It is Monday March 16. The time in Europe right now is 13:15. The sun is shining for a change, roads are quiet and life for many people has slowed dramatically.
Everything around us looks peaceful at this moment. In December 2019 ‘shit hit the fan’. Governments around the globe only reacted with serious action to limit the virus spread these last few days and it still isn’t enough. Medical doctors in the UK are now violating health law by preparing for more Corona #19 and calling patients withot life treatening conditions to delay already booked operation. Businesses are closed. We must not socially engage, yet I see 500 vehicles parked at a local German Hornbach DIY shop. Just amazing!
The US markets will open limit down today, probably. The Margin call today will be massive and the situation for investors could start to look a lot worse than 1929.
The most likely scenario is a complete closure of all financial market trading today to buy time for a universal response to what already looks like a total lack of liquidity. US Banks are said to be well capitalized. The thing of course they are not prepared for this type of scenario. In Europe most system Banks are technically bankrupt. The world will be looking at the Fed for guidance and that guidance will be given. Let us just hope it comes from really wise people.
The single option the Fed has is to print big time. This is the QE to infinity that has been predicted by many influencers for years. 1, 2 or even 5 Trillion probably won’t be enough and major options for a financial reset are already exhausted. Governments have the additional option to confiscate. We can only wait and see what authorities come up with. We could expect fiscal measures that will level wealth for many. A price will have to be paid by all of us.
The good thing is that 95% of the world population will probably bounce. This will slowly drive life in general and the economy back up to normal levels again. It may take years and that is probably a good thing too.
In the meantime we will be looking to add to our Silver position to a maximum of 50% portfolio allocation. If cash values largely evaporate, at least we have some real money left.