So we've got a channel member with a comment here about stimulus checks and I think it's a brilliant topic that we should discuss the potential of steamy checks coming back to. America Let's Analyze This Garrett Purrington says if we hit a hard recession with this Administration referring to the Biden Administration between now and 2024, they will simply give more handouts one way or another. Pushing inflation, the push-pull in 10 years prices will be skyrocketing. So let's try to break this down and analyze if and how stimulus checks could make it back to the United States And boy, Stemi checks would be another fun session of video topics that we haven't got to talk about in quite a while.

So let's talk about the potential of semi-checks now. I Think the easiest way to do it is draw it out. So let's do it together first: I Think in order to expect stimulus of any kind, we would have to have massive pain and massive job loss now. Elizabeth Warren Is already expecting somewhere around 3 million job losses, and the way she accomplishes that is by saying if the unemployment rate today is 3.5 percent and the FED thinks it'll go to 4.5 percent the FED then the reality is: once the unemployment rate goes up one percent, history suggests the unemployment rate will go up another percent.

So history suggests we're gonna go here since we've got just over 150 million people working in America History suggests we should have about 3 million job losses at the same time. Economic forecasts are really calling for a recession or a negative GDP growth sometime in Q3 Q4 right around the holidays. Uh, and so call it a holiday recession. see: Christmas Sweater Holiday recession.

It's almost like I Wore this by Design So what could potentially the impact of a holiday recession be? Well, first of all, if we're in a recession, if we actually hit a recession usually and historically that, that doesn't mean that it will happen this time. But usually and historically the stock market bottoms at the start of a recession. So if the stock market bottoms at the start of a recession and the recession hasn't technically started yet, then pain in the stock market could still be ahead of us. So the stock market usually bottoms at the start of recession.

The only way to really then historically suggest that the stock market hasn't hit it bottom yet or has already hit bottom. rather, would be to say that there's no recession. Which is possible that there's not a recession. But for the purposes of arguing stimulus checks, let's assume the stock market hits a new bottom.

At the same time, we get mass joblessness. That is a a sudden wave of 3 million jobless, uh, individuals. And that joblessness creates a jobless spiral. Jobless spiral.

This is I Think where the government would want to intervene because remember the velocity of money when one person spends five dollars at a hot dog stand. The person who takes that five dollars then goes and spends that five dollars on an employee to help them at the hot dog stand. That employee then spends their wages on goods and services, car cleanings, a muffler for their car, radar detector for their car I Don't know, whatever they want, food, basic necessities, laundry, whatever, and you have this circulation through the economy and modern economic thoughts suggests that when somebody spends money, it usually circulates through the economy about four to five times. But if three million people have less money to actually spend on goods and services, then you could actually take away four to five times as much money.

Which would basically means if three million people don't have income, you could see the impact of what could be as much as 12 million people without jobs because of the Velocity of Money amplification effect. Now, obviously there are Employment Insurance programs and this is actually where I Think the government could stop a jobless spiral because if 12 million people were out of work, then earnings that companies are going to plummet, then they're going to hire less people. And then you get the spiral. Less earnings.

They fire more people. They then hire less people, right? So they hire less people. They fire more people, so more people permanently unemployed in the cycle, less people spending money leads to less hiring and you basically just have a depressionary spiral. Well, the Keynesian Economic thought, which is one that our government and Federal Reserve like to follow, is that well, if times are tough, we should stimulate the economy.

So how might they do that to stop a jobless spiral? Well, there are a few ways they might do that. The easiest way to think about this is first: how are they likely to uh, continue uh, supporting an anti-jobless spiral regime? Well first we know this with certainty already. we expect they would amplify uh, the debt ceiling. It seems like when I type today this uh, this HDMI connector is just trash I bought a new cable so I'll fix this for next time.

but uh, let's go back here. So the first thing they might do is amplify the death ceiling which is basically saying they'll raise the debt ceiling right? Once you raise the debt ceiling, what can you then continue to do Well, you could continue to spend on chip related Investments Why would you continue to spend on chip related Investments via the chips act where you could basically just and you don't even need Congress to do this. Remember this, You could literally have the Biden Administration just read the law of the chip sack where they've agreed to you know, 80 plus billion dollars in spending in chip manufacturing and they could just Loosely interpret it to where all of a sudden instead of spending 80 billion dollars, they're actually spending 240 billion dollars. Yes, a 3X is possible.

That's what Goldman Sachs said in a piece. We covered just three days ago. where Goldman Sax thinks that institutional stimulus check spending could actually be three times as expensive as previously thought because of the way the Biden Administration is interpreting it. So what if they just interpret it so loosely that it's actually a four or five times investment? Well, now what you're doing is you're creating jobs by going into more debt.

That's likely to happen in Chips. It's likely to happen in EV It's likely to happen in solar, hydro, and other scientific based uh based in my opinion Investments that the Biden Administration can justify under acts that have already been passed. So I Think the debt ceiling gets raised hands down If we're knocking on a door of recession, that then enables the government to spend more money on programs that they've already passed without the help of a bipartisan Congress Another thing that could potentially happen and we don't know this is you could potentially good. Lord You could potentially have a bipartisan effort on expanding unemployment Protections In the event that you have an unemployment crisis now, these unemployment benefits would probably be conjoined with some kind of demand that individuals work.

I Don't believe that Congress is going to go back to the days of here's massive Uh. unemployment Compensation for no work I Think there will probably be a look for work requirements if Congress were to expand in a bipartisan way. unemployment protections. but I think this would probably be the biggest stimulative uh effect that Congress would have uh on the economy is not only the Biden Administration in their own way basically increasing stimulus checks that have already been written.

Remember what? Goldman Sachs said they said, hey, we've got about 390 billion dollars in stimulus checks that'll probably end up costing around 1.2 trillion dollars because the Biden Administration is just going to Loosely interpret those rules. But I actually do think that Congress could in a bipartisan way increase unemployment compensation stimulus checks as long as people agree that they're looking for work. I Think that's how you can get a pretty divided Congress right now Democrats and Republicans on the same page and actually printing money again supporting massive unemployment checks for people who've been laid off especially in dare I say the tax sector. I Think there's a chance you're going to see a high level of tech unemployment and that's going to lead to higher unemployment checks to make sure people who basically funded so frustrating who basically funded a very expensive lifestyle I Feel like I'm taking a Nintendo switch here I've got expensive HDMI Cables expensive Apple Dongles.

but no, oh, don't you just love seeing Kevin blow anyway? So I There's this chance that you have the tech sector that has an expensive, much more expensive lifestyle right? More expensive cars, more expensive apartments or whatever that actually ends up fueling calls for higher unemployment checks because they are now unemployed and regular unemployment won't help them pay the bills they signed up for under salaries that they used to be used to because of unemployment caps. Basically, so, there is the potential that you see stimulus checks come back in the form of higher unemployment compensation as long as to appease. Republicans There's a look for work requirement that's potent. That's a potential.

Now, what about straight up just stimmy checks? Is it possible stimi checks? Is it possible that the Federal, Reserve and Congress issue stemi checks? Well, first you have to ask: would the FED print more money in the event, uh of a painful recessionary Dynamic that lasts long? So in Long recession, right? So let's say Q3 Q4 we go into recession and by Q1 2024, we're still in recession. Basically, the Fed uh went too far. Is it possible that maybe instead of getting stimmy checks to the tune of you know, twelve hundred dollars and then fourteen hundred dollars And then actually it was the other way around. it was twelve hundred dollars.

Then we had the six hundred dollars. Then we had the fourteen hundred dollars from the Biden step up. Then you had the uh child? uh, tax credit, right? Is it possible that we end up getting a revisit of some form of stemi checks? Maybe Do I think it would ever be to the degree that we saw here? Very unlikely. It's very unlikely we would go back to this kind of stimulus.

However, Is it possible that there would be a a one-off Maybe I think before you'd ever get to a runoff and there was, you would not want to pray for that because I think we would be in a pretty deep recession if you prayed for that. But I do think that they'd probably go back to some of the protections that they previously had, which were very inflationary. The expansion of the Uh the money supply is what created the inflation that we have today, but I think they would actually and potentially make the same inflationary mistakes that we had the last time around just to a slightly lower degree. I Think though you could almost say with certainty.

Okay, so let's let's put some odds on this: I Think you could say with certainty uh, that is like 99 likelihood uh which is basically certainty that they are going to Via the Biden Administration print their way out of whatever recession we're going into by dumping money showering money into the chip sector and the energy sector. The inflation reduction Act was a ruse. It's not going to reduce inflation, it's going to increase inflation, but because they told Republicans it was going to be deficit neutral and everybody believed them. And now the Biden Administration can Loosely interpret every rule they want.

There's going to be a massive amount of spending here, so if you're looking for a job, you're probably always going to be able to get a job in chips manufacturing EV Solar Hydro you name it over there. I Don't think there'll be a shortage of jobs which I actually think is going to be fantastic if you're exposed to those kinds of stocks. Now with maybe a 40 chance. I would say Congress actually works together to raise unemployment compensation as long as there are look for work requirements I'd actually go as far as saying 40 to 60 percent in the event we're in a recessionary environment.

Oh, and then stemmies I'd probably say a one-off has maybe under the Biden admin, maybe a 20 chance, but it would really require a dirty recession, so you probably wouldn't want to go down that direction. Uh, so uh, that that would be a little scary. So somebody here says, why would you stimulate The truth is out there says why would you stimulate the economy while at the same time at the same time slowing the economy. So the only way this really plays out in my opinion is that inflation is conquered.

so inflation ends up proving to be transitory right that? So let me give you an example of what that could look like with data that's already happening. Uh I want to pull up a NatWest piece and then I want uh, the costs for shipping I have all I have so much data on my iPad it's insane, but uh, it's somewhere around here there. Got it? That wasn't bad. Look at this shipping costs out of China I even wrote next to it.

This is what transitory looks like. Okay, that right there is what transitory inflation looks like. So I know a lot of people are going to say hey, wait a minute. how could you possibly go back to stimulus checks if you have all this crazy inflation? Well, you can't Here's how you go back to stimulus checks.

Okay, number one: Inflation goes away. Inflation goes away. It goes away. That's number one.

So step number one is inflation goes away. However, to get there. oh, it's so annoying. However, to get there, you actually had to push the economy into a nasty recession.

So let's write that. However, now in, uh, nasty, Oh my. Lord Whatever. Man, Uh, you're now.

You're in a nasty recession. So inflation goes away. And now you're in a nasty recession. Now that you're in a nasty recession and you have no inflation, Guess what the government can now do? They can print, uh, their way back out, but less than last time.

So that becomes the rule, right? So the rule becomes: look, we'll print. but we just need to make sure we're printing less than last time because we don't want to create the inflation again that we did last time. So let's draw that out for you for a moment. so inflation goes away.

However, now we're in a nasty recession, so we want to print our way out. But we're going to do so less than last time. So imagine this: I'm going to draw a really big orange line here and this is going to be inflation. Okay, so let's say we get inflation.

That does this okay. And then it goes negative. So we're actually at deflation. Well, now the government prints money via stimulus checks or increased unemployment or chips or EVS whatever.

So they print money to push inflation back up and they basically try to cause that right? That's the goal. Will they be able to accomplish that? Probably not. They'll probably screw something up because that's what they're really good at, but it could happen. It could absolutely happen that we end up falling into deflation just like this chart shows you.

I Mean, look at this chart. this is shipping costs out of China Plummet. That's what our inflation is probably going to look like. Now Is it possible that it'll look a little bit more like this? You know where Where basically it takes, it stays higher for longer.

You know it could even to some extent kind of look like that, right? Is it possible? Yes. But if we get to deflation because of a deep dark recession I Think they'll turn the printers right back on and we'll be right back to Stimulus Check 17.. So yes it is possible. but there's another thing that is possible as well.

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