Well it looks like the Baby Boomers are in trouble. First of all there stock portfolios are getting wiped out. Second is this new virus kills the elderly in high numbers. So will the coronovirus to drive gold price higher. According to Credit Suisse it sure seems likely. Is this the time to get out of stocks and bonds and seek save havens. One should never panic in times of chaos but people do and there lies the danger.
Millions of Boomers are invested in the stock market seeking higher yields to boost their income. A very high percentage of these boomers are just every day people. They don’t know how to place puts and calls in the stock market. Most just go to their bank and put money in index funds. What happens when these funds collapse over the next few months. Panic will happen and these millions of boomers will start to bail from the stock market. Make no doubt fear will drive them.
World out of Ammo
So how is the world going to combat this coming economic storm. Lowering interest rates when they are already near zero won’t do much good. Sure real estate might go up but boomers want to sell so they will start selling their real estate. This is going to flood the market with homes that no one can afford especially when people start losing their jobs. Who will be hiring when businesses start to collapse? Police department maybe as chaos ensues.
There is no way that lowering interest rates will spur this economy when people start collapsing on the streets. People will be in complete panic and panic will not lead to gathering at real estate sales. More likely they will be buying toilet paper and food and locking their doors. Better to invest in hand cleansing companies than costly real estate. If anything real estate could tumble along with everything else. There are ways to stay safe in such precarious times and one of them is to preserve your money. Gold is a great way to do this. Zoomers should be buying some gold and silver.
Deflation or Inflation
Now with interest rates close to 0 and nowhere to go but up after the chaos is done what should you expect. There is a supply shock coming down the worlds highway of goods. One little screw that is made in China to complete a car in Japan is a good example of this. That car will not be able to be completed due to that screw. Now this scenario applies to millions of various items around the world. Believe me when I tell you a supply shock or shortage of goods is coming. When you have fewer goods you have higher prices due to demand. This is inflation.
Ok, that’s inflation. What happens when no one is buying anything? Fear and worry about job losses of paying debt about just buying food and putting a roof over your head. All these things are about to come to the forefront as the coronvirus spreads and causes more turmoil in the worlds economies. Know this that there is no known cure for this virus and one won’t be coming soon. So this means if you do have less stuff in your store and people have less money to spend it would balance itself. This will not be the case because the worlds banks are about to flood the world with cash. Fake cash of course but still cash. Lets look at what this will do to those few goods still available.
Helicopter money is about to reign down on failing business and people hunkering down at home in quarantine. You check your mailbox and there is a big chunk of cash from the government. Fiscal stimulus has arrived to save the day. You rush down to the store with your mask on and your bottle of disinfection to buy some beans. Your beans that used to be in great supply in the bean section have been all bought up. There is five cans left so you grab them and head to the counter. Fiver dollars a can for beans! Yes this could be the outcome across the board for thousands of goods.
CoronoVirus Spreading Fast
As I sit here writing this article I am watching the news up here in Canada. New outbreaks in Alberta, new outbreaks in care homes. new outbreaks on cruise ships. This virus is real and it has got it’s foothold in the west. Washington state and California are now declared an emergency. This virus is now here in BC and is spreading fast. Lock down, stock up and prepare for the worst. Wash your hands with soap and water frequently and stock up on some food in case you have to stay indoors. Do not go to the hospital because that is where you will become infected first.
CoronoVirus is here and it has just begun to wreak havoc. We are about to face a catastrophe of unknown proportions. There just could be people dropping dead in the streets. Hospitals are about to be over run with sick people. Spreading the virus will happen quickly because most people will have it and not even know it. This is what makes this virus most dangerous. Real Estate will crash, jobs will become hard to come by as businesses shut down. Food and supplies will sky rocket in price. You need to protect yourselves and your money as stock markets crash around the globe.
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