• There are two reasons that the stock market is disconnected from the economy. Both have a high price tag. • Ideally the economy will snap back, and the connection will be re-established that way, but it will still need to absorb an exorbitant amount of new money. • The other way to reconnect is a market crash. Are you prepared? • After the reconnect, be prepared for tax increases and inflation.

1. Baby Boomer
Investing Show
Protect Your Savings
Using a Consultant Do it Yourself
60/40 stocks/bonds is too risky for most boomers
Episode 15
https://www.patreon.com/user?u=35204315&fan_landing=true

2. The Big Disconnect
Between the Current
Economy and the
Stock Market
and
What You Can Do
About It
Economy Stock Market

3. Why Does the Stock
Market Keep Going up?
•Hopium: If something is true, no
amount of wishful thinking will
change it. Richard Dawkins
•Federal Intervention:
$7 trillion heading to $10 trillion

4. The Economy is in a
Recession

5. -10% YTD
7/30/20

6. 15%
% Unemployment

8. The Stock Market is
Reaching New Highs

9. “V” ?
S&P500
Prices Rebound While Profits Decline

10. Expensive Stock Market
Growth Bubble: 43
35
23%

11. Recovery from the
Great Depression
Took More Than a
Decade
?
Episode 6: Controlling the Financial Damage from COVID-19
https://www.youtube.com/watch?v=WncE5jtTaB4
12 Hits
Source: Hartford Funds

12. Gold above $2000

13. The Federal
Reserve to the
Rescue

14. 700
2200 2300
4500
3800
7000
1120
2125
2925
Federal Reserve Balance Sheet: $7 Trillion & Growing
COVID Relief so far is $3.2 Trillion, since S&P March low
Another $1-3 Trillion is in the pipeline
Fed Assets ($Billons)
S&P500

15. Weekly Earnings Spike on Unemployment Relief: Earning More for not Working

16. New $ Buoys
up Stock
Prices
Rich people buy more
stock
Corporations buy back
their own stock

17. Why Low
Interest Rates
Encourage
Share
Buybacks
It is Smart Leverage
Borrow at Invest at
Return 3 6
0
1
2
3
4
5
6
7

18. Corporate Earnings Are Paying Dividends & Buying Back Stock
Earnings Spent Entirely on Buybacks & Dividends
And Yardeni Research
Steady Dividends

19. Hopium
for that Stupendous Stock
Market High
FOMO

20. Fear has
given way to
Greed. Are
you scared?
Fear: March 2020
Greed

21. Consequences
of Printing $10
Trillion

22. Where Will $6 Trillion in Covid Relief Come From?
(GDP is $21 Trillion)
$10 Trillion
Buyers of Treasury Bonds

23. The Federal
Reserve is
“Buying” All
of the COVID
Relief Money
Foreigners and US Citizens are tapped out, reached their maximums

24. Treasury issues bonds (borrows)
Spreads helicopter money
Fed buys bonds backed by
Future tax receipts

25. Inflation Goes Where the Money Goes
Quantitative
Easing
$5 Trillion
QE1, 2 & 3
$6 Trillion
Covid QE4
Stock & Bond Markets
Price Inflation
Money Illusion
Consumer Goods
“C” in CPI is
Consumer

26. Modern
Monetary
Theory
(MMT)
A witty parody of political life in Jonathan Swift's time (1726)

27. And Now the
Rest of the
Story
Paul Harvey

28. Episode 2: 10 Threats
Entitlements are running out
of money:
Medicare broke in 2026,
Social Security in 2034
2018 was first year where SS
payments exceeded receipts
GDP Debt
Social
Security
Medicare
$Trilions 21 27 29 47
0
5
10
15
20
25
30
35
40
45
50

29. World debt crisis: exceeds 500% of GDP

30. Per Capita World Debt is $200,000
North Korea and Iran
China, Europe, etc.
COVID-19 Stock & Bond Market Bubbles
Social Security & Medicare Going Bankrupt
Hyperinflation

32. Be worried If you’re 60/40 Stocks/bonds

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