Financial Survival Network, Released on 4/30/20
Richard is in Thailand where the virus never took hold despite the fact that thousands of Chinese visited prior to the outbreak. Assuming the virus doesn’t return, we’ll be viewing this as one of the great economic experiments in history. In the US, credit growth has been the great driver of economic expansion. When credit growth slowed or ended, we saw recessions take hold. During 2008-09 credit growth slowed and the Great Recession ensued. Then the Fed reflated with asset inflation. Now we’re in a new paradigm. The virus has been a huge blow to the credit based economic growth cycle. The Fed is doing everything in its power to keep the credit bubble growing. What will it look like after the Virus? If we let everything collapse then the government’s debt will explode anyway. $5-10 trillion in new debt is coming. The Fed will have to underwrite it. Their balance sheet has expanded 52% in the past 6 weeks. What would happen it there’s no new inflation and the world doesn’t end? If not, we’re living in a new economic environment. It will be a brave new world. Make sure you take advantage of Richard’s special offer to MacroWatch, just use the code FACTS. And sign up.
Richard Duncan is an author & economist who has worked as an equities analyst in Hong Kong, served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok. He also worked as a consultant for the IMF in Thailand during the Asia Crisis. He is now chief economist at Blackhorse Asset Management in Singapore. Richard Duncan is the author of three books on the global economic crisis, the most latest being The New Depression: The Breakdown of the Paper Money Economy