Europe is suffering from a fresh wave of coronavirus infections. Is the sacred summer vacation to blame?

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If this summer was supposed to offer hope that coronavirus was under control in Europe, spikes in cases across the continent and ensuing travel chaos have given governments a worrying reality check.

From France down to Ukraine, the number of positive tests for COVID-19 is rising sharply as more people seek vacations and after lockdown measures were eased to allow citizens to congregate. Germany reported the most new cases since May, while France said the situation is worsening, particularly in the cities of Paris and Marseille.

The British government added France and the Netherlands to a list of countries from where people must quarantine for 14 days on arrival in the U.K. Travel stocks slumped. In Eastern Europe, which had been hit less hard by the pandemic, some countries approached near record number of daily cases.

French Health Agency chief Jerome Salomon said large family reunions, such as weddings, and work places are prevalent places of infection. “One can only be worried as hundreds of new people are hospitalized,” Salomon told France Inter. He urged people to socially distance to avoid the crisis of March and April that “no one wants to go through again.”

It was always going to be a gamble as countries sought to open up their economies in an attempt to mitigate the unfolding financial collapse. Closing businesses and ordering people to stay at home again is something political leaders remain reluctant to do given the dark economic forecast and millions of jobs at risk, particularly in tourism.

Spanish Warning

As infections continued to rise in Spain, the main business lobby on Thursday warned that any second lockdown would have catastrophic consequences and urged the government to promote the use of a new app developed by the Economy Ministry to trace cases of Covid-19. New cases in Spain jumped to the highest since at least May 25, when the government changed its methodology for reporting data.

In the U.K., Prime Minister Boris Johnson has been removing lockdown measures, though he has been concerned not to trigger a second wave of cases from arrivals from abroad. His government already faces an inquiry into its handling of the crisis after Britain recorded Europe’s highest death toll.

Hundreds of thousands of British tourists now fa

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What’s driving the new gold rush?

The new gold rush is on. Suddenly, the precious metal has regained its long-lost glitter, jumping to over $2,000 an ounce during the first full week of August, its highest inflation-adjusted level in a decade. That new peak roughly matched its all-time record in 1980 when the Hunt brothers of Texas notoriously cornered the silver market and gold joined the ride. Then gold collapsed from what everyone in retrospect recognizes as delirious heights. Now, the goldbugs are claiming that it’s the safest port in these stormy seas, while history warns that a rerun of 1980 could be looming. Who’s right?

Over the past few days, the shiny metal has retreated a bit, closing 5% off its summit at $1,946 on Aug. 12. Still, the 24% liftoff this year easily bests stocks and bonds, beating the S&P 500’s modest bump 5 to 1.

On the surface, the story that gold’s fans are advancing to justify its comeback seems to make sense. Banking on this classic store of value, they argue, provides the best insurance against the threat of rampant inflation raised by the U.S. government’s unprecedented fiscal stimulus and the Fed’s money-creation binge. Ruchir Sharma, chief global strategist for Morgan Stanley, recently expressed the widespread view that gold’s resurgence has legs, because stocking bullion furnishes a safe haven in these dangerous times. On Aug. 8, as its price hovered over $2,000, Sharma wrote in a New York Times editorial that “Gold appears relatively cheap,” adding that “unless a vaccine emerges quickly, central banks stop printing money frantically, and real interest rates start rising again, it’s difficult not to be a goldbug right now.”

If gold’s advocates are right, the metal should have a long history of first, predicting when inflation is about to take off, and second, providing protection when it happens, in periods when consumer and producer prices are rapidly rising. Over many decades and cycles, gold has failed on both counts. In fact, fear of looming inflation probably isn’t the main motive behind today’s mania. The puny yields on 10- and 30-year Treasuries are forecasting the opposite scenario of prices rising at an unusually slow pace in the years ahead. Even if Treasuries way underestimate the risks of heavy inflation, and that’s highly possible, gold has reached such excessive highs that it’s unlikely to keep rising substantially from here, which is what’s needed to keep you even with a galloping consumer price index (CPI). Catc

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China is expanding its digital currency pilot to 2 new cities

China has outlined plans for further tests of its digital currency initiative, now aiming for trials in areas including Beijing and Hong Kong.

A digital renminbi trial will start in some of the country’s most developed regions, the Commerce Ministry said in an announcement on Friday that didn’t provide a timeline. Tests will take place in the area of northern China encompassing Beijing, coastal city Tianjin and Hebei Province; the city cluster in the Yangtze River Delta region including Shanghai; and the Greater Bay Area in the Pearl River Delta Region including Shenzhen, Hong Kong and Macau.

Cities in central and western China may also undertake the trials if they meet certain conditions, the ministry said, without specifying what they were.

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The exercise will kick off in Shenzhen, Chengdu, Suzhou, Xiong’an and sites for the 2022 Winter Olympics and will then expand to other regions, the announcement said.

The digital currency trials are part of a broader package of initiatives Beijing rolled out on Friday to stimulate innovation and encourage further opening of its service sector. The same day, the country reported steady industrial growth in July, though retail sales continued to show weakness.

China has been ramping up plans and testing for the People’s Bank of China digital currency in recent months, an initiative that some see as a threat to cryptocurrencies like Bitcoin and even potentially someday to the U.S. dollar’s dominance.

In April, Bloomberg News reported that state-owned Chinese banks were conducting internal, hypothetical-use tests of the currency. Last month, Softbank Group Corp.-backed ride-hailing company Didi Chuxing said it was working with the PBOC on tests of the currency and Bloomberg reported that Tencent Holdings Ltd.-backed food delivery giant Meituan Dianping was planning tests on its platforms as well.

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