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The Unstoppable Coronavirus vs. The “All-Powerful” Federal Reserve

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Michael Snyder is the publisher of , The American Dream Blog and The Truth

Has the Federal Reserve finally met an opponent that it won’t be able to defeat?  Ever since the last financial crisis, unprecedented intervention by the Fed at key moments has kept the economy and the financial system relatively stable.  No matter what has come along, it has seemed like the Federal Reserve has always had an answer, and this has created an environment that has enabled the most ridiculous stock market bubble in U.S. history to grow to epic proportions.  But now COVID-19 is perhaps the greatest challenge that the Fed has faced in modern times.  No matter how low interest rates are pushed, and no matter how much helicopter money the Fed drops from the sky, it isn’t going to cause fearful Americans to go shopping, take trips or start businesses.  And nothing that the Fed can do will be able to mitigate the severe disruptions to global supply chains that we are currently witnessing.

But that doesn’t mean that the Fed isn’t going to go back to the same old playbook that has worked so well in the past.

On Tuesday the Fed announced an emergency rate cut, and instead of soaring, stock prices absolutely tanked.  In fact, the Dow Jones Industrial Average ended the day down 785 points

The decision to cut rates by half a percentage point came two weeks before the Fed’s scheduled meeting as the central bank felt it was necessary to act quickly to combat the effect of the virus spreading worldwide. It’s the first such emergency action coming in between scheduled meetings since the financial crisis.

The Dow Jones Industrial Average closed 785.91 points lower, or nearly 3%, to 25,917.41; it rose more than 300 points earlier in the day. The 30-stock average gyrated between sharp gains and solid losses after the decision was announced. The S&P 500 fell 2.8% to 3,003.37 while the Nasdaq Composite pulled back 3% to 8,684.09.

At this point, the Federal Reserve doesn’t have much room to reduce interest rates.  But of course President Trump was disappointed in the Fed’s decision because he wanted an even bigger rate cut

Trump tweeted following the Fed’s move – keeping up his longstanding practice of demanding lower rates.

‘The Federal Reserve is cutting but must further ease and, most importantly, come into line with other countries/competitors,’ Trump wrote. ‘We are not playing on a level field. Not fair to USA. It is finally time for the Federal Reserve to LEAD. More easing and cutting!’

Meanwhile, just about everyone else is using the word “panic” to describe this move by the Fed.  The following example comes from Zero Hedge

Instead, as it stands “it smells like panic” as more than one Wall Street veteran put it.

Worse, as BMO’s Ian Lyngen puts it, what happened after the Fed’s emergency 50bps rate cut, the biggest since Jerome Kerviel blew up SocGen, “the situation didn’t play out exactly as Powell might have envisioned.

So just how bad is it? Well, as plunging stocks demonstrate, the Fed is this close from losing all credibility…. and since the market has been held up for the past 11 years on nothing but Fed faith – and trillions in Fed liquidity – this could be a very, very big problem.

If you can believe it, even CNBC’s Jim Cramer is saying that this move by the Fed has made him “nervous”

Cramer went on to say that he’d previously been optimistic, despite the recent Dow freefall. But the Fed’s move has caused him to adopt a more cautious posture.

“It makes me feel, wow, the weakness must be much more than I thought,” Cramer said. “And I’ve been trying to be bullish, but I can’t.”

He added, “I’m now nervous. I’m more nervous than I was before.”

The Federal Reserve has almost entirely run out of interest rate ammunition already, and we aren’t even officially in a recession yet.

So what are they going to do once things get really bad?

A reduction in interest rates usually spurs the U.S. economy, but these are not normal times.

Even if interest rates were pushed all the way to the floor, it isn’t going to change the fact that global supply chains are collapsing and a large portion of the population is scared to death of this virus

Lower borrowing costs typically spur more consumers to buy houses, cars and other products, and encourage businesses to purchase more equipment such as factory machines, computers.

But historically low rates can’t address delayed deliveries from China that leave store shelves half-filled and auto manufacturers short of imported parts. They can’t prod shoppers fearful of contracting the virus to visit malls and restaurants. And they can’t bring back throngs of foreign tourists to U.S. hotels and shopping centers, including many from China and other countries now subject to travel bans.

And the problems that we are seeing with global supply chains are expected to continue to get worse in the weeks ahead.  In fact, Harvard Business Review is anticipating that the impact of this virus could peak “in mid-March”…

Reports on how the Covid-19 outbreak is affecting supply chains and disrupting manufacturing operations around the world are increasing daily. But the worst is yet to come. We predict that the peak of the impact of Covid-19 on global supply chains will occur in mid-March, forcing thousands of companies to throttle down or temporarily shut assembly and manufacturing plants in the U.S. and Europe. The most vulnerable companies are those which rely heavily or solely on factories in China for parts and materials. The activity of Chinese manufacturing plants has fallen in the past month and is expected to remain depressed for months.

But what if this virus just continues to explode all over the planet?

When I posted my last article yesterday, the number of confirmed cases outside of China had just surpassed the 10,000 mark.

As I write this, that number is just shy of the 13,000 mark, and by the time most of you read this article it will be even higher.

After interest rates are pushed all the way to the floor, “helicopter money” will be about the only weapon the Fed has left.

Normally, “helicopter money” pushes up stock prices, but in the middle of a horrifying global pandemic people are not going to want stocks.

Instead, there is going to be tremendous demand for food and other essential supplies, and “helicopter money” will just escalate prices to absolutely absurd levels.

Sadly, fear of this virus is already starting to cause this to happen

Would you pay $149 for a two-pack of 12-ounce bottles of Purell? How about a single container of Clorox wipes for $44.25, plus $14.59 shipping?

As the coronavirus spreads and people rush to protect themselves and their families from getting sick, the U.S. is seeing heavy demand for everything from masks to hand sanitizer.

If you use Purell, I hope that you stocked up ahead of time.

There has never been a time like this before in all of American history, and what we have seen so far is just the beginning.

Now that the U.S. is planning to start testing more people, we are being warned that we could see an explosion in the number of confirmed cases in the weeks ahead.

If that happens, there is going to be a tremendous amount of fear.

But now is not a time for fear.  Now is a time to be calm, to think rationally, and to act resolutely.

It is during moments of crisis that we find out who we really are, and hopefully this challenge will bring out the best in all of us.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

The post The Unstoppable Coronavirus vs. The “All-Powerful” Federal Reserve appeared first on The Economic Collapse.

Read More: The Economic Collapse Blog Reprinted & Distributed With Permission



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    • Anonymous

      The Threat Of A Virus is ….. it’s Actual – Numerical _ KILL RATE
      (Cases discovered by TESTS are irrelevent – as 95% will never have symptoms or so mild nobody even notices them)

      So Lets simplify it …. the W.H.O Director as you will see below
      On 28 Feb 2020 -Confirms THAT – IMPORTANT KILL RATE ….OVER TWO MONTHS …..AS…….

      >>> 67 DEATHS IN TOTAL…. WORDLDWIDE – Repeat 67 Deaths Globally
      outside China

      In CHINA ALONE – Regular Common Or Garden SEASONAL FLU – KILLS 88,000 On Average PER YEAR
      - Caronavirus in China – A Tiny >>>3,000
      ………………………………………………..

      BUT – IN “MODELS” – YOU CAN COME UP WITH >>> HILLARIOUS NUMBERS & HEADLINES

      READ FACTS …. LIKE THE ABOVE – TELLS – THE REAL PICTURE – Doesn’t It ??

      Caronavirus is an INSIGNIFICANT IRELEVANCE – The Rest Is Propaganda – FEAR PORN
      ………………………………………………..

      SOME REAL TRUTH, FACTS FROM >>> REAL QUALIFIED EXPERTS – WELL WORTH YOUR TIME
      ………………………………………………….>>>READ ON >>>

      So MILD >>> 95% Of Cases >>> WON’T EVEN NEED TO GO … TO A DOCTOR !!!

      Lets Hear From ….. Dr Craig Dalton is a public health physician and conjoint Associate Professor at the University of Newcastle, Australia.
      He is a former CDC …… Epidemic Intelligence …. Service Officer
      - and runs Flutracking.net one of the largest national surveillance systems …. for influenza-like illness in the world.

      There are many countries with cases that haven’t ….. even detected their ….first cases yet.
      They may have ….thousands of cases…. Before…. the first case is detected.
      - Because …most cases >>>> wont go to a doctor ……

      - In fact ….. most likely >>> 95% >>> are mild
      (allowing for surveillance biases towards more severe cases).

      https://seekingalpha.com/instablog/48606151-craig-dalton/5413058-update-analysts-are-starting-to-understand-coronavirus
      ……………………………………………………………………………………………………
      ANOTHER EXPERT >>> CARONAVIRUS – SO MILD – YOU WOULDN’T… FIND CASES
      >>> WITHOUT ….. MASS TESTING – & LOOKING FOR IT

      Marc Lipsitch, professor of epidemiology >>> at the Harvard T. H. Chan School of Public Health. He noted that Guangdong, a province in China, conducted surveillance
      - testing of 300,000 people in fever clinics
      - to find about 420 positive cases.

      “If you don’t look,>>>> you won’t find cases,” he said.

      https://www.propublica.org/article/cdc-coronavirus-covid-19-test
      ……………………..…..………..……………………………………………………..…………………

      28 February 2020 >>> WHO Director-General’s…. opening remarks

      As of 6am Geneva time this morning, China has reported a total of 78,959 cases of COVID-19 to WHO, including 2791 deaths.

      Outside China, there are now 4351 cases>>>> in 49 countries, >>>>and 67 deaths.

      Our greatest enemy right now ….is not the virus itself. …. It’s >>>> fear & rumours

      https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19—28-february-2020
      …………………………………………….
      REPEAT WORLDWIDE … OUTSIDE CHINA >>> A TINY TINY INSIGNIFICANT NUMBER OF …. TOTAL DEATHS >>> JUST 67

      ….. BEING PREDOMINANTLY – THE USUAL _ THE OLD, – THOSE WITH SERIOUS UNDERLYING MEDICAL CONDITIONS – THE IMMUNO-COMPROMISED – AND THOSE ALREADY NEAR DEATH ANYWAY.
      …………………………………………….
      IN ADDITION FEB 25th
      RECOVERIES – ARE ALREADY SURPASSING ……the total number of …..daily new infections
      for the first time.

      That occurred on February 19th, …. according to Johns Hopkins University tracking, when there were 439 new cases…. and approximately >>>> 1,800 recoveries.

      The trend has continued since then >>> with fewer than 600 new confirmed COVID-19 cases each day >>>> and an even greater number ….of recoveries.

      https://www.statista.com/chart/20943/new-daily-confirmed-covid-19-cases-and-recoveries
      ……………………………………………………………………………………………………….
      YES … It’s A – Cute Pussycat Of A Virus – In VIRAL TERMS (Yes Really) – READ ON >>>>

      Some TRUTH, FACTS & ACTUAL GENUINE USEFUL INFO
      THE TRUTH IS >>> The Caronavirus PlayBook Is Already Written.

      It’s just a repeat of ……the H1N1 Swine Flu (SARS, MERS, BIRD FLU, EBOLA) – They All Run
      The Same – Fake Propaganda Virus Playbook
      And We Are – Just heading into – Chapter 2.

      So How Did SWINE FLU H1N1 PANDEMIC END >>> Well …, At The End Of 18 months of Swine Flu – Fear Porn

      - The World Health Organisation WHO declared …. the pandemic over – & during the >>> 18 months it had killed JUST ..18,500 people globally

      - averaging the figures of lab confirmed deaths – from the 214 countries that report to the W.H.O
      >>>> That averages out at >>>> LESS THAN 90 (as in Ninety) …. Swine Flu Deaths Per Country
      ……………………………………………………………….
      In Hindsight The 18 months of relentless fear porn fake propaganda headlines, >>> were over ……an insignificant, irrelevant virus – Killing On Average …. Just 90 People – PER Country !!
      ………………………………………………
      QUOTE W.H.O OWN WEBSITE
      6 August 2010 – As of 1 August 2010, worldwide… more than 214 countries and overseas territories or communities >>>> have reported laboratory confirmed cases …. of pandemic influenza H1N1 2009, including over >>> 18449 deaths.
      LINK TO W.H.O. OFFICIAL WEBSITE Confirmation Of Above FACT !! >>> https://www.who.int/csr/don/2010_08_06/en/

      And – This CARONAVIRUS >>> Will Be A Repeat.
      ……………………………………..
      Caronavirus Took 2 Months/60 Days To Kill 2,400 (ie a TINY 40 Per Day)

      - of old, sick, frail, immuno-compromised and already on their last legs Chinese

      - Up to 95% of Infected – Have Symptoms – So Mild – They Won’t Even Notice
      - and in most countries – hasn’t even reached a THOUSAND infected

      Regular Annual Flu – Kills 88,000 …Chinese per year

      7 Million Chinese… Die Of All Causes Per Year

      -vs- Caronavirus – UNDER 3,000 !!!

      Read the facts – Engage Brain & Common Sense – It’s an insignificant irrelevance – the rest is Rinse & Repeat VIRAL FEAR PORN
      ……………………………………………………….…
      LETS GET AN OVERALL OPINION FROM EXPERTS – AT THE UK NATIONAL HEALTH SERVICE (PUBLISHED IN A UK NATIONAL NEWSPAPER) – THE INDEPENDENT

      28/Feb/2020 …. QUOTE….
      “As a member of the public….. you might get… coronavirus

      >>> but your chances…. of being ill …. and in hospital >>>>>is not high.

      On a person …. by person basis >>>>>> IT IS NOTHING TO WORRY ABOUT
      (UNQUOTE)

      https://www.independent.co.uk/news/health/coronavirus-uk-deaths-nhs-intensive-care-flu-wise-men-protocol-a9361916.html
      …………………………………………………………………………………
      So – Total Prepping Required – IF you are one of the …very few that do get infected
      - and NOT one of the 90/95% infected that exhibit >>> NO Symptoms

      Or Symptoms >>>> So MILD – You Would’t Even Notice Them …..
      - then…………
      It may be prudent to perhaps – buy a small box ….of paper hankerchiefs/tissues… & Voila …..FULLY PREPPED & Ready

      >>> READ ON
      …………………………………
      LETS GET INITIAL OFFICIAL >>> GOVERNMENT CONFIRMATION ….(Fuller Details Lower Down on THE ACTUAL NUMBERS)

      ………….CANADIAN GOVERNMENT / HEALTH CANADA …………….

      QUOTE “coronaviruses are common …..and are typically associated ….with mild illnesses,
      similar to the common cold. (Unquote)

      QUOTE >>> Those who are infected with COVID-19 may >>>>have little to >>> NO symptoms.

      You may… NOT KNOW ……you have symptoms ….of COVID-19
      because they are similar to …. a COLD or flu. (UNQUOTE)

      https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection/symptoms.html
      (& see Quotes At Bottom)
      …………………………………….…………….
      For the… very few …that do get infected noticeable symptoms, …. typical signs include
      - A RUNNY NOSE
      - A COUGH
      - A SORE THROAT / Fever (high temperature).

      The vast majority of patients – at least 97 per cent, ….. based on available data – will recover from these

      >>>> without any issues ….. or medical help.

      https://www.dailymail.co.uk/health/article-7987001/Death-toll-killer-coronavirus-10-TIMES-higher-average-Chinas-Hubei-province.html
      ………………………………………………….
      Its such a happy clappy insignificant symptoms virus – its about as pleasant as you could make – thank you to God or Whoever
      - A Good Job !

      Lest We Forget ….. Ooooh 53 Suspected Cases Out Of 300 MILLION Americans – That’s ‘erm, well – nicely .… very significantly LESS than a PI$$ In The Ocean too really ….isn’t it

      And Based On How Things Have Gone In CHINA So Far – It A case Of >>>> READ ON
      …………………………………………………………………………………………….

      MOVE ALONG FOLKS – NOTHING TO SEE HERE – ALL OVER – JUST MOVE ALONG – GET ON WITH YOUR LIVES

      CHINA
      Yes 2,400 Died Of Caronavirous in 2 months (60 Days) – An Average >>> Really VERY TINY >> 40 Deaths A Day

      - Seasonal Flu Kills An Average 88,000 Per Year (Caronavirus Has Managed 2,400)

      - 7 MILLION Chinese Die Per Year – Caronavirus Has Accounted For 2,400

      And Studies/Reports State whilst there are only 80,000 Confirmed Infections – There Will be >>> 10X that number

      - YES 3/4 MILLION + with Symptoms SO MILD – they Won’t EVEN NOTICE THEM
      ………………………………………………………………………………………………………………………..
      So Move Along Folks – Everywhere Is Opening Up Again – Just Move Along Folks – It Was Just The Usual Fear PORN – Move Along …CONTINUED

      INTERNATIONAL NEWS CHANEL RT NEWS ….. Evidence …..
      >>>> Propaganda Fatigue ….Setting In

      Already Macau CHINA , the world’s biggest gambling hub, …..will allow casinos to…. resume operations from…. February 20,
      …. after authorities imposed a two-week suspension to curb the coronavirus’ spread, authorities said on Monday,

      Macau has not reported >>> any new cases of the virus>>> since February 4, … officials said (As At 20 Feb)
      .
      There have been >>>> ONLY 10 … confirmed cases of the virus >>> in total there.

      Government services, which had mostly been suspended since the start of February, ….. have gradually resumed operations this week.

      https://www.rt.com/newsline/481005-macau-casinos-virus-fear/

      So Move Along Folks – Move Along – Nothing To see Here – Get On With Life – It’s All Over Folks 2,400 deaths and new cases plummeting -

      DEATHS >> Predominantly Sick, Elderly, Immunocompromised, & usual already on their last legs ….. out of 1.3 BILLION CHINESE
      ………………………………………………………………………………………………………………………..
      NB 10 February 2020 BLOOMBERG

      The new coronavirus might have infected….. at least 500,000 people in Wuhan, ….the Chinese city at the epicenter of the global outbreak, …..by the time it peaks in coming weeks.

      But…… most of those people…..>>>> won’t even know it.

      https://www.bloomberg.com/news/articles/2020-02-08/virus-outbreak-in-wuhan-may-soon-peak-with-more-than-5-infected
      …………………………………………….
      LOS ANGELES TIMES
      Thousands of people in China and elsewhere ….have been infected ….. but have had…

      >>>> such mild reactions that >>>> no one even noticed,

      - said Dr. Tom Inglesby, director of the Center for Health Security at the Johns Hopkins Bloomberg School of Public Health.

      https://www.latimes.com/science/story/2020-01-24/china-coronavirus-panic
      ……………………………………………………………………………………………..
      The UK’s NATIONAL BBC News COMMENTS

      – Re INFECTED – HAVING SUCH MILD REACTIONS >>> NO ONE NOTICED

      >>> FROM THE LARGEST STUDY TO DATE (The paper by the CCDC, released on Monday and published in the Chinese Journal of Epidemiology, looked at more than 44,000 confirmed cases of Covid-19 in China as of 11 February
      ………………………………….
      – So Known Infections Quoted In Study – 72,436 x 10 = 724,000 Who Will Have Had Symptoms – Too Mild – To Notice
      – YES >> ¾ Million
      …………………………………..
      QUOTE >>> Re The Known 72,436 infections

      - Scientists have estimated there could be …..10 times as many people infected ….. as are ending up in the official statistics.

      That ALSO means the….. overall death rate IN THE REST OF CHINA (Outside Hubei) is likely to be
      >>> lower than the 0.4% (rest of China) reported in this study (ie 10X LOWER – Making the death rate potentially ONLY 0.04)

      https://www.bbc.co.uk/news/world-asia-china-51540981
      ……………………………………………………………………..
      So Theres Proof Of Precedence – How This Caronavirus Runs

      So Ignore the PROPAGANDA FEAR PORN – ENGAGE BRAIN PUT COMMON SENSE IN GEAR & JUST PARTY ON

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