There is no doubt in my mind that life will never be the same for this generation living through the Coronavirus / Covid-19 Pandemic. Life will go on, but the memory and fear of recurrences will remain for a long time to come. Many lives have been lost and irreversible emotional stress has been seared into our unconscious souls. Unfortunately, I believe society is not prepared for what is to come once the Coronavirus pandemic subsides and the financial pandemic of 2020 takes its place.
I suspect the Federal Government has done all that it can to prop up the economy during the pandemic crisis by using the Federal Reserve’s Quantitative Easing (QE) measure and issuance of stimulus checks to the population. In addition to these aggressive measures, the Federal Reserve is promising to purchase corporate debt and has removed all limitation on the amount of United States currency to be created. With unemployment steadily rising past 6,000,000 people and the workforce unable to return to work makes the future appear to be quite bleak.
The decisions made by President Donald Trump and Congress were designed to keep the economy afloat while the financial pandemic of 2020 passes. The damage to the economy will still exist with record unemployment not seen since the Great Depression. The Stimulus Bill was said to be $2 Trillion, but I believe the cost will be way more in the long run. I don’t fault them for these decisions because the other choice would definitely cast the nation and world into a second Great Depression.
The Federal Reserve Quantitative Easing will surely cause inflation, which will hurt the economy due to the dollars loss of value. The Federal Reserve is currently offering 0.00% to 0.25% interest rates with nowhere left to go other than negative rates. Negative Rates will be free money for whomever has the credit and or collateral to borrow against the Federal Reserve. And with all this doom gloom, I haven’t even gotten into the potential mortgage industry collapse due to the 0% interest rates offered by the Federal Reserve. Only time will tell if this will come into fruition.
This may keep banks and big businesses a float, but there is a price to pay. The silent killer is inflation. I believe that inflation will skyrocket once the pandemic is over and millions will be left unemployed with unimaginable inflation concerns. Not only will they be left with no money coming from stable employment, but the money they did manage to save will lose its value right before their eyes.
While the future does appear to be dim, the pandemic of 2020 will pass and the sun will shine once again. The sun will shine for those that made the correct financial decisions in the past and in the present. Unfortunately, majority of society are still going about their lives without the realization of the dire situation that our financial system is plagued with.
If you were living check to check or were overly reliant on credit to survive in the pre Coronavirus economy, you may want to reevaluate your current financial situation. Having a respectable savings account is key when approaching a traditional recession much less depression of epic proportions. Investments in alternative forms of currencies like gold, silver, Bitcoin, and other cryptocurrencies will be essential to hedge against the future down turn of the U.S. dollar. Owning stocks may also be helpful, but expect to sell them for a loss if you are not able to wait until an uptrend.
No one can predict the future, so no one knows when the Coronavirus pandemic will end and the financial pandemic of 2020 will begin. But one thing is for sure, it’s coming with vengeance for those poor unsuspecting souls.