So much has happened in 2020, and the year is not even over yet. It has been full of loneliness, misery, suffering, and unhappiness for millions of people around the world. From lost jobs to depleting bank accounts, it has been a horrific start to the decade for so many folks. When will this lousy year come to an end?
Compared to what has occurred this year, the problems we faced before these times were nothing – or were they? On the surface, everything appeared to be booming, but buried within the fabric of the country was a fragile economy. While we address the issues of our post-Coronavirus world, we have forgotten about the myriad of problems in our pre-pandemic world.
A Mood Swing
Since President Donald Trump’s ascent to the White House, Liberty Nation has extensively reported on the facts, developments, and possibilities in the U.S. and global economies – the good and the bad. Bubblemania, the subprime market, the de-dollarization push, inflation, and monetary policy – no stone has been left unturned. LN has covered numerous major economic stories under the sun, many of which highlight that the United States has a lot of pre-COVID-19 matters to resolve. Because of the public health crisis, many problems threatening the world’s largest economy have taken a backseat.
The U.S. economy has not suddenly forgotten about the trade-in treadmill in the automobile industry or ballooning household debt levels. The problem, however, is that the Coronavirus-induced collapse has added to the nation’s woes from the 11-year bull run. The budget deficit, the national debt, and the insolvent Social Security were critical issues last year, but now they have become toxic. The Federal Reserve’s balance sheet was incredibly massive in 2019, but it has exploded in the last couple of months.
Although the stock market skyrocketed to record highs earlier this year, the equities arena’s infrastructure was founded on shaky ground. Any time the U.S. central bank tapered its balance sheet or raised interest rates, even by just 25 basis points, the leading stock indexes tumbled. If the central bank loosened the training wheels, the market would plummet. Should the Fed ever tighten monetary policy, the New York Stock Exchange’s fragility will be exposed again.
After more than a decade of singing Happy Days Are Here Again, it is easy to think that we all paid for the sins of the past during the March market mayhem. But that may have only been a taste of things to come. While another crash in the immediate future is unlikely due to the Eccles Building’s monumental money-printing endeavor, it will happen sometime again. This time, however, the financial crisis will be more severe because the economy still needs to pay for the excesses of the last decade and cover the tab for all the printing and spending amid the COVID-19 pandemic.
Oh, yes. There will be blood. So, by the time you are healed from the Coronavirus public health crisis and your bank account is once again plump and juicy, the next market meltdown will arrive. You will no longer be singing Doris Day’s famous tune, Aren’t You Glad You’re You? You will wish you were somebody else, perhaps Warren Buffett or Ray Dalio, if only for his net worth!
The Ghosts of America’s Past
What could have more of an impact on the U.S. economy heading into 2021? Could it be the result of the presidential election in November? The COVID-19 vaccine? China? There are so many factors that avoiding the bombardment will require as much luck as Earth’s fate in the solar system. Like Jupiter protecting the blue marble of the cosmos, the Fed will undoubtedly intervene whenever it can and shield the economy from destruction. But the ghosts of its past will come back to haunt the U.S. economy, forcing us to hold on to our gold coins and join in prayer with the CNBC and Bloomberg teams.
Read more from Andrew Moran.