Sunday, March 29, 2020

Beyond the $6 Trillion Bailout, There Are More Federal Bailouts Coming

To date, since the start of the COVID-19 panic, $6 trillion in bailouts have been announced

There has been a $2 trillion dollar package announced by the Federal government to businesses and individuals. And the Federal Reserve is in the process of launching a bailout of its own up to $4 trillion.

There is likely a phase 2 package to businesses and individuals, and on top of that a bailout of state governments. In a little-noticed response at a press conference, the president hinted at the bailout of state governments that is coming:
He is not joking when he says, “It’s our money. It’s our currency.”

The dollar is the US government currency and it is going to be printed at a very rapid rate.

I continue to advise in the EPJ Daily Alert that price inflation is going to be very strong on the other side of the lockdown.

Note: This does not mean the Consumer Price Index will be strong at first. There are some areas of the economy that may discount to get consumers back, such as hotel and airline sectors. This may drag the CPI down for a bit, but the areas where you are going to be spending your money is going to see the strong bidding up of prices.

In other words, the things you want to spend your money on are going to be going up in price, the things you don't want to spend your money on will not be going up in price (at first).

One further caveat, not all of the multi-trillions in bailout activity will become newly printed money some will just be paper shuffling. But the numbers that I calculate and publish in the EPJ Daily Alert are starting to indicate that the part that becomes new money is going to be a staggering amount.


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