The Feds’ Disaster Deepens By Bill Bonner

SAN MARTIN, ARGENTINA – The plague will pass.

The most recent reports show the virus may be losing its deadly oomph. Since April 4, the death count outside of New York is down, not up.

And here’s another interesting piece of the puzzle…

According to the National Center for Health Statistics, deaths from pneumonia this year are running about 1,000 per week fewer than usual.

Most likely, normal, seasonal pneumonia deaths are being counted as COVID-19 virus fatalities… making the newcomer seem worse than it really is.

Nine states – and several foreign countries – continue to resist the “lock ’em up” approach to fighting the disease.

So far, they seem to be suffering no more fatalities than the others. We’ll see how it turns out for them.

But the hype against the virus is looking less and less like real science… and more and more like another one of the feds’ fake wars.

We have no information you don’t have, Dear Reader… maybe less. We claim no expertise in the matter, either. Still, our guess is that the bug will prove less of a threat than the media and the government now project.

But while the natural calamity runs out of gas, the manmade one gets a tankful…

When Money Is No Object

Hardly a day goes by that some jackass-du-jour doesn’t recommend something really stupid.

Yesterday, for example, you could hardly sneeze in the Capitol building without infecting half a dozen knuckleheads, each with a plan to waste the public’s money.

The U.S. deficit is already rising to 13% of GDP, a new record. But the pols want more.

ABC reports:

House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer on Wednesday called for half a trillion dollars in additional financial aid to boost local and state governments, small businesses, food stamp recipients and hospitals struggling amid the coronavirus pandemic.

Their request comes in response to the Trump administration’s call for more than $250 billion to help ailing small businesses.

Meanwhile, the Federal Reserve let it be known that (fake) money was no object. It will do whatever it takes to protect Wall Street’s speculators.

Its balance sheet (roughly America’s monetary base) already approaches $6 trillion. By the end of the year it is expected to be $10 trillion… or half of U.S. GDP.

And economics advisor Larry Kudlow is now talking about putting into service the Fed’s “ultimate bazooka.” Word on the street is that what he has in mind is getting the Fed to buy stocks.

The idea of it must have sent hearts a-tingling yesterday on Wall Street. Investors bought, driving up the Dow more than 700 points.

The fix is not exactly in. But it’s close enough, investors figure. If the Fed puts its shoulder to raising stock prices, stock prices must rise.

Investors aren’t wrong, necessarily. But floating up stock prices with a flood of fake money is not without its hazards.

Typically, the economy drowns. You end up with less output and more money.

Then, consumer prices move up along with stock prices. And in the long run – which can happen faster than we expect – the rise in consumer prices outpaces the rise in capital prices.

In other words, sooner or later, the real prices for stocks come to reflect the real value of those companies. And in an economy suffering from high rates of inflation, it’s hard for companies to maintain profit margins. Values go down, not up.