How to Pay?

The stimulus package is a welcomed relief for millions of hard-working Americans.

Since its long-anticipated completion from our inept government, it will now go to agencies and lenders across America to be translated for ordinary folk.

Here are some items included in the bill that specifically affect our relationship.

Paychecks to families.

Minor business loan forgiveness. The concept is exciting - the wording is vague and subject to further interpretation by lenders. From what I understand (please consult your loan issuers and banks to clarify), a small business can get a loan backed by the Federal Government with waived repayment terms for back payroll costs, mortgage payments, rent, and utilities. In exchange for the waiver, a business needs to keep employees on payroll from 2/15.20-6/30/20

There are no Required Minimum Distribution (RMD)requirements in 2020. So you don't have to take it if you don't need money.

Withdrawals from IRAs 401k deemed COVID-19 related are penalty-free.

My biggest ques tion in this slush is how we pay for 6 trillion dollars. We do not for the moment!

This is my take on what the Treasury will create to sustain the cost:

Introduce a 50-year treasury bond and deflate the value of the dollar.

Sounds grim. Yeah, I know. I live here, too. We can pull it off.

We have the strongest, most prized currency in the world right now. The dollar is close to an all-time high, driving global currencies sharply lower.

If my theory proves true - we sell bonds to people who are clamoring to buy them outside the USA because we are still the best and safest lender on earth, and our bonds are in very high demand.

Next, the Fed prints Dollars till the cows come home in hopes of deflating the current value.

Purchasers outside the US will get a different return when this occurs because the dollar is devalued. So they don't sell it. Instead, they roll it over again at maturity, waiting for the dollar to rise above levels now to make it worth selling.

I hope we sell it all to China.

A weaker dollar will create inflation. Gold, Silver, Gold miner ETFs, Oil, and stocks become more attractive to the seasoned investor. I will continue to pen my thoughts as pieces of stimulus are clarified. There is an opportunity every time a trial is conducted.

I continue to remain positive for all of you - and I am grateful for these three things today:

My bicycle (social distancing plus exercise a win-win)

My Girlfriend's cooking, because I would eat popcorn for all three meals. The triple pack of paper towels found at Target! Major score!

Ps Fun Fact: 6 Trillion per American is $16,438.00

Always good to have wealthy friends.

Cheers 

Christopher R. Lakian