Tag Archives: Economy

We Destroyed the World’s Greatest Economy for No Reason, by James Rickards

The economy will be weaker than it was before Covid-19 for many years. From James Rickards at dailyreckoning.com:


Everyone knew the second quarter of 2020 was going to be a disaster, and it was. The U.S. economy fell by 31.4% (annualized) in the second quarter.

But, the expectation was that we’d have a V-shaped recovery with a sharp bounce-back in the third quarter, a reopening of closed businesses, rehiring of the unemployed and a rising stock market.

But so far, the economy is not following the script laid out for it by the politicians and experts.

The stock market did rally, but that was mainly because the stock index components are heavily weighted to companies least affected by the pandemic including Amazon, Apple, Netflix, Alphabet (Google), Facebook and Microsoft.

Of course, it didn’t hurt that the Federal Reserve printed $4 trillion of new money and backstopped money markets, corporate bonds, municipal bonds, foreign central banks and other facets of capital markets with direct purchases, guarantees or currency swaps.

Even at that, stocks have been struggling since hitting new highs on September 2.

And yes, there was growth in the third-quarter (the best estimate is that the economy will grow at about a 35% annualized rate, but we won’t have official figures until October 29).

The 35% third-quarter recovery was to be expected as Americans got back to work after the lockdown. That 35% rate might sound like the third quarter will basically make up for the second quarter, but it won’t.

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Writing to you from lockdown, by Simon Black

Simon Black sees the coronavirus is being underestimated, but he sees the bright side of it. From Black at sovereignman.com:

As you might have heard, Puerto Rico is now on lockdown. Government offices and private businesses are closed, and no one is allowed to leave their homes except to buy food, attend medical appointments, etc.

This is quickly going to become global policy, at least in the West. If these measures haven’t hit yet where you live, they’re probably coming soon.

So much of what we’ve been writing about for so long is now happening. But even still, it feels surreal.

I think a lot of people are still in a deep fog right now. Reality still hasn’t quite hit. It reminds me of that line from the first Matrix movie when Morpheus tells Neo—

“You have the look of a man who accepts what he sees because he’s expecting to wake up.”

I imagine a lot of folks still think that the government is going to sound the ‘all clear’ in a couple of days… that the virus has been eradicated and life will quickly go back to normal.

Realistically that’s probably not going to happen.

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