28 May 2020
SCHIFF GOLD — The economy was booming. The stock market was setting records. Then coronavirus came along and governments shut things down to minimize the pandemic. That led to massive layoffs and a nasty recession. But once states open up, things will spring back to life and the economy will go back to being great again.
That’s the mainstream narrative. But it’s not based on reality.
In truth, the economy was a Fed-induced bubble before the pandemic. The central bank has managed to reinflate the stock market bubble despite the economic destruction, but it is nothing but a Fed-induced sugar high. And the economy won’t likely rebound quickly, even after things open up.
There are all kinds of reasons to doubt the quick economic recovery narrative. We’ve reported on the number of over-leveraged zombie companies, skyrocketing household debt, the battered labor market, and a potential cash-flow crisis even after the economy gets moving. […]
Wonder if any small businesses owners in downtown areas who had planned to not reopen are looting/trashing their own stores during the riots so they can extract insurance payouts to have a little walking-away money in their pocket. Wouldn’t surprise me one bit.
Peter Schiff, perennial über-bear — he’ll be right someday.