Gold and Energy Advisor: Gold, Oil & Energy Markets Investment Research
James DiGeorgia, Mr. Macro
- Chief Editor -
Mr. Macro
Geoff Garbacz, Mr. Micro
- Chief Strategist -
Mr. Micro
Dan Hassey, Mr. Retirement
- Senior Stock Analyst -
Mr. Retirement

Real Wealth

Real Wealth #045  05/24/2006

Human to Human Cases of Bird Flue Reported

Dear Subscribers,

This past year both private and public health organizations across the globe have warned of the growing danger of a Bird Flu pandemic.  

Till today no cases of human to human Bird Flu airborne transmission had been reported. All the cases had been people infected by handling or working with infected fowl. So even though the Bird Flu got its movie of the week, it really wasn't an imminent threat.

The danger may now imminent. According to Bloomberg which is reporting that there may be a cluster of gravely ill and deceased Bird Flu victims in Indonesia who apparently were not infected by handling fowl....

Seven Indonesian Bird Flu Cases Linked to Patients (Update1)

May 23 (Bloomberg) -- All seven people infected with bird flu in a cluster of Indonesian cases can be linked to other patients, according to disease trackers investigating possible human-to-human transmission of the H5N1 virus.

The Bloomberg story is confirmed by a story by Associated Press

Officials 'Stumped' by Indonesian Bird Flu
 JAKARTA, IndonesiaThe U.N. health agency described the deaths of six Indonesian family members from bird flu as the most important development in the spread of the virus since 2003, saying it is investigating whether the disease has spread from person to person.

If the report winds up being and isolated unverifiable occurrence Wall Street may not get spooked seriously but should additional human to human fatalities be reported on different continents the reaction on Wall Street won't be too dissimilar to what occurred after 9/11 -- lots and lots of panicky selling!

Three things I expect to see -- in the worst case scenario

*        The S&P falling 100 to 200 points very quickly.

*        Gold jumping over $850 an ounce

*        The Federal Reserve jumping in to provide liquidity and cutting interest rates citing a Bird Flu crisis to prevent a Wall Street dive to becoming an economic knock out punch.

How serious would a bird flu pandemic be?

A Bird Flu pandemic could kill millions so its a significant threat. That's why even a serious threat of a Bird Flu pandemic could shut down the world's commercial aviation, shipping industry and ports of entry.

Make no mistake about this - a shut down like that would have a tremendous impact on the world economy. While the impact on gold and the U.S. and world stock markets is pretty clear to me. The impact on the energy markets is less clear. Gasoline and for that matter oil consumption could drop as people stay home hiding from the Bird Flu but also please keep in mind our International supplies of oil would be cut off as most is shipped into the United States.

I'm watching this closely and will make some recommendations if warranted.  Fingers crossed hoping for the best.


James DiGeorgia, Editor

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