According to Marketwatch, major financial analysts are declaring that the next 45 days will be the ‘most critical’ in US history due to the ongoing situation with the financial markets.
“The next 45 days may just become the most critical period in U.S. financial history,” he wrote in a newsletter published Wednesday. “While on average we may face a bear market every 10 years, this one is like no other,” he said.
The contrarian money manager, who is a disciple of famed investor Sir John Templeton, said that the timing and execution of the reawakening of the U.S. economy from its dormancy could be one of the biggest factors in determining how the market recovers from COVID-19, which has forced swaths of businesses to shut down to help stem the spread of the deadly contagion that has infected more than 2 million people and claimed 137,000 lives, according to data aggregated by Johns Hopkins University as of Wednesday evening.
And even if the economic revival is executed flawlessly, the founder of the eponymous Toledo, Ohio-based investment advisory firm said the result will be a so-called U-shaped recovery, where a rebound in business and consumer activity from pre-crisis levels will be long and slow.
“Even if we execute properly, the recovery will take time and a best-case scenario is a ‘U’ shaped recovery,” he wrote. “The much talked about ‘V’ shaped recovery is no longer in the equation because of the unprecedented combination of negatives with this crisis,” he said, referring to hope for a recovery that is sharp and fast. (source)
I have argued that in a situation such as this, no recovery is going to happen because the issue is linked to the debt. It does not have to do with what one is doing, but is a systematic problem that is manifesting as it inevitably was going to.
The US dollar is dying the death it was always going to. I’m not saying it will die right now, but that the money printing that the government is doing is worsening it significantly, meaning there is a chance of a hyperinflationary scenario in the future that should not be discounted as a mere conjecture.
There will likely be a short “recovery”, but certainly not a true one, and just long enough until the election cycle passes, which it likely can be delayed until. It is after the election that one can expect to see serious problems, possibly to the point of a complete collapse in the currency itself.
The fundamental advice of the past is just as relevant today. One needs to work as hard as possible, pay down as much debt as one can, and get ready for the future. The net 45 days will be important, but of greater relevance is the next four years as the political winds begin to turn and impoverished, angry, frustrated people look for revolutionary ideas as the solutions to their problems, and given the general decline in religion among Americans, may lead them to support very radical ideologies.