Do you think the coronavirus may cause any of these economic disasters in America?

[Light]

Greater Depression
Deflation then hyperinflation
Hyperinflation without deflation
Petrodollar dies sooner than expected
Rapid dollar devaluation like losing more than half its buying power

[Shemp]

Big effect I foresee is that because this won't be last pandemic requiring quarantine, there will be need to prepare for repeats every few years. As other people come to think the same way, people may move awat from big cities to smaller towns, which can be easily quarantined. Such a move has long been enabled by telecommunications and strongly incentived by lower housing costs, but government policy interfered. In particular, government rules requiring, favoring or subsidizing in-person activities, such as in-person attendance at university, in-person medical exams, etc. Now government pressure may switch to the opposite direction. Expensive coastal real estate (NYC, LA, San Francisco, etc) will be hit hard of this prediction is true.

[MrMan]

Big effect I foresee is that because this won't be last pandemic requiring quarantine, there will be need to prepare for repeats every few years. As other people come to think the same way, people may move awat from big cities to smaller towns, which can be easily quarantined. Such a move has long been enabled by telecommunications and strongly incentived by lower housing costs, but government policy interfered. In particular, government rules requiring, favoring or subsidizing in-person activities, such as in-person attendance at university, in-person medical exams, etc. Now government pressure may switch to the opposite direction. Expensive coastal real estate (NYC, LA, San Francisco, etc) will be hit hard of this prediction is true.

Insightful. The price of rural land would go up, too. My wife and I were talking about getting a farm somewhere. We probably aren't the only ones.

This reminds me of the 'perfect storm' prophecies which says that there will be a pandemic, the price of rural land will go up, the bubble around the solar system will weaken allowing harmful radiation in, among other things, and the magnetic north pole would move around. They discovered the bubble around the solar system after that.

[hypermak]

Big effect I foresee is that because this won't be last pandemic requiring quarantine, there will be need to prepare for repeats every few years. As other people come to think the same way, people may move awat from big cities to smaller towns, which can be easily quarantined. Such a move has long been enabled by telecommunications and strongly incentived by lower housing costs, but government policy interfered. In particular, government rules requiring, favoring or subsidizing in-person activities, such as in-person attendance at university, in-person medical exams, etc. Now government pressure may switch to the opposite direction. Expensive coastal real estate (NYC, LA, San Francisco, etc) will be hit hard of this prediction is true.

You need to admit that the never-ending "war on terrorism" was getting a bit tired. They could have summoned up an alien invasion but the budget for the special effects would have probably been too high, not to mention the risk people would rather be colonised by a race of space lizards than continue to live under the current terrestrial elite vermin.

So they choose to take the dust off one of their many lab-engineered bioweapons and unleash it on the world population, while ringing all the panic bells about yet another invisible threat and how bad it would be for a world economy that was about to crash anyway.

The big effect is that Americans, Italians, Spaniards and even the Chinese have been living in fear again. Another manufactured world scale problem, courtesy of the usual TPTB.

[Contrarian Expatriate]

Greater Depression
Deflation then hyperinflation
Hyperinflation without deflation
Petrodollar dies sooner than expected
Rapid dollar devaluation like losing more than half its buying power

I like to think about these things in terms of likelihoods, because anyone who speaks with the veneer of certainty, one way or the other, is a blithering idiot.

Greater Depression: Some economists were arguing that we were probably already in a recession before this virus occurred so a major recession is an extremely high likelihood. However, what constitutes a depression is not universally agreed upon. Some will say yes, and some will say no. I think when the economy is allowed to proceed unimpeded, most workers will go back to work and only those who worked for killed off employers will be left holding the bag. However, we were close to full employment before the crisis and that bodes well for those left without jobs to eventually find new ones. I personally would define a depression as prolonged recession (year or more) with a rapid 5 percentage points increase in unemployment rate. So again, because of this suffocated economy, the likelihood is high. However, both people and the Fed are more intelligent today than back in 1929 so it could be short-lived.

Deflation/hyperinflation: These are complex things to predict and much of it has to do with Federal Reserve action to prevent it. I think deflation in the form of a overvalued dollar is here already to some extent (largely because of low gas prices). Hyperinflation is a risk if the dollar printing goes out of control to the point where the world figures out that they have become worthless and they flee to gold, crypto, or another currency instead.

Petrodollar death: It would take a debilitating war, a major split between the US and OPEC, or the concurrent acceptance of a competing currency like the petro-yuan or the petro-ruble to displace the petro dollar. I just don't see this happening in my lifetime, but if it does occur, those diversified in precious metals (especially gold) and crypto will look like geniuses.

Some dollar devaluation will very likely occur because the Federal Reserve does not even want the dollar to remain this strong. Rapid devaluation to half its worth is another matter. I would say such a quick shock to the system would be prevented at all costs by the Fed to prevent panic and a run on the banks. But most economics would agree that such a devaluation of the dollar would ultimately be a major boon to the US economy because U.S. exports would be mega cheap for the world and companies would flock here to make use of the cheap labor and manufacturing costs. The losers in that would be the American expats like myself who would be living a more austere life abroad on that cheap dollar. That is why is it important to diversify out of the dollar right now.

Economics is more of an art than a science and that is why the experts disagree on it so much. The only thing we can know for certain is that we will know when we know. In the meantime, build and hoard your cash, metals, and crypto and you'll be way ahead of the game. It is at times like this when the clever people make huge jumps in wealth. Stocks, real estate, and businesses will be had for pennies on the dollar so position yourself to take advantage soon. Instead of wasting your money on a year's supply of toilet paper and disgusting canned goods, put your money to work so it can work for you while everything is on fire-sale!

Cash is king now more than ever before in my lifetime. The operative now word is "Pounce!"

[Cornfed]

Cash is king now more than ever before in my lifetime. The operative now word is "Pounce!"

The ideal scenario would be if house prices collapsed, allowing me to buy some kind of house with my little money. Then bring on the hyperinflation.

[Shemp]

So they choose to take the dust off one of their many lab-engineered bioweapons and unleash it on the world population,

Avoid attributing to malice that which can be more easily explained by stupidity and bad luck. At this point, it is becoming clear covid19 is not too dangerous. For example, this article about the Italian counting mess: https://www.bloomberg.com/news/articles ... italy-says (article links to the official Italian report: https://www.epicentro.iss.it/coronaviru ... rzo-v2.pdf)

But we didn't initially know covid19 had such low fatality rate and only affected the elderly and even then only the sickly elderly, same as regular flu. Covid19 might have been as deadly as smallpox, for example. So politicians and bureaucrats decided to assume the worst. If wrong, they just say, "we were being cautious" and who can blame that? Whereas if they didn't assume the worst and the worst occurred, then they would rightfully face heavy blame.

Reason whole world is now shutting down is mass panic, because by now it's clear covid19 is not that serious. But panic takes in a life of its own, so politicians and bureaucrats aren't even thinking at this point, they are just blindly acting.

Panic should end in a few weeks. At that point, politicians will have to figure out a way to justify all the incredible amounts of money they spent propping up the financial markets. So expect months of propaganda wars and misinformation campaigns.

[Cornfed]

I went to the supermarket just now before the main lockdown goes on tonight and the atmosphere is just plain weird. Tense, panic buying, rationing, controlled entry and exit, people wearing masks etc. I kept thinking that I must not sneeze, because if I did I might get lynched by an angry mob.

[hypermak]

But we didn't initially know covid19 had such low fatality rate and only affected the elderly and even then only the sickly elderly, same as regular flu. Covid19 might have been as deadly as smallpox, for example. So politicians and bureaucrats decided to assume the worst. If wrong, they just say, "we were being cautious" and who can blame that? Whereas if they didn't assume the worst and the worst occurred, then they would rightfully face heavy blame.

Reason whole world is now shutting down is mass panic, because by now it's clear covid19 is not that serious. But panic takes in a life of its own, so politicians and bureaucrats aren't even thinking at this point, they are just blindly acting.

Panic should end in a few weeks. At that point, politicians will have to figure out a way to justify all the incredible amounts of money they spent propping up the financial markets. So expect months of propaganda wars and misinformation campaigns.

Look, the mortality rate may well be as high as a standard season flu but the speed of contagion is definitely not the same. Virologists put it at 100 times higher. Lots more people are getting sick and comparably many more people of advanced age (>70), with debilitating diseases or compromised immune system, are being hospitalised, often in intensive care. This is what is putting incredible strain on our healthcare system which, in Europe, is only second to France's. Germany is having a lower mortality rate simply because they simply don't have as many old people as we do (our quality of life and longevity is something they have long since envied us for).

My parents are both in their late 50s and in relatively good health. I am more worried about my grandparents (got 3) and lots of other relatives who are much older, at least 2 of them at risk. I heard one of them has coronavirus and being treated at a local hospital. No complications, fortunately, she might be out soon.

[Cornfed]

Lots more people are getting sick and comparably many more people of advanced age (>70), with debilitating diseases or compromised immune system, are being hospitalised, often in intensive care.

So just tell them to f**k off. Problem solved.

[hypermak]

Lots more people are getting sick and comparably many more people of advanced age (>70), with debilitating diseases or compromised immune system, are being hospitalised, often in intensive care.

So just tell them to f**k off. Problem solved.

F**k off where? Back to their homes, to die like dogs?

[Light]

Deflation/hyperinflation: These are complex things to predict and much of it has to do with Federal Reserve action to prevent it. I think deflation in the form of a overvalued dollar is here already to some extent (largely because of low gas prices). Hyperinflation is a risk if the dollar printing goes out of control to the point where the world figures out that they have become worthless and they flee to gold, crypto, or another currency instead.

The Federal Reserve announced unlimited open-ended QE this past Sunday or Monday. That is in addition to all the other programs they announced. We could easily be looking at their balance sheet growing by $10 Trillion or $20 Trillion by the end of the year. $10,000,000,000,000. If that doesn't alarm people as very possible to cause hyperinflation then I don't know what will. They just papered over the last economic bubble and increase the income and wealth disparity. I wouldn't be surprised if that and worse happen again.

Petrodollar death: It would take a debilitating war, a major split between the US and OPEC, or the concurrent acceptance of a competing currency like the petro-yuan or the petro-ruble to displace the petro dollar. I just don't see this happening in my lifetime, but if it does occur, those diversified in precious metals (especially gold) and crypto will look like geniuses.

The United States has been using sanctions as a weapon since they weaponized the dollar and many countries are seeking to bypass the dollar and SWIFT. Russia and China has bilateral trade agreements and many other countries have the same. That trend is likely to continue. I think the European Union could compete with the dollar and China's yuan could compete if China allowed the yuan to be a competitor. The ruble is a volatile currency so unless it stops being volatile I don't see the ruble being a competitor to the dollar unless Russia created a CIS Ruble which I think is something they would like to do to get more control over the former soviet republics but many things get resistance.

Some dollar devaluation will very likely occur because the Federal Reserve does not even want the dollar to remain this strong. Rapid devaluation to half its worth is another matter. I would say such a quick shock to the system would be prevented at all costs by the Fed to prevent panic and a run on the banks. But most economics would agree that such a devaluation of the dollar would ultimately be a major boon to the US economy because U.S. exports would be mega cheap for the world and companies would flock here to make use of the cheap labor and manufacturing costs. The losers in that would be the American expats like myself who would be living a more austere life abroad on that cheap dollar. That is why is it important to diversify out of the dollar right now.

How could the Federal Reserve prevent a rapid devaluation of the dollar? If they rose interest rates like in the 1980s then the United States and many corporations go bankrupt. If they end their QE liquidity then it would weaken any supposed paper recovery and it wouldn't be enough to prevent the rapid devaluation. I don't think there would be a run on the banks because taking money out of the banks in hyperinflation would be pointless but there would be a rush to spend everything out of fear it could lose more which would accelerate the inflation. The Federal Reserve was almost out of options until they created new inflationary policies much bigger than 2008. The Federal Reserve only has QE money printing left to fight deflation and bailout the corporations again but they have nothing they can do to prevent hyperinflation. The dollar almost died in the 1980s and it took 20% interest rates to get foreign nations to begin buying US bonds again and for foreign business to accept them. One year the US bonds were denominated in Swiss Francs. I can't see the Federal Reserve ever raising interest rates above 1% or 2% again. If there is a rapid devaluation or hyperinflation then the Federal Reserve has an unwinnable situation. Either they raise rates and bankrupt corporations and the United States Government defaults on its liabilities or they let it happen and see hyperinflation kill the currency forcing a new currency system.

What is the best way to diversify for an income stream in another currency? Owning foreign dividend stocks or foreign rental real estate? Cryptocurrencies that offer token drops from proof of stake for the owners of those cryptocurrencies?

[Contrarian Expatriate]

Deflation/hyperinflation: These are complex things to predict and much of it has to do with Federal Reserve action to prevent it. I think deflation in the form of a overvalued dollar is here already to some extent (largely because of low gas prices). Hyperinflation is a risk if the dollar printing goes out of control to the point where the world figures out that they have become worthless and they flee to gold, crypto, or another currency instead.

The Federal Reserve announced unlimited open-ended QE this past Sunday or Monday. That is in addition to all the other programs they announced. We could easily be looking at their balance sheet growing by $10 Trillion or $20 Trillion by the end of the year. $10,000,000,000,000. If that doesn't alarm people as very possible to cause hyperinflation then I don't know what will. They just papered over the last economic bubble and increase the income and wealth disparity. I wouldn't be surprised if that and worse happen again.

Petrodollar death: It would take a debilitating war, a major split between the US and OPEC, or the concurrent acceptance of a competing currency like the petro-yuan or the petro-ruble to displace the petro dollar. I just don't see this happening in my lifetime, but if it does occur, those diversified in precious metals (especially gold) and crypto will look like geniuses.

The United States has been using sanctions as a weapon since they weaponized the dollar and many countries are seeking to bypass the dollar and SWIFT. Russia and China has bilateral trade agreements and many other countries have the same. That trend is likely to continue. I think the European Union could compete with the dollar and China's yuan could compete if China allowed the yuan to be a competitor. The ruble is a volatile currency so unless it stops being volatile I don't see the ruble being a competitor to the dollar unless Russia created a CIS Ruble which I think is something they would like to do to get more control over the former soviet republics but many things get resistance.

Some dollar devaluation will very likely occur because the Federal Reserve does not even want the dollar to remain this strong. Rapid devaluation to half its worth is another matter. I would say such a quick shock to the system would be prevented at all costs by the Fed to prevent panic and a run on the banks. But most economics would agree that such a devaluation of the dollar would ultimately be a major boon to the US economy because U.S. exports would be mega cheap for the world and companies would flock here to make use of the cheap labor and manufacturing costs. The losers in that would be the American expats like myself who would be living a more austere life abroad on that cheap dollar. That is why is it important to diversify out of the dollar right now.

How could the Federal Reserve prevent a rapid devaluation of the dollar? If they rose interest rates like in the 1980s then the United States and many corporations go bankrupt. If they end their QE liquidity then it would weaken any supposed paper recovery and it wouldn't be enough to prevent the rapid devaluation. I don't think there would be a run on the banks because taking money out of the banks in hyperinflation would be pointless but there would be a rush to spend everything out of fear it could lose more which would accelerate the inflation. The Federal Reserve was almost out of options until they created new inflationary policies much bigger than 2008. The Federal Reserve only has QE money printing left to fight deflation and bailout the corporations again but they have nothing they can do to prevent hyperinflation. The dollar almost died in the 1980s and it took 20% interest rates to get foreign nations to begin buying US bonds again and for foreign business to accept them. One year the US bonds were denominated in Swiss Francs. I can't see the Federal Reserve ever raising interest rates above 1% or 2% again. If there is a rapid devaluation or hyperinflation then the Federal Reserve has an unwinnable situation. Either they raise rates and bankrupt corporations and the United States Government defaults on its liabilities or they let it happen and see hyperinflation kill the currency forcing a new currency system.

What is the best way to diversify for an income stream in another currency? Owning foreign dividend stocks or foreign rental real estate? Cryptocurrencies that offer token drops from proof of stake for the owners of those cryptocurrencies?

Monetary policy is extremely complex and measures that normally work don't always when there are confounding factors. The best I can tell you is that since the dollar enjoys world reserve currency status, your assumptions don't necessarily hold true. People have been predicting the demise of the dollar for decades, but it stays strong because of the way THE WORLD views it. In fact, the world wants dollars when there is a crisis like now and that it why it has gone up in value recently.

I don't want to comment on the best way for income streams, but the way I do it is via high interest term accounts, real estate equity crowdfunding abroad, and non-publicly traded (non-stock market) that REITS invest in foreign real estate. There are several available that you can look up.

I have been saying for years that publicly traded REITS on the stock market are no better than ordinary stocks and they too have been crushed recently. One has to decouple from the stock market to benefit from true asset allocation.

[Shemp]

Germany is having a lower mortality rate simply because they simply don't have as many old people as we do (our quality of life and longevity is something they have long since envied us for).

No. The rate in Germany might be, say, 20% higher than Italy because of the slightly older Italian population, but not 10000% higher (100x). The Italians (and Spanish) have simply decided to go crazy, probably related to the tense political situation. Northern Italy is where Berlusconi came from.

As an Italian, you know there is constant traffic between north and south Italy. If tjis covid19 is really do contagious, surely the disease would have spread all over Rome and Naples and other crowded cities of the south. So why is only north Italy so badly affected? Answer: crazy Italian politics mixed with mass hysteria.

As for your grandparents, the worst evil you could wish upon them is to be dragged off to a hospital and spend their last days with a tube shoved down their lungs pumping air in and out like in some horrible torture chamber. Best thing is for old people to remain quarantined at home while young people deliberately get sick then recover so as to create herd immunity, which will take several months. Then the epidemic will fade away and the quarantine of old people can end.

[HappyGuy]

I kept thinking that I must not sneeze, because if I did I might get lynched by an angry mob.

Tucker: America won't be the same after the pandemic