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Global Pandemic poses Health Risk but Wallet Risk Too

First day of lockdown in NZ (26 Mar 2020), and I am now working from home.
We wake up to a new normal where not only is our health at risk but it seems our wallets too.

As our country enters into isolation, we today have a unique first in history opportunity to make every free minute count. And we are blessed now to have a bit of extra time as more businesses start to work remotely.
I feel this is wonderful time to educate ourselves about global events, and educate ourselves financially.
And an even better time to keep communications globally at real time, so here is my contribution, a tiny blog.

As of this morning, The US Federal Reserve (which is a private company and nothing Federal about it) is bailing out private wealthy investors who made bad bets in stock market, all paid by tax payers.
This is a first in history. This will have a flow on effect globally as the US SMP500 and US dollar is a pivotal player in the market.

In New Zealand and around the globe, we have previously seen and are currently seeing corporations seeking government bailouts due to COVD-19. In New Zealand where I live, it is especially so, as we see bail outs in the airline and tourism sectors. But this free helicopter money comes at a cost. As it ain't free.
The Government will need to take out loans. If they have loans to service, the only way Governments can collect excess is via tax. Increased Tax.

There's also the 'Knight in Shining Armour' promise of bailing citizens out too, by Universal Basic Income.
But that is only going to devalue our currency in effect escalating an aggressive inflation curve. Asset Holidays such as Mortgage free payments, come at a cost as the interest will remain accruing daily. So it's all a numbers trick, beware.

I myself am invested in retirement, Index and Single Stock Funds, but my amount is modest working mans level. The rate of return as of 26th March 2020 shows on average -30points (some stocks going below their original IPOS or lower than 2008 WFC), but I see no bailouts for my bets do I? No the Federal stimulus instead will only be bailing out the wealthiest, invested in stocks that everyday people cannot enter.

Now, I am no financial adviser, I am just a working man running a blog, so please do not take this as Financial Advise. All I can say is please remain vigilant, we are being told to focus on our bubble to reduce the risk of COVD-19, but as history shows, in testing times, some are taking the ride for their own self advancement.

Ralphe.co.nz



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