Kristalina Georgieva, Managing Director of the IMF, gave a speech on June 3, 2020 to the World Economic Forum titled “The Great Reset”. First, she lamented that 170 countries’ economies would shrink this year as debt, deficits and unemployment exploded “And there is a very high risk of more inequality and more poverty.” Her solution, more debt which she says will stimulate growth.
But the world has more than doubled the level of debt since 2008 and was entering a new recession before the coronavirus was used to shut down the global economy. Additionally, income and wealth inequality and grown substantially with those on the bottom bearing the brunt of the health and wealth crisis.
In a business as usual way, the Federal Reserves and Governments response has sped money to the top and dribbled money to the bottom. With more than 40 million now unemployed, almost one-third of unemployment benefits have not yet been paid. How are these people supposed to survive? Further, studies have shown that the black population has suffered the worst during this pandemic and shutdown. Nerves are raw and the tinder is dry.
George Floyd’s death at the hands of police has sparked a global fire and it appears that the global protests that were quashed by the coronavirus are back with a vengeance.
Will this put a halt to the tentative reopening? Will this cause a spike in new coronavirus cases? Will this justify more aggressive military action by governments? Will this rationalize MMT?
Desperate governments and desperate central bankers do desperate things. Physical gold and physical silver, out of the system is the proven protector of wealth. Will they allow you to hold them? And if so, will the form of the gold matter again, like it did in 1933?
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