The coronavirus, as many health experts are now stating, is beyond the point of containment in North America, if not the entirety of the world. This is unfolding in real time, and as I have stated for over a month now, the economic ramifications are going to be of historic proportions.
As Dr. Scott Gottlieb, the former head of the Food and Drug Administration recently stated, the best that we can hope for now in the West is that we slow down the rate that the virus is spreading, prolonging the lifespan of the virus, but enabling our healthcare systems to handle the monumental workload that is about to come their way, saving countless lives in the process.
Unfortunately, this is going to come at a cost, businesses around the world are already feeling the pinch through a greatly reduced supply chain, via the impact that the coronavirus has had on the Chinese manufacturing sector, however, the real pain is yet to be felt.
Next comes the quarantines, closures and most importantly, self-isolation phase, the latter of which has the potential to bankrupt many small to medium size businesses who won’t be able to weather the storm, due to a greatly reduced cash flow.
Large business, particularly the ones that Western governments deem to be “too big to fail” will be bailed out in the coming months, if need be.
The precedent for this unfolding was already been set by the 2008 crisis and you can expect that the Federal Reserve and other Central Bankers around the world will rev up the imaginary printing presses, printing that sweet, sweet digital fiat currency in illusionary bucket loads.
Never before has it been easier to enact quantitative easing, than in the present day, than any other time in history. Everything is digital, including the vast, vast majority of our fiat money supply.
Issue some more made up out of thin air Treasury Notes, problem solved… Well, at least in the short term.
Already, we can see this unfolding in front of our very eyes.
In what can only be described as a dramatic attempt of “shock and awe”, the Federal Reserve has gone “full force”, pumping an extraordinary $1.5 trillion of “Not QE” into the system.