09/12/2026
I said it in 2020 and in the years that followed, that the price to pay for the mismanagement of Covid would eventually catch up to us, and be a burden that could last several years.
We shutdown businesses, some of which went bankrupt, and printed so much money that it would cause every commodity including housing to have a new baseline, and when we saw wages rise too quickly, I knew then that inflation was here to stay because when you raise someone’s paycheck, you can’t go lower later.
And that 401k and stocks? When all that money was printed, it destined the market to rise because at some point, the prices would need to catch up to the new baseline. You can’t print that much money and not feel it later, and the government couldn’t do as it’s done in the past, using treasury bond sales to reduce the currency. Stocks have caught up and housing prices have finally met their stalled pricing and with the level of employment now equalized (a job for every unemployed), we are at the top of that long climb to the top of the rollercoaster, click click click click, and now the quiet before the drop.
Why now? The government kicked the can as long as it could. For the years that followed the Covid debacle, foreclosures were stayed and in 2021 and 22 when the Fed should have risen the rates, they held them too low, and with the shortage of housing inventory, it was the perfect drug addiction that the economy could not let go, and that would be the ideal disguise to cover what was brewing all along underneath.
The price to pay for Covid has only begun, as this burden will last for several years. We are on the front doorstep of a recession that will last longer than most. In the past we have “spent our way” out of it or lowered the rates to generate activity, but since we have overused both the monetary and fiscal manipulation tactics of the past, what lies before us, especially with regards to how we recover as an economy is unprecedented.
Buckle up, It’s going to be a long road ahead and you can thank the mishandling of Covid and the weakness of our society with how they all fell into line and trusted the government.