COVID-19 and the ‘Perfect Storm’ for Precious Metals | PCMA Webinar

COVID-19: Perfect Storm for Precious Metals| Nick Barisheff

Major economies in Europe, Canada and the United States have been shutdown. No one could have ever predicted that a virus could ignite an entire economic system already under stress. While the virus itself is life threatening resulting in large demographic changes across the globe, the economic implications may be far worse than the disease itself.

Nick Barisheff, President & CEO, BMG Group Inc. and David Morgan, The Morgan Report sat down with Brian Koscak, Georgina Blanas and Jackie Syrett of the Private Capital Markets Association of Canada (PCMA) to discuss COVID-19 and its effect on the economy and precious metals.

  • Every industry—airlines, hotels, manufacturing, entertainment, sports, schools and retail—is in lockdown.
  • Most of the western world is ravaged by fear, isolation, loss of employment, loss of income and the psychological effect of this massive lockdown situation.
  • Employees have either been terminated or laid off indefinitely.
  • The scale of this unemployment crunch and financial crisis is beyond the reach of governments’ assistance.
  • Many businesses will not be able to reopen once the health issues have been controlled.
  • When the health crisis subsides, the economic effects will last for years; we may, in fact, never recover.

While there is a great deal of uncertainty because of COVID-19, there are several things that we know for sure:

  • Many industry sectors have no revenue
  • Governments will print enormous amounts of money in an attempt to mitigate the financial crisis.
  • Most companies with no earnings will see enormous declines in share prices.
  • Bonds, particularly corporate bonds, will default and become worthless.
  • Even real estate is likely to suffer dramatic declines as both commercial and residential tenants are likely to default on rent payments.
  • This in turn will result in mortgage defaults at every level, and properties will be sold at fire sale prices.

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