The problem is the debt bomb. In 2 months there might not be an
economy to rebuild.
Just one simple example. They shut down a big building project here.
100 guys lost their job immediately. This will then ripple through all
of the suppliers and the local businesses that were supporting those
100 guys. The contractor has materials sitting on the job and in the
pipeline that are bought on credit. That bill will come due with no
revenue coming in. His completion draw will be late.
Of course the 100 laid off guys have bills due too.
That is just one project. They are shutting down jobs all over town.
They also shut down the beaches and all of those people are out of
work. Loans the business owners planned on paying with the profits
from the spring activities are not going to be paid off.
If mortgages are not being paid, the banks will be stressed and since
these mortgages are collateralized, this can ripple through the whole
financial community. There are still plenty of derivatives out there
leveraging those collateralized loans it makes this a 2008 situation
if it goes on too long.
Corporate debt is at an all time high and that debt needs to be
serviced too, with decreasing revenues.
At a certain point, with tax revenues cut down, government services
will have to be cut. They have debt they need to service too.
At a certain point this virus starts looking pretty insignificant.
Nobody is saying it yet but you will start hearing this soon.
I hope by the time they acknowledge it, we still have time to do
something.
I am not sure the government can print enough money to fix this
without crashing the dollar. I doubt anyone wants zero percent bonds.
You might as well hold the cash and hope it is still good for more
than toilet paper.
Maybe, as in my case, we war babies are going to have to help the younger
generation financially. What the hell, they just get the bucks without having to
wait for us to die.