We knew it was coming and have been discussing this for weeks now – more, more, more! The Speaker of the House, Nancy Pelosi, and her fellow Democrats are putting forward another spending bill with a price tag of some $3 trillion. This is not the total of all spending since the onset of COVID19, this is simply another bill unto itself. About 1/3 of the bill will be to assist State’s governments because many of them are broke as well. So follow the logic – broke states asking a broke federal government for assistance – got it. In addition to this, the federal government announced a record monthly budget deficit for the month of April amounting to around -$740 billion. Recall, that the US Treasury announced last week that net issuance of Treasuries would amount to around $3T just for Q2 of 2020. Well it now appears that if this new bill should pass that they’re going to have to issue another $3T. Of course at this time it is only the Democratic party’s version. However, given comments by the President, his economic advisors, the Treasury Secretary, and members of the Federal Reserve, they’re all at the ready to spend/print/lend “whatever it takes.” Therefore, it can be reasonably assumed that another spending bill will be passed sooner rather than later. Also remember, that the national debt is over $25T and the deficit is projected to hit $4T. However, if more spending is approved then both of these numbers will be much higher by end FY2020.
Additionally, we discuss negative interests rates as the markets are pricing them in for early next year. The Federal Reserve has begun purchasing corporate debt and yet the markets sold off today – buy the rumor, sell the fact? And lastly, we read excerpts of an article highlighting some of the stresses in the residential rental market and how this environment will be seriously affecting both landlord and tenant for some time to come. This is only just beginning. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Bailouts #Recession #Debt #Depression #USA #EndTheFed #Gold #Deficit #Protests