COVID costs of $5.2 trillion are colossal, exceeding the costs of World War II. Watch our 3/23/21 live broadcast at https://www.youtube.com/watch?v=A2Wy3YFr_VQ

1. Monetizing the Colossal Costs of COVID-19
The Baby Boomer Investing Show on Tuesday 3/23/2021: BabyBoomerInvesting.Show
$5.2 Trillion

2. $5.2 Trillion
https://www.youtube.com/watch?v=A2Wy3YFr_VQ

3. Perspectives
0
2
4
6
8
10
12
14
$Trillions of New Money Compared to Spending on Wars
New Money Costs of Wars
5.2 9.7 12 4.7 9.9 12
COVID
COVID
+
QE
COVID + QE + Infrastructure
WWII
WWII
+Since
2001
13 Biggest

4. Coronavirus Aid, Relief,
and Economic Security
(CARES) Act
Consolidated
Appropriations
American
Rescue Plan
Source: USA Today
COVID Relief Costs
$5.2 Trillion
More than all our wars since 2001
combined.
And more than our most expensive
war. WWII cost $4.7 trillion

5. $1 Trillion
Unemployment
, 885
Vaccine, 440
Schools, 440
Business,
226
Obamacare, 135 Landlords & Renters, 95
$4.2 Trillion
Where the $5.2 Trillion
Has Gone
$1.7 Trillion
Indirect
Source: USA Today
Source: The Baby Boomer Investing Show
Collected from various sources
$4.2 $Trillion
(In $Billions)

6. 35% Pork in the $1.9 Trillion American Rescue Plan
1. $85 billion for the rescue of about 180 multi-employer pensions plans insured by the
Pension/Benefit Guaranty Corp (HR 397 Butch Lewis Act for $672 billion in 1400 plans) .
2. $30 billion for public transit agencies
3. $350 billion largely to blue state and local governments that imposed strict lockdowns
4. $35 billion to subsidies to defray Obamacare premiums
5. $40 billion in addition to the already provided $113 billion for schools that is largely
unspent
6. $50 billion for the Federal Emergency Management Agency
7. $15 billion to assist states in expanding Medicaid to lower income adults
8. $39 billion for child care
9. $10 billion for mortgage assistance
10. $1.5 billion to Amtrak
11. $1.0 billion to world food relief
12. $3.5 billion for food stamps
13. $4 billion to socially disadvantaged farmers
And there are also the special pork in the Democrat’s bill for such things as:
• $500 million to fund the arts, humanities, libraries, and museums
• $100 million to fund a tunnel in California outside San Francisco
• $1.5 million to fund the Seaway International bridge connecting NY and Canada
• The $15 per hour minimum wage that the CBO says will place 1.4 million workers out of
jobs.
Source: Aiken Standard
$.7 T

7. The World is
Spending Big on
COVID.
US will spend $5.2
Trillion, which is
25% of GDP.
And it gets worse
Moral Imperative or Moral Hazard?

8. Heightened Inflation Risk

9. Printing Money: Modern Monetary Theory
Treasury
Federal
Reserve
Federal Reserve buys most of Treasury borrowing Inflation follows the money

10. Recession
Inflation
COVID Relief
Quantitative
Easing

11. Helicopter Money “Rescues”
the economy and stock market
but…
The total cost of our 13 most
expensive wars is $10 trillion
• Wealth concentration
• Limited bank lending
• Aging population
• Technology advances
• Abundance (e.g. Energy)
• Outsourcing $4
$9
$11
Where & when will the scales tip?
$Trillions
Source: Target Date Solutions
Money Printing and Inflation
Demand-pull

12. Baby Boomers Will Cause
Inflation
This original and panoramic book proposes that the
underlying forces of demography and globalisation will
shortly reverse three multi-decade global trends – it will
raise inflation and interest rates, but lead to a pullback
in inequality.
Wage inflation will be the driver:
Cost-push inflation
(Hat tip to Larry Siegel)

13. Protect Against
Hyperinflation
• Don’t retire
• Precious metals, especially Gold
• Cryptocurrencies like Bitcoin (S2, E7)
• TIPS: Treasury Inflation-Protected Securities
• Inflation hedged stocks like materials & staples
• Commodities, including energy & food
• Some real estate, like farmland
• Some foreign stocks
$4 Trillion QE + $5 (?) COVID Relief + $2 (?) Infrastructure
= $11 Trillion
MMT
Warning: Cash could become Trash
$11 Trillion new money is half of our
$22 Trillion Economy

14. Global Stock Market Crash
Rampant Inflation
Be Prepared: 60/40 is Stupid
• There are bubbles in stock and bond markets
• Bubbles always burst
• There are several “pins” that could burst the stock market bubble
• We think the pin will be rising interest rates
• The stock markets will crash
• We will have serious inflation

15. Buffett Bubble Barometer
-30
20
70
120
170
220
January March Mar-21 Normal
275% of Normal
Season 1
Episode 15
Value of Stock Market / GDP
180%
120%
220%
80%
Source: Target Date Solutions
120%
180%
220%
US Stock Market
75% from 3/20/20 – 3/16/21

16. Rising Interest
Rates Cause
Disaster
When ZIRP (Zero Interest Rate Policy) ends
Article: “What’s the Fuss in Returning to
Normalcy”
Inflation
Increased
Bond Yields
Decreased
Stock Values

17. 110 Year History of 10-yr US Government
Bond Yields: 1912-2021
Source: Trading Economics
https://tradingeconomics.com/united-states/government-bond-yield

18. Tumbling the House of
Cards Built on ZIRP & MMT
When interest rates rise, as they will, the whole
house of cards collapses.
• Stock prices plunge because future earnings
are discounted at higher rates. The pin that
bursts the bubble.
• Interest payments on the debt take away from
other government programs, like welfare and
military. Worry about Social Security &
Medicare.
• Inflation escalates as even more money is
printed to monetize the debt: The “Debt
Spiral.”

19. • When? The more time that passes with
increasing prices, the greater the
probability of a stock market crash. Harry
Dent has pinpointed the crash to April,
2021, and sees it lasting a decade.
• How bad? Probably greater than 50%. A
loss of only 20% would be surprisingly low.
• How about inflation? 20% or more.
Stagflation is likely.
When will the stock market bubble burst?
How bad will it be?
How about inflation?
78 million baby boomers could simultaneously be irreparably harmed

20. A Hustle? Trick the US Into Printing a Lot of Money.
• The “Mark” in this con is the United States, specifically members of
Congress. The “Grifter” is China that is caught in the Thucydides’
Trap, and seeks to be number one. And the “Shills” are U.S citizens,
who mostly support big spending.
• The stages of the con progress as follows:
1) Foundation: Congressional members are greedy and mostly focused
on getting re-elected. Voters want free stuff like healthcare and
education and relief checks.
2) Approach: Create a “theory” that liberates spending from a budget.
Money printing is justified by “Modern Monetary Theory” (MMT) –
print all you want.
3) Build-up: Following Japan’s lead, the US launches Quantitative Easing
(QE) in 2008 to head off a recession, printing about $4 trillion.
4) Pay-off or convincer: QE works!! The recession ends quickly, the stock
market enjoys its longest recovery and inflation is subdued.
5) The "hurrah": A sudden manufactured crisis or change of events forces
the victim to act or decide immediately. The COVID pandemic breaks
out, originating in China.
6) The sting: Congress approves another $5 trillion in COVID relief plus
President Biden plans to spend at least another $2 trillion on
infrastructure and other projects. So, $11 trillion in new money
(counting QE), which may be enough to bring hyperinflation.

21. Good news?
Bonds will
pay interest.
ZIRP ends

22. Next Show is on April 6:
https://babyboomerinvesting.show/live-shows
Kerry Pechter on Annuities & Guaranteed Payouts

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