THE ULTIMATE PROBLEM:

The Fed can unleash untold trillions into the economy.  They can buy all the bad debt in the entire world.  They can send checks to every citizen.  They can buy stocks to support the stock market.

Here's the problem we face.

All markets are ultimately DEMAND DRIVEN.

No amount of supply can stimulate Demand when people are scared to spend.

That's the problem.

And it's not the virus that's making them afraid.  It's that fact that everybody is starting to realize how fragile our economic system is.  All the wealth is concentrated in the hands of one tenth of one percent of the population.  Everybody else is essentially one crisis away from perdition.

That crisis has come.  And we can all see how tenuous our lives are in this screwed up system - which it neither capitalist nor socialist.  It is a weird hybrid of socialism for the very very rich.

Here's the main idea of this system: The central bank keeps real rates negative creating a flow of funds out of the hands of savers and into the hands of speculators who can never lose because when they do the Central Bank bails them out and lower rates even more.  Until all rates go negative all savers go broke and only the richest speculators continue to reap all the benefits.

What a system.  Ultimately this system is dependent on the good faith of all who are getting screwed by it.  When that good faith is used up, the game ends.  And I'm afraid that's just about where we are.

Who out there can really say they have faith that those running the system can -or even want to - figure out a way to make the system fair in order to re-engender good faith in the populace at large.

That would involve pushing rates back up to 10 or 15 percent so that savers can get a fair return.  But that's impossible with hundreds of trillions of dollars of debt.  The debt service would cause the country to go broke in a second./

So then what?

Sending working families a $1200 check while shoveling 5 trillion dollars to corporations, hedge funds, private equity groups etc just won't get the job done.  The Fed buying all the bad debt of the largest corporations while giving home owners a one month grace period on their mortgage just won't get the job done.

And everybody is starting to realize that.

It's hard to know what this will all look like in a couple of years.  But one thing is for damn sure: the more your wealth is outside the system in the form of hard assets with intrinsic value - things that have NO COUNTER-PARTY RISK - and things that can't be inflated away by the central government - the better off you'll be.