FEDERAL OFFICIALS SEE “CHOPPY” ECONOMIC FUTURE

This year already has seen investment-grade debt lose $800 billion in value and corporations default on loans worth $55 billion – a faster slide than during the Great Recession and “a wave of insolvencies is possible,” said Lail Brainard, one of the U.S. Federal Reserve’s five governors, in a speech last week.
She advocated making the Fed’s credit facilities as widely available as possible to keep companies solvent and workers employed.
“The state of the economy begins and ends right now” with whether the COVID virus is controlled and a vaccine is developed, said Patrick Harker, president of the Federal Reserve Bank of Philadelphia, on 15 July.
The shape of the recovery is not a U, he added, but “a swoosh written with a very shaky hand.” He expects the recovery to be “choppy” and unemployment to hover above 10 percent for the rest of the year.
He also expects that the Fed’s policies of ready cash for markets and near-zero interest rates will not change.
Citing businesses and unemployed people burning through working capital and savings, cities using up their rainy-day funds, and governments plunging into debt to rescue the economy, Sean Casten, a member of Congress from the Chicago suburbs, warned that the current “massive economic downturn” will bring a political “reckoning” for officials who failed to help those in need.
The Fed has been lavishing trillions of dollars on megabanks and corporations since last September but has done little to help struggling individuals, noted Pam Martens and Russ Martens of Wall Street on Parade on 15 July.
“We have to wonder if the CARES Act fiscal stimulus was just another way to ‘foam the runways’ for banks so they don’t have to deal with too many foreclosures hitting them at one time,” they wrote.
TREND FORECAST: As we have made clear with the facts, the economy is being artificially propped up, and those who know the reality and have the courage to speak the truth are now suggesting, in part,  what we had forecast when politicians began shutting down the economy: “The Greatest Depression” has begun.