E We Are Trapped In A Phase Of Major Unknowns

The latest IMF projections paint a more realistic picture of the outlook. The IMF expects the US economy to shrink 8% this year and to rebound 4.8% in 2021. This projection is neither rosy, nor a soft landing, though it is also consistent with seeming rapid economic rebounds in Q3 and Q4. 

In other words, do not be misled by the seemingly steep US economic growth rates in Q3 and Q4. The reality is that the US economy will remain in a very weakened state next year. 

Equity markets, which are incredibly volatile, seem to this writer as being too strong given the uncertainty and the weakness associated with the future economic recovery.

Equity markets are responding to zero interest rates and low inflation, not to a strong economic rebound.  

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Arthur Donner 3 months ago Author's comment

I beg to differ. The risk we face is deflation, not inflation.

William K. 3 months ago Member's comment

Certainly all of the markets will take a lot to recover, and the fed pumping lots of money in can not help but fuel inflation, which is the enemy of value.

It does not matter how good the intentions are, making the wrong moves will cause damage. And printing money by the train[load is certainly a wrong move for most folks.

Diluting the value of what wealth I have works to destroy the value of what each dollar can purchase, and thus it does not deliver any benefit to me. Why is that so hard for some to see??? Runaway inflation does not benefit most people at all, quite the opposite.