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Started by wglassfo - March 22, 2020, 12:48 p.m.

I posted a short time ago the deficit would hit 30 trillion in ??? short yrs with a 25 trillion deficit shortly

I did not expect 25 trillion in a time frame of weeks

If the treasurry and/or gov/t comes up with 4 trillion of loans. 3000 to families of four, loans to business which most will be forgiven all in 8-12 weks, then we just blew thru a 25 trillion deficit in weeks not months

I would expect this is not the last stimulus pkg. we will see as congress and the treasury plus the Fed are pulling out all the stops to inject liquidity and a sense of "the sky is not falling" into the general population

As MM says when we reach the top of the trajectory and numbers level off or fall that should calm everybody down

When we do calm down,, which will happen, the damage done to small business, zombie Co's with insufficient cash flow  to re-start operations with out even more bail out money, the damage will re-shape our economy permately

And quite frankly the damage will extend to people with retirement savings almost completely wiped out, to hedge funds wiped out, to banks facing loan defaults, to small business with supply chains broken, all of which will encourage  further financial stimulus pkg being passed by congress to re-start the economy

That IMHO means massive money printing and a 30 trillion dollar deficit

Is inflation the result of the damage done

I don't know but a strong case could be made for eventual inflation as we pass through 1st deflation which is happening now in most markets to inflation

I hate to use the word depression and most can't believe that is possibble, including myself

But if inflation does happen and is not stopped, as it did with some kind of drastic action such as the Volker int rate thing which destroyed countless individuals, what else can one logically assume

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