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So you don’t think commodity prices and real estate prices are going to correct downwards? I paid $1.96 for gasoline the other day. It’s hard to imagine the property prices in the high COL regions staying where they are. You won’t have the cash buyers using company stock or their investment portfolio. At the lower end, there will be some repeats of the Great Recession busts. You’ll be able to buy that foreclosure in Florida for $100k again.
The central banks will never allow a real correction to occur. Even in 2008, the housing bubble was never allowed to come close to fully deflating.
There will certainly be a massive deflation. But not in terms dollars. The deflation will be in terms of real money- gold and silver. I'm not so sure the dollar makes it out of this decade alive... The amount of QE the central banks will need to perform will be magnitudes greater than anything they've ever done. When everyone sees how easily trillions of dollars can be created out of nothing, there will be a massive loss of faith in cash itself.
Last edited by Taggerung; 03-13-2020 at 08:52 AM..
The central banks will never allow a real correction to occur. Even in 2008, the housing bubble was never allowed to come close to fully deflating.
There will certainly be a massive deflation. But not in terms dollars. The deflation will be in terms of real money- gold and silver. I'm not so sure the dollar makes it out of this decade alive... The amount of QE the central banks will need to perform will be magnitudes greater than anything they've ever done. When everyone sees how easily trillions of dollars can be created out of nothing, there will be a massive loss of faith in cash itself.
IMO if the virus crisis really hits the national sht fan, so many millions will appreciate that we had the power of our fiat all along for just such emergencies.
What's different about the economy today is that, while businesses are affected and some shutting down. There's already a digital economy that exist without much affect. I understand that a lot of businesses and jobs will be affected but those who work in the digital economy are not grinding to a halt. My job security is even better than before.
There's also the buying frenzy that people are doing, probably spending millions this month alone on stocking up goods. No reason to take down Costco or Walmart stock when they are doing incredible well.
Those of you who think this is over must not have read the CDC's projections that came out today.
I'll summarize it:
The U.S. has 925k staffed hospital beds. The number who could require hospitalization from COVID-19 ranges from 2.4 to 21 million people.
Those are scenarios before interventions like social distancing are taken into account. If we handle things right, we may just stress the health care system, not overwhelm it. "Handling things right" means that a good portion of our economic activity grinds to a halt, out of necessity.
I'm amazed at people who don't think this is a big deal. Schools don't freaking close their doors and billionaires don't stop running their professional sports teams if any of this was a freaking joke.
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