We're Already Talking About a Fourth Stimulus

Written by Jason Simpkins
Posted April 2, 2020

Quantitative easing, checks for every American, expanded unemployment, small business loans, and a grand total $2.2 trillion in deficit spending...

Hasn't been enough, apparently.

Donald Trump, facing an election year crisis like none ever seen before, now thinks it's time for that infrastructure bill he's been promising for four years.

“With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill,” he tweeted. "It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country! Phase 4.”

He's got bipartisan backing.

House Democrats have already outlined a sprawling infrastructure proposal, and they're eager to see it implemented.

The plan, based on a five-year, $760 billion framework unveiled in January, includes money for community health centers, improvements to drinking water systems, expanded access to broadband, and upgrades to roads, bridges, railroads and public transit agencies.

“We need to invest in our infrastructure to address some of the critical impacts and vulnerabilities in America that had been laid bare by the coronavirus,” said House Speaker Nancy Pelosi.

The largest part of the bill, $329 billion, would go towards highways and roads. Another $105 billion would go toward public transportation, $55 billion to rail, and $50.5 billion on clean water and wastewater infrastructure.

Of course, other Republicans aren't as enthusiastic about greenlighting Democratic priorities. 

They want something else - namely more tax relief.

Indeed, this fourth package would give senators a chance to push for “the things that Republicans want that Pelosi is saying no to now," one Republican aide told The Hill. "At some point we will have to provide business relief. We will have to provide relief to airlines.”

No doubt.

I'm certain, at the end of the day both parties will have had considerable time at the trough to enrich themselves and their constituents. 

But all of it, ultimately, will come at the expense of the tax-payer.

Today, the total amount owed by the federal government is about to top $25 trillion, compared to a $20 trillion economy that could shed a third of its value in the second quarter.

Who's going to buy all of this debt?

Well the Fed will take a huge portion.

Our central bank is expected to inhale three-quarters of the Treasuries offered up to pay for all of this spending - gobbling up an "unlimited" amount of bonds.

Where does the Fed get it's money?

It generates it out of thin air.

Only the U.S. Treasury can print money, but the Fed creates digital dollar credits that are as good as cash. So it's basically a digital press instead of a physical one. And yet the end result is the same - a reduction in purchasing power.

And that's not all.

Later on down the road, the bill for all of this spending will eventually come due in the form of higher taxes or reductions in entitlements like Social Security and Medicare.

Again, we're set to tack on $5 trillion in additional debt in just a matter of weeks. With our GDP set to sharply contract our debt-to-GDP ratio could soar as high as 150-200% in a matter of months.

And we don't even know when this whole thing will end. 

How long will we all be under house arrest? How long will small businesses have to stay closed? How long will people be left out of work?

How much more money will be needed if this pandemic goes on for months?

That's why investors need to strongly consider wealth preservation. 

And gold is the only way to truly accomplish that. 

The Fed and the Treasury can't print more gold no matter how bad the crisis gets. 

That's why gold is on its way to $2,000 per ounce.

It's also why I'd strongly recommend you check out Gerardo Del Real's latest report on gold-buying.

The editor of Junior Mining Monthly explains a market loophole investors can exploit - so-called "Tier 2 Gold."

This market loophole lets investors buy Tier 2 Gold for as little as $23, $15, or even $12 per ounce.

That makes it an invaluable resource for people who want to protect their money. 

So check it out here.

Fight on,

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Jason Simpkins

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Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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