What if All Hell Breaks Loose?

Andy Snyder|November 30, 2021

What if?

It’s the question on the minds of many Americans and investors these days… especially after last week’s nervous trading.

It’s a question we asked ourselves this morning – but not about investing.

This was much more about life and death.

We took a load of sheep to the butcher.

We got up hours before the sun and went over our checklist. Moving animals from one end of the county to the other can lead to all sorts of problems.

Flat tires… wayward trailers… injured sheep… or, the worst case, sheep on the run.

We’ve got tools for every job and every piece of trouble – including the tool of last resort… the one that goes boom.

While we’re proud we’ve never had to do it, many animals die on their way to the slaughterhouse.

It’s a waste. They can’t be sold. But often, it’s the most humane solution.

Shooting the Economy

In the world of money and economics, our keepers don’t have such an option. Or at least they’re too afraid to use it.

They’d rather us deal with the pain and suffering… and the limping through the countryside, wondering what in the hell just happened.

The idea has a lot of us pragmatic-leaning folks wondering “what if.” And more, we’re wondering what tools the folks in charge have left to use… and are willing to unholster.

Last Friday’s omicron panic is a fine example.

What if the pandemic comes roaring back with a new, nastier variant? This latest newsmaker may not be it, but what’s next?

With interest rates at zero and the Fed still rapidly expanding its balance sheet with bond- and mortgage-buying, how would it keep things running if a sudden slowdown hit?

What if it has to do even more?

Or what if the pent-up consumer demand we’re seeing peters out? What if the spending spree created by holding back for a year ends just as quickly as it started?

A recession would be certain.

Or, dare we jinx things, what if a black swan comes flying overhead… a war, an attack, a cyber failure? Any of them would give us a world of trouble…

The kind of trouble that requires a big tool to fix.

But what’s left?

More of the Same

We’ve already stirred massive inflation with our money printing. We’ve already juiced the markets with trillions in stimulus. The only thing left to do is quite scary…

And that’s more of the same.

If you’ve been paying attention, you know we’re betting on negative interest rates.

When trouble brews, the Fed will find an excuse to do the unthinkable. It will send key rates on the world’s reserve currency below zero. It’ll be like giving a heroin junky a stiff shot of Narcan.

He’ll wake up and survive… but he’ll be looking for his next fix by the time he’s back on his feet.

The people are primed. Once unimaginable, the folks working the system would merely have to say a few magic words on social media to get the nation to blindly follow.

It’s like feeding a handful of corn to our sheep. We’ve been teasing them with the stuff for months… all with the plan to use a dish of it to lead them into the trailer and off to the slaughterhouse.

It’s our most powerful tool.

Are we worried about the omicron variant? Do we think it’s going to kill us all?

Nah. So far, it looks like more headline hype drummed up during a slow news cycle.

But we are thinking about what will come next. We are pondering the “what ifs.”

It’s not a fun exercise. But it helps us plan ahead.

The folks in charge don’t have the guts to end the suffering humanely. So they’ll keep doing what they’ve been doing… only on an even larger and more dangerous scale.

That means selling based on fear is dangerous. The last decade has proven that notion many times over.

If the hype-filled headlines do anything… they’ll push us to Dow 100K faster than anybody ever expected.

Our “what ifs” might turn into “how highs.”

Just watch over the next year and you’ll see what we mean.

Note: If you want a full historical view of how we got here and why we’re convinced negative rates are coming, click here. We detail it all as we explain why it all means the death of cash is near.