Although there may be some debate about the true origin, cause, and date of the COVID-19 virus … there’s no doubt about its presence and impact today.
And just as the health crisis began quietly, before exploding onto the scene, so it may be with the subsequent financial crisis.
After all, if you’re not both an epidemiologist and paying attention … or listening to one … like our friend Chris Martenson at Peak Prosperity …
… you probably didn’t know anything about COVID-19 until there was no toilet paper on the shelves at your local store.
Clearly, there were people who knew and acted sooner than others …
… and we’re guessing most folks would prefer to be in the group who’s aware and prepared.
Fortunately, being late to the toilet paper run didn’t result in being completely wiped out. (Sorry, we couldn’t resist.)
But as the health crisis and resulting lock down has mutated into an economic crisis …
… and is already showing signs of spreading into a financial crisis …
… the consequences of being ignorant and ill-prepared could be a whole lot messier to handle than a toilet paper shortage. (Okay, we’ll stop now.)
Punning aside, our point is there are abundant and alarming clues in the news that a financial contagion has already begun.
But preparing for it is a lot more complicated than simply stocking up on paper products … including cash.
Preparing is also a lot bigger than just looking out for you and yours.
Just as society rallied to “flatten the curve” … slowing the contagion to preempt the number of afflicted from overwhelming the health system …
… we’re “all in this together” and need to flatten the curve of people going broke and overwhelming the financial system.
Because while you might be able to get along in life not exchanging germs with other people …
… it’s impossible to live in a world of free enterprise without trading with others.
We all need each other to be financially healthy if we want to build resilient prosperity.
So, it’s in everyone’s enlightened self-interest to both prepare individually … and help others prepare to prosper through the wild ride looming on the horizon.
That’s why we’re organizing a Crisis Investing webinar … featuring a STELLAR faculty, including …
Richard Duncan – Economist, best-selling author, former consultant to the IMF
Peter Schiff – Money manager, best-selling author, podcaster, financial pundit
Robert Kiyosaki – Mega-millionaire investor, greatest-selling financial author in history, host of the Rich Dad Radio Show
Nomi Prins – Former Wall Street insider, geopolitical financial expert, investigative journalist, best-selling author
Danielle DiMartino-Booth – Former Fed insider, popular market commentator, financial newsletter publisher, best-selling author
Brien Lundin – Gold expert, publisher of Gold Newsletter, New Orleans Investment Conference producer
And that’s not everyone. The Crisis Investing webinar is a big and important project.
We’re working hard to collect the thoughts and perspectives of a large, well-qualified group of thought leaders, insiders, and seasoned investors.
By the way … this isn’t a pitch … because the webinar is totally free.
So, be sure to tell your family, friends, neighbors, associates and total strangers to get on the Advance Notice List ASAP.
Remember, most of the “experts” on mainstream financial media are directly or indirectly underwritten by and beholden to Wall Street and the big banks.
So, most don’t understand or value Main Street investing … especially real estate. Yet that’s where most people live … and where all the fallout lands.
Of course, it’s possible to see danger coming in time to get in position to avoid most problems and capture many opportunities.
Of course, this requires focus and diligence because these are truly unprecedented times …
Fed’s balance sheet tops $7 trillion, shows increasing buying of corporate bond ETFs
MarketWatch, 5/21/20
Not sure what that means to you? You’re not alone … and that’s the point.
The wizards behind the curtain are pulling levers, flashing lights, and using smoke, mirrors, and fancy words to manipulate the currency, credit markets, and interest rates YOU depend on.
Hint: The Fed’s balance sheet represents how many dollars they conjure out of thin air … and it’s nearly doubled since the COVID-19 crisis hit just a few months ago.
But anyone with even a rudimentary understanding of economics knows that no amount of money printing creates products and services.
If it did, then the Fed could just print money and everyone could stay home and watch Netflix.
But like any form of debt, money printing is simply a claim on existing and future products and services.
If you earn, borrow, or measure wealth in dollars, this should concern you.
Meanwhile …
Over 4 million Americans are now skipping their mortgage payments
MarketWatch, 5/24/20
With nearly 40 million jobs lost in the last few weeks … defaults on rent, mortgages, car payments, credit card payments should surprise no one.
Sure, the Fed can print money for Uncle Sam to direct deposit to everyone.
And MAYBE they’ll use it to make debt payments … versus less important things like say … EATING.
But you may recall …
Alarming number of Americans don’t have enough savings for unexpected expenses
New York Post, 1/30/20
“One in four Americans do not have enough money saved to cover more than two months of expenses, according to a recent poll.”
Many of those folks are your tenants. But it’s not just the little guys who are struggling as the economic contagion spreads …
Default Notices Are Piling Up for Retailers Unable to Pay Rent
Bloomberg, 5/22/20
Hertz, slammed by coronavirus, to continue under bankruptcy protection
Chicago Tribune, 5/26/20
‘No business is built for zero revenue.’
NO business is built for zero revenue. Neither is any city, state, or nation.
No society can survive long without production AND commerce.
So, while it’s good that the world is coming out of its COVID-19 induced economic coma …
… the extent of the damage … and what’s temporary vs what’s permanent … will not be known for some time.
But with so much uncertainty remaining about whether the health crisis at the front end of this chain of calamity is past its peak …
… there’s no rational reason to think the subsequent economic crisis is even close to over.
And even if it was, all those missed payments and printed money is likely to create a financial system crisis … and perhaps even a currency crisis … down the road.
So our bet is things get MUCH choppier before they get better.
BUT … that’s not all bad news. In fact, there’s likely a lot of opportunity in all this mess.
So rather than go full-fetal freak out … or waste a bunch of time blaming (pick a perp or scapegoat) … or philosophizing about what the people in charge should or shouldn’t do …
… we think you’re better served to stay focused on what YOU can do NOW.
We’re sorry if this is a little repetitive …
… but if you were on the deck of the Titanic, would you want the crew to stop boring you with repeated directions to the lifeboats?
Of course, no one knows exactly the “best” way to mitigate risks and capture opportunities … there’s still too much unknown.
But as we often say, focus on being diligent to control what you can so you’re in the best position to respond to what you can’t.
And listen to as many smart people as you can who are also diligently preparing and paying attention. That’s what the Crisis Investing webinar is all about.
The follow up to the webinar will be to take all these expert perspectives and then come up with the best ideas and action plans.
But be patient. With MANY hours of interviews, the project won’t be ready for a few more weeks. Stay tuned!
Meanwhile, we still think it’s wise to get as liquid as you can while you can … especially with respect to equity and taking advantage of the cheapest mortgage money you may ever see.
Take a good look at your portfolio … and think about how it would respond to rising rates, a banking crisis, a credit market collapse, or a substantial decline in rents.
Remember, “no business is built for zero revenue.”
Sometimes you simply can’t save everything from a worst-case scenario. So it’s also important to know when to retreat and preserve capital … so you can live to invest another day.
But if you’re liquid, conservatively structured, well-educated, and connected … you’ll probably hold onto most of what matters …
… and easily make up any losses by grabbing the bargains likely to be littered across the landscape as this all unfolds.
And if this turns out not to be as big a deal as it seems … how are you worse off for being prepared?
