “black swan event that brings down an already weak global economy,” but the number of deaths as a percentage of population shouldn’t be cause for concern yet.
“Fear is an easy thing to sell,” Celente replied. “Whether it’s war, or weather or in this. But the numbers aren’t showing it.”
As an aside in another part of the interview, which you can see in full by clicking here, Celente predicts the Federal Reserve will lower interest rates to negative or zero by November (which also happens to be when the 2020 presidential election is).
“What’s going to give the Fed motivation to lower rates is just look what happened to the GDP numbers that came out,” Celente said. “The economy didn’t grow at 3%, it grew at 2.3%, and it’s going to grow slower next year. This (coronavirus) will make it worse, yes, and the other thing about (Fed Chair Jerome) Powell and his statements, there is no hint that they’re going to raise interest rates.
“I’m forecasting that by November, you’re going to see interest rates down to near negative or zero interest rates, and that’s going to be very bullish for gold.”
Editor’s note: Do you agree with Celente or are you a bit more nervous in regard for the potential the coronavirus has to cause a downturn in the markets?