The current Covid-19 pandemic started with the first diagnosed case in Washington State on Jan. 20, 2020, and was confirmed by the U.S. Centers for Disease Control and Prevention. So we are approaching almost seven months of the ever-increasing pandemic with higher infection rates in a multitude of other states outside of New York, especially those in the Carolina’s Georgia, Florida, Texas, and California.
I am not sure how we can more effectively monitor and control those people coming in and at the same time maintain our extremely low infection rate of less than 1 percent that Gov. Cuomo and the public have diligently and successfully mastered, enabling our economy to begin reopening back in May. Although the authorities pulled over 320 cars by our tunnels the other week, it’s a start but how many thousands of cars were not stopped, allowing in those who might be infected, especially those who are asymptomatic and don’t know even know it. Only time will tell over the next month or two how this will affect our local population.
As of this writing, there are over 30 million still unemployed, while Congress cannot seem to agree on a non-partisan plan to provide the much-needed monies to keep those above water who can least afford to be out of work. The $600 additional monies that were previously (now expired) provided to those who are not working is one of the sticking points especially with those in Congress who say it is the motivation to not go back to work (I have spoken to countless individuals and I believe the majority would rather go back to work). Moreover, monies to continue to fund small businesses, restaurants and the U.S. Post Office are other areas of disagreement causing a stalemate.
The real dilemma is that Washington should have (and didn’t) set up a coordinated and organized national testing and tracing program as well as a PPE (personal protection equipment) distribution system. The necessary guidance and setting an example for the public wasn’t initiated back when more people would have realized how life-saving wearing masks would have been, no matter how uncomfortable, to assist in keeping people from infecting others and potential deaths. Some say it is their constitutional right to wear or not to wear a mask, but at the same time is it your right to cause others to get sick and potentially die? I do not think so!
Our ignorant population who really could care less is the main reason for the critical increase in infections that are occurring all around the United States. It’s very ironic that we have laws against drinking and driving, speeding and other practices that obviously were enacted to protect the public’s health and well-being, right? So how many more people have to die until Washington enacts an executive order to be adhered to with the assistance of our governors and local mayors so we really can make a concerted dent in Covid-19? I know, it’s politics and it’s not about improving the health of our population. Eventually, some well-tested vaccines will be produced and will hopefully be 90-plus percent effective to protect the public as long as people feel safe and comfortable in agreeing to be inoculated.
The point of the previous information is to bring attention and to understand where we are in this pandemic and the instability of our economy and what is happening behind the scenes. Various forms of alternative cryptocurrencies and bitcoins have been around for 10-plus years and the question is what effect they will have on our current monetary system going forward in relation to real estate and business. There continues to be a growing divide between the haves and the have-nots and how our fiat currency could potentially be greatly affected in the future.
Fiat currencies do not last forever. While we have all these unemployed people, restaurants closed or partially open and barely making it, as well as other highly impacted businesses teetering on possible bankruptcy, keeping them above water becomes tantamount to the survival of our economy and our currency as we know it. The real crucial issue is the government must continue to print trillions more dollars for a second stimulus package and how it could dilute our currency, potentially causing a hyperinflationary situation and thereby decreasing its value.
Compared to the downturn in 2008, the Fed has printed twice as much currency and may end up issuing more than 3 times as much to buoy the money markets and our economy. So now our national debt as of 7/31/20 is an unimaginable $26.5 trillion. However, for now, the cost of borrowing is extremely low, but If one-day rates increase, the cost of our borrowing would be catastrophically higher. It would mean one would need more dollars to buy a particular commodity, including real estate. However, currently due to extremely low inventory and historically low-interest rates, strong demand and prices still increasing, the silver lining is that our national real estate market is doing well.
What has come into play the last number of years is the bitcoin and cryptocurrencies. Something has been changing with respect to how industries are getting into and starting to use these currencies in their businesses. Some believe it is a fantasy currency and will not replace our current currency and will eventually go away. However, many banks and major investment houses and other large companies have a stake in this new industry. As of August 2020, the most expensive cryptocurrencies worldwide were Bitcoin, Maker, Ethereum, and Bitcoin Cash. Bitcoin continued to outpace other currencies, with one coin valued at $11,278 U.S. dollars (but almost reached $18,000 in 2017). The second most expensive virtual currency, Maker, could be purchased for $601 U.S. dollars. Come back next week for Part Two on the cryptocurrency being used to purchase real estate in the United States.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). Just email or snail mail (regular mail) him with your ideas and suggestions on future columns with your name, email, and cell number and he will call or email you back. For a consultation, he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com to answer any of your questions or concerns.