Remember 2 months ago when friends, family, and other acquaintances came to you asking for your opinion and even advice? Things looked very dour indeed and people for the most part were in full blown panic mode. They were going to lose their job, they were losing their money and if they left the safety of their home…they were going to DIE!
For a brief moment, you were no longer an idiot. Still strange maybe, but because it looked as if everything was spinning out of control, it was you they sought advice from. It was you because maybe you were the only one warning them prior, or maybe THE only one they knew who had counseled caution? You might have even heard from people you hadn’t seen or heard from in years? You might have even had relatives that needed help financially and you helped them? Very briefly, you were no longer an idiot!
Alternatively, some may have thought you even a bigger idiot than before? Some, maybe even many, only feared the virus and believed we would be back to “normal” in short order? This group believed you were dead wrong about the economy, the markets etc. Not only were you dead wrong but plain foolish because you prepped for something that would never come? (Even if it was not you who had to stand in line to purchase four rolls of toilet paper). In any case, you are still an idiot…again!
The average person has been duped again for the umpteenth time. Yes we have had 39 million new claims for unemployment. Yes there have been (and will be) many old line corporations file bankruptcy, and yes a huge percentage of debt versus all sorts of real estate go into arrears but not to worry! Not to worry because the government has (and will) save us all. Not to worry because whatever is needed to spend will be spent and all will be good. Just look to the stock market as proof! While those 39 million new unemployment claims were being filed, the stock market climbed over 30%. The unicorn juice of the stock market not falling any further has served to calm the public nerve!
But now for the reality. The reality is this, the next few months will likely become a financial and economic nightmare. Just as an atomic bomb exploding 10 miles away, you see the flash, you then hear the bang but nothing happens immediately. “Immediately” is where we stand today. The concussion and destruction is delayed but when is does arrive it demolishes everything.
Plain and simple, the world was already seriously rolling over in the fourth quarter last year. You could plainly see this in may series, “trade” being the most obvious because it is the most difficult to fudge. The fateful day of Sept. 16 when repo broke should go down in infamy as the day the levee broke. The Fed was forced to pump $ billions day after day to keep that canary from being noticed. I will only say the virus was “convenient” because it has been cover for central banks to flood the grossly indebted, financially illiquid and insolvent system with new credit and liquidity. How fortuitous!
Folks, we are already in a global depression as measured by unemployment. $ trillions in debt have gone unserviced for 2 months now and will never be paid on again. $ trillions have already been created and spent by broke central banks and sovereign treasuries. It has ONLY been this largesse that has prevented postponed financial carnage. “Normal” as we thought it to be back in January will never return because frankly, our past way of life was anything but normal! Is it really sensical to spend more each and every year than you take in and fund the gap by borrowing the difference? Can that be sustained? We are just about to see the answer to this, and the resounding NO will be in your face with clarity!
Individuals, small businesses, large corporations, cities state and local governments, pension plans galore and even central banks and sovereign treasuries have been bankrupted. The “bankruptcies” are working their way up and down the line and spreading like wildfire because every failure either adds pressure to or creates another (more) bankruptcies. We have lived a financial life where everybody owes everybody and “liability” exists everywhere and in everything known as an asset. In many cases, what was believed to be an asset has very quickly turned into a liability. All that is now necessary for you to never be thought of as an idiot again is the realization that once believed assets, turned liabilities, BECOME UNWANTED LIABILITIES! ie. To whom do you sell?
I believe this scenario will happen soon and happen with a vengeance. I have long said “confidence” would break for any number of reasons. And that is exactly what have now, ANY NUMBER of reasons for the average person to wake up to the fact the financial markets are completely fraudulent and bluntly, FUBAR’d! Vast wealth will be destroyed on a nightly basis from asset class to asset class and culminate in systemwide failures. The financial atomic bomb has already detonated, there is no going back nor “unseeing” it.
But don’t fret, you won’t be an idiot for much longer. If you have done your best to prepare, that is all you could do and all that can be asked of you. At least you will no longer be an idiot! People will genuinely ask your advice on many topics, not just financial…because you are no longer an idiot. There is even more upside, relatives you haven’t been in touch with for years will show up on your front doorstep asking for advice, not to mention food, shelter, and a shoulder to cry on…because you are no longer an idiot!
The above said, do not expect anyone to admit they were wrong. Nor should you expect any apologies for thinking (and treating) you like you were an idiot. Also remember this, once you let someone in your door out of the goodness of your heart…don’t expect them ever to leave (you would of course be an idiot if you believed this). Oh yeah, one last pretty obvious question…GOT GOLD? The only financial life preserver in a world flooded with debt…