(Wednesday, May 6, 2020, 12 p.m. EST) Last Thursday, Fritz Meyer gave me a seven-minute update on the new inflation data, and it blossomed into the video below about the Paycheck Protection Program for business owners.
This video addresses business owners who have not applied for PPP. These are entrepreneurs who probably never applied for government aid before and may be reluctant to do so now, even though they legitimately qualify and need it.
It's important for business owners to know that the flood of U.S. Government largess in response to the public health crisis – the $2.2 trillion CARES Act, hikes in unemployment compensation payments and expansion of food stamps – is financed with cheap money.
Federal aid programs won’t add much to the long-term debt because the U.S. is borrowing at rates near zero and inflation, too, is almost nil. Which brings us Worldwide demographic trends are depressing U.S. Treasury Bond rates!
Fritz Meyer has documented the chain of events that create current economic conditions. A shrinking working-age population across Europe is the first link of the chain.
The central bank of Germany, the world’s second-largest sovereign debt issuer after the U.S., has dropped interest rates into negative territory to stimulate GDP growth. Germany’s action triggered lower yields on long-term U.S. bonds in the worldwide bond market. As a result, mutual funds, packaged products, pension plans and other institutional investors across the globe, are seeking safe income on behalf of aging populations across the developed world, flooding money into U.S. Treasury bonds and depressing yields in the U.S.
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