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Why the Coronavirus Bailout Is Going to Gut Your Wealth

Jeff Siegel

Written By Jeff Siegel

Updated April 19, 2020

Not even the Fed can save us now.

As much as the gatekeepers of monetary policy will try, nothing they can do can stop the bleeding.

Since this pandemic reminded the world that political pandering is no substitute for actual preparedness, the Fed has desperately tried to stave off a market collapse with unlimited quantitative easing.

There’s been the revitalization of the Term Asset-Backed Securities Loan Facility, unlimited purchases of treasury and mortgage-backed securities, and the creation of special purpose vehicles that enable the purchase of investment-grade corporate bonds.

All this has been done to essentially slow the massive deterioration of financial markets. And none of it has worked.

Sure, there have been a few rebounds in a sea of massive sell-offs over the past few weeks. But there’s a certain reality that not even the Fed God can alter…

The U.S. economy has, for a very long time, been an illusion of stability and strength.

Screwed for Decades

We’ve actually been screwed for decades. But this is the first time the mask of incompetence has been pulled back. And now, bureaucrats, politicians, and an army of yes-men are trying to dam up the Mississippi with toothpicks and twine.

It’s an exercise in futility, to be sure.

And while the Fed is showing its stripes, lawmakers have earmarked trillions of dollars for all kinds of bailouts, which will include individual checks for the “regular people,” and massive infusions of cash for the industries that provide employment for literally millions of people.

While I certainly understand the need to provide life rafts to so many people and corporations, this should be a wake-up call for every U.S. citizen.

The truth is, if our economy was as strong as the politicians tell us, it should’ve been able to weather this storm much better.

As well, if our elected leaders were as competent as they proclaim, their efforts would’ve been made back in January to better prepare for this. The fact that our hospitals are begging for basic medical supplies because there wasn’t enough time to procure them before this shit storm barreled through illustrates just how inept our government is.

And here we are now…

Getting ready to see $2 trillion worth of checks sent out to both citizens and corporations because, without that cash infusion, things could get a lot worse.

It’s quite a pickle we’re in, though.

On one hand, more jobs will be lost, more people will get sick, and more families will go hungry if they don’t get some relief.

But this isn’t free money.

Instead, it’s just more debt and liabilities being placed on the shoulders of future generations.

As I mentioned back in January, the U.S. is more than $23 trillion in debt and will add more than another trillion every year for the next 10 years.

According to the Congressional Budget Office (CBO), by 2049, the national debt will be nearly one and a half times the size of the U.S. economy. The CBO calls this “unprecedented levels.”

That statement was made before the U.S. geared up to take on another $2 trillion.

And by the way, this virus hasn’t even begun to peak yet.

Will $2 Trillion Be Enough?

I have no idea. But either way, with continued bailouts come increasing debt burdens.

And what makes this particularly frustrating is that this $2 trillion really is a crap deal for most Americans.

As Libertarian-leaning Congressman Justin Amash recently opined:

This bipartisan deal is a raw deal for the people. It does far too little for those who need the most help, while providing hundreds of billions in corporate welfare, massively growing government, inhibiting economic adaptation, and widening the gap between the rich and the poor.

This is not going to end well.

But, as you know, with every crisis comes opportunity.

And we’ll continue to find those opportunities for you — just like we always have.

Stick with us, and we’ll not only help you get through this but actually make a few bucks along the way.

To a new way of life and a new generation of wealth…

Jeff Siegel Signature

Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

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