Excerpts from 

Scott Minerd's 

April 26, 2020 Thoughts

Here's the original article. Excerpts appearing below are verbatim quotes.

Four years from now the economy will most likely recover to the same level of activity that it was in January.

It took nearly 10 years for the unemployment rate to return to levels we saw before the Global Financial Crisis, and this labor market shock will likely be between three and five times more severe.

Our central bank will never be able to get back to what was viewed as normal prior to April 9. As the nearby charts demonstrate, the Fed’s balance sheet has expanded from $4.5 trillion to $6.6 trillion in just about a month, and it is likely on its way to exceed $9 trillion soon.

The Fed is not alone in this endeavor. As Ed Hyman of Evercore ISI pointed out, G7 central banks collectively purchased in March $1.4 trillion in financial assets. This annual rate of $17 trillion is nearly five times the previous monthly record set in April 2009.

The United States will never be able to return to free market capitalism as we knew it before these policies were put in place.

Eventually, a populist revolt to address the current massive inequality of income and wealth, will happen.

Soon pressure will mount on policymakers to bolster the social safety net and increase things like healthcare and job security and maybe even institute a guaranteed living wage. My only concern is that it will be done in a way that is not productive for long-term growth. These programs will create incentives that will  reduce overall productivity. Instead, policymakers should address fundamental reforms in the economy to restore growth and reduce inequality.

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