Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

4 Reasons for Coronavirus 2021 Hope

Economics / Coronavirus Depression Jan 24, 2021 - 04:05 PM GMT

By: John_Mauldin

Economics

2021 may feel more like an extension of 2020 rather than a fresh start. But take heart—there is plenty of good news out there.

Here are four things to be hopeful about today:

First, we now have weapons against the coronavirus. The US has two approved vaccines. England, China and Russia have developed their own. Additional vaccines are under development and will likely be available later this year.

These will be game-changers if we manage to deploy them widely and quickly. Which, I admit, is a big “if.”


The initial rollout has been slow almost everywhere but Israel and, surprisingly, West Virginia.

West Virginia was the one state that did not use the federal nursing home rollout plan. They ran their own process, showing how this is really a state-by-state problem.

In time, the logistical issues in other places will get solved and people will gain confidence as side effects prove minimal.

Moreover, we will see improvement long before the “herd immunity” threshold. (Experts put that at about 70% of the US, or more than 200 million people who would have to recover from the virus.) Protecting the most vulnerable groups will reduce pressure on hospitals and hopefully let governments lighten business restrictions.

I don’t expect anything like normalcy until the second half of the year, at the earliest, but we should feel a difference sooner.

Second, the recently passed fiscal package will give some relief to unemployed workers and small businesses.

The process was late-night political sausage-making at its worst. It took way too long and I dislike some of it. But had the bill not passed, I think we would certainly be looking at a double-dip recession in early 2021.

With the Democrats controlling the Senate, we will probably see more cash payments, at least an increase to the $2,000 many wanted (adding to the $600 that passed). It will aggravate an already high national debt but should also boost consumer spending, as we saw with similar payments last year.

Plus, if the vaccines do their part, people will be more inclined to spend the next round in the hard-hit restaurant, entertainment and travel sectors.

We are also likely to see a major infrastructure bill as well as additional stimulus. Again, this will blow apart any thought of budget restraint.

Third, 2020 was (of necessity) a year of massive innovation throughout the economy. Businesses forced into an “adapt or die” position worked hard to adapt.

A disturbingly high number didn’t make it. Yelp (YELP) shows that some 98,000 businesses have closed permanently since March.

But many did survive by finding creative ways to operate under new constraints. Those investments having been made, and we can now begin to see the benefits.

I recently talked with Richard Fisher, former president of the Dallas Fed, who is on the PepsiCo (PEP) board. He noted that consumer goods companies like PEP have accelerated innovation, productivity, and brand positioning over the past nine months that would otherwise have taken five or more years.

It is not just consumer goods companies. An enormous amount of innovation has been pulled forward in a wide variety of businesses and industries.

Hundreds of teams of brilliant scientists singularly focused on one problem. The incredible discoveries they are making… and the knowledge that they have developed… will benefit scores of different fields.

We would be in a far worse position right now if not for the hard work of millions, everyone from healthcare professionals to farmers, warehouse and delivery workers, store clerks, and others who risked their health to keep society going.

Add to that list the scientists and entrepreneurs who developed the vaccines that will get us out of this and figured out how to do business in tough conditions.

Fourth, US trade policy should change for the better this year. President Trump’s tariffs—one of his worst mistakes, in my view—won’t disappear instantly.

Those tariffs disproportionately affected the very people the stimulus bills aim to help, and Biden's team is likely to ditch them.

The president-elect says, at least, he will continue taking a hard line against China’s unfair practices. He should. But I think he will be more conscious of minimizing the collateral damage to our own nation.

Look for Biden to return the US to organizations like the WTO. This will be critical as we try to get the world economy back on its feet in 2021.

Note: I am an unapologetic proponent of true free trade. But I also recognize that we need to help workers who are caught in the crossfire.

The benefits of free trade cannot accrue only to a portion of the country. They must be shared widely, even if that means government assistance for some workers for a period of time.

These are just a few reasons to be hopeful about 2021. There are probably many more. Just remember, we only have three hands.

The Great Reset: The Collapse of the Biggest Bubble in History

New York Times best seller and renowned financial expert John Mauldin predicts an unprecedented financial crisis that could be triggered in the next five years. Most investors seem completely unaware of the relentless pressure that’s building right now. Learn more here.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

John Mauldin Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in