Your question makes me sick. My paltry 401k that was supposed to be something to augment my SS as the years go on has dropped forty thousand in a month and at my age, will probably not have enough time to gain back. I worry about my wife worrying about this.
The horror of it for us, my wife and I, is the fact that I was employed by MCI/WorldCom when Bernie Ebbers committed securities fraud and forced the company into Chapter 11 Bankruptcy restructuring where every penny in MCI/WorldCom stock was made worthless. What little I had built up again since Verizon bought our restructured remains is now tanking. Now we are fast reaching down to the level of losses under President Obama.
Now we have Leftist Democrat fraud.
So, he is not wrong and there will only be mea culpas from all of the fear mongering alarmists who caused this panicked run on the market with eyes wide open. The Democrat Socialist future Commissars will not be sorry in the least.
Friend, I have some bad news.
Well - first the hope: pray the chloroquine + azithromycin works as advertised. We’ll know in one week. It it does, it may be the silver bullet to avoid what I’m about to write.
The economic hits may not be done. Not by a long shot. If the drug combo doesn’t work, we may be looking at a global economic reset of the likes never seen before. This has nothing to do with fearmongering - it has everything to do with mechanics that have been in motion for YEARS.
Let me try to sum up:
There is a global sovereign debt crisis. It is particularly bad in the eurozone and not so hot in the U.S. either. Congress is about to pass a multi-trillion dollar bailout package. That is going to need to be funded. It will NOT be funded through growth. Instead, the U.S. will attempt a debt sale.
Here’s the rub: a ton of countries are going to try the same thing. With trillions in wealth obliterated, and multiple countries with existing sovereign debt issues attempting a sale at the same time, what is going to be the appetite for buyers? What happens if we have a debt sale and don’t get enough interest to fund this new legislation?
The fed will bail us out by buying the debt. But as you may know, that means it will basically be a fiat buy. What will that do to the value of existing treasuries is such a large fiat buy is made? People will start dumping treasuries. The dollar will take a hit, too, and China will start unloading it’s stockpile.
This will happen in countries across the globe. International debt markets will fumble and hard assets will be king. Do you think a country like China will take deflated fiat bills for their existing debt? I anticipate that they’ll choose to freeze and repatriate American assets on Chinese soil instead. They may be so emboldened that they will invade Taiwan, and aggressively expand into the South China Sea. They’ll do this, of course, on the pretense of “protecting themselves against the risk of reinfection from the American virus.”
We, of course, will freeze Chinese assets here in response. That could quickly escalate into a hot war where China decides Alaska is just compensation for their debt, but that would be an extreme case.
Either way, expect global economies to start crumbling it the drug duo fails. Italy was already on the precipice. Much of the eurozone will go with them. (Britain couldn’t have gotten out at a more opportune time.)
I’ve long argued that the sovereign debt crisis was going to eventually lead to WWIII. Due to the coronavirus, though, it may be a more “low key” conflict that results in just a global reset.
The good news is that the U.S. has many positives going for it in a global reset scenario:
1) More than enough food
2) More than enough energy
3) A solid foundation of infrastructure to rebuild our industrial strength upon - roads, electrical grid, airports, etc
4) An armed citizenry making ground invasion a bad, bad idea (think fighting insurgents in Afghanistan is rough, try millions of well-trained military vets)
5) A free and capitalist system that promotes growth
6) Some of the lowest population density in the free world - land to build on
...and so forth and so on.
But things could still get a lot worse.
Your financial losses not due to the virus, but the “cure”.