{"id":52034,"date":"2020-03-30T13:20:34","date_gmt":"2020-03-30T18:20:34","guid":{"rendered":"https:\/\/olduvai.ca\/?p=52034"},"modified":"2020-03-30T13:20:40","modified_gmt":"2020-03-30T18:20:40","slug":"what-will-be-the-unintended-consequences-of-printing-trillions-of-dollars-to-backstop-the-entire-system","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=52034","title":{"rendered":"What Will Be the Unintended Consequences of Printing Trillions of Dollars to Backstop the Entire System?"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.zerohedge.com\/news\/2020-03-30\/what-will-be-unintended-consequences-printing-trillions-dollars-backstop-entire\">What Will Be the Unintended Consequences of Printing Trillions of Dollars to Backstop the Entire System?<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Stocks are up somewhat this morning.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This marks the second Monday stocks will open in the green (last Monday was a green open as well) following two horrifically bad weekend sessions that saw stocks open limit down or close to limit down (March 2<sup>nd<\/sup>&nbsp;and 9<sup>th<\/sup>).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the simplest of terms, the panic in the markets appears to be abating. It is clear stocks have broken the downtrend from the panic (blue lines). What is&nbsp;<em>not<\/em>&nbsp;clear is whether this rally will continue or not.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Stocks stalled out under resistance (red line) last week. A break above that line would open the door to a run to 3,000.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.zerohedge.com\/s3\/files\/inline-images\/GPC330201.png?itok=bcqdo3MU\"><img decoding=\"async\" src=\"https:\/\/zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com\/s3fs-public\/inline-images\/GPC330201.png\" alt=\"\"\/><\/a><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">At the end of the day, stocks are actually a minor player in this mess.&nbsp;<strong>T<\/strong><strong>he BIG story is what happens with the bond markets.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Going into last week, it was clear the financial system was facing a debt crisis. Across the board everything from corporate bonds to municipal bonds were breaking down in a catastrophic fashion.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.zerohedge.com\/s3\/files\/inline-images\/GPC330202.png?itok=0Q2KtHnF\"><img decoding=\"async\" src=\"https:\/\/zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com\/s3fs-public\/inline-images\/GPC330202.png\" alt=\"\"\/><\/a><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The Fed managed to stop this massacre by announcing it would backstop&nbsp;<strong>everything<\/strong>.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The question now is whether that will be enough. Bonds have staged a major bounce in the last five days, but what happens if they turn down again?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Will the Fed\u2019s announcement that it intends to buy corporate bonds be enough to stop the $10 trillion corporate bond bubble from imploding?&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What about the $16-$19 trillion commercial real estate market? Will the shutdown, which has closed so many restaurants and retailers, result in a crisis in this market as businesses begin skipping monthly payments or breaking contracts outright?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And what about the $23 trillion U.S. treasury bubble? Will the $2 trillion in stimulus, which both the President and the Democrats have suggested will be the first of several, be what finally pushes the U.S.\u2019s debt loads into a crisis?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What Will Be the Unintended Consequences of Printing Trillions of Dollars to Backstop the Entire System? Stocks are up somewhat this morning. This marks the second Monday stocks will open in the green (last Monday was a green open as well) following two horrifically bad weekend sessions that saw stocks open limit down or close [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,23707,14917,661,662],"class_list":["post-52034","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-graham-summers","tag-phoenix-capital","tag-qe","tag-quantitative-easing"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=52034"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52034\/revisions"}],"predecessor-version":[{"id":52036,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52034\/revisions\/52036"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=52034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=52034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=52034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}