It's clear that COVID-19 is going to make for a tough winter. But for the first time, a clear end to the pandemic is in sight. Both Pfizer (NYSE: PFE) and Moderna (Nasdaq: MRNA) announced that they have created vaccines that are more than 90% effective. There were no guarantees that an effective vaccine was going to happen - so those are exciting results. By the third quarter of next year, experts believe that we will have, for the most part, put COVID-19 behind us. I can't wait. But as investors, we need to start positioning ourselves for a post-pandemic world... Historic Consequences When COVID-19 broke out in the United States, the government responded in a big way to try to rescue the economy. It had to be done. The economic shock from closing our economy was unlike anything we had ever seen before. The result is that in 2020, the U.S. federal deficit will exceed $3 trillion. That is more than double the previous record deficit hit in 2009 during the financial crisis. And as I recently wrote, interest rates have been pushed down to 5,000-year lows... The Federal Reserve's balance sheet has ballooned from $4 trillion at the start of the year to $7.2 trillion in just a few months. We have added 100 years of debt in half a year. An incredible 21% of all U.S. dollars ever printed will have been printed in 2020! They must have worn out the printing press... The government has thrown everything and the kitchen sink at the economy to try to minimize the damage from COVID-19. But as with all powerful treatments, this market medicine has some serious side effects... |
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