Corona the Crown Jewel of Economic Destruction & Rebirth

Image for post
Image for post
Source: Self Created Image with Canva

Two Months ago I wrote American Politics failure to address Corona would burden the United States Economy approximately $1.623 trillion. As most economic predictions are, my prediction ended up being conservative.

The total economic impact of Corona Year To Date is at least $2.0 Trillion.

I know what you’re thinking, “How is the government offering money hurting us?”

I’ll explain. Remember there is no such thing as a free lunch.

If you are unfamiliar with how stimulus bills economically impact a domestic economy, I will briefly touch on it. I detailed numerical impacts with case studies in my article “Governments Trade Death Because They’re Pandemically Afraid of Corona’s Economic Consequences” for those wanting to read. For now, let’s just take my credentials as an Accredited Financial Analyst (AFA®) as substantiation.


The concept of stimulus is not complicated.

In order to distribute money, not currently available to the U.S. Federal Government, the U.S. Federal Reserve Bank must print it or promise to print it. If the U.S. Federal Reserve Bank prints 2 trillion dollars instantly there are grave consequences. Instant printing devalues your money substantially overnight. Instant printing also decimates stock markets and bond markets. Costs of Goods would soar, rent would increase at the end of your lease, and gas prices would run wild. Mass printing has the opposite effect of what the Federal Government intends to do.

Now that we understand mass printing, we can deduce the U.S. Federal Government is probably not going to ask the U.S. Federal Reserve to instant print the majority of stimulus bill money. Some instant printing is necessary (think of the $1,200 every family is going to get) but the majority will be delayed, hidden and booked in ways to shield the economy.

In order to limit runaway inflation, the U.S. Federal Government (different from the U.S. Federal Reserve) issues long term Treasury Bonds. Most likely the Treasury Bonds issued by the U.S. Federal Government will be 30-year Bonds. These Treasury Bonds will be issued to the U.S. Federal Reserve. These Bonds will then be allocated to member banks of the U.S. Federal Reserve (Bank of America, Chase and Wells Fargo are members of the Federal Reserve System).

Once allocation of U.S. Treasury Bonds are issued to member banks, the member banks are eligible to open up credit with the U.S. Federal Reserve. The member banks pull credit to allocate loans to small businesses. Allocating credit this way allows the “Average Joe” to get stimulus money while not instantly decimate the economy in the process. Some of these loans will be forgiven. When a loan is forgiven the bank issues out a 1099 to the recipient. Any forgiven money becomes taxable. Taxable revenue limits losses to the U.S. Federal Government for authorizing loans not repaid. The U.S. Federal Government may not recover all its money, through member banks utilizing the SBA to manage credit authorized by the U.S. Federal Reserve, but it will indirectly receive some repatriation through taxes collected by the IRS. This is the reason the SBA is having banks send out emails that look like this:


Basic accounting 101 says expensing borrowed money is always bad. All that happens by spending borrowed money is you run a negative profit & loss. In addition to losses you must also carry debt that must be repaid.

Let’s thank God someone in the U.S. Federal Government thought it was a bad idea to simply give away most stimulus money.

The alternative is to create a liability balanced with an accounts receivable. The hope the U.S. Federal Government has is by having most stimulus money owed (with interest) it creates a net positive offset in their benefit. This benefit lessens the economic blow inflicted by asking the U.S. Federal Reserve to obligate itself to print more money.

In a loan scenario the U.S. Federal Government gets most of the stimulus bill money repaid with interest. Forgivable loan recipients still pay taxes on loans forgiven. A forgivable loan (or bad debt write off) is treated as income to the recipient in the year it is written off. Prior to the write off it shows as an “asset”. With a forgivable loan the U.S. Federal Government gets the benefit of booking an asset immediately and collecting tax revenue the year the loan is forgiven.

If the U.S. Federal Government were to simply grant money it would run huge liabilities with no way to recapture expenses. This could cause two scenarios: 1) Massive Default or 2) Massive Inflation (to avoid the default the U.S. Federal Government prints more money). Both are very bad consequences. Remember the U.S. Federal Government still carries a balance sheet. There is a reason for a Treasury Secretary.

Under a loan strategy the U.S. Federal Government can pay off its obligations to the U.S. Federal Reserve and the offset is net zero…right?

Not quite.


In a best-case scenario, the U.S. Federal Government recaptures say seventy five percent (75%) of disaster loans repaid back with interest over a five (5) year term. Let’s say twenty five percent (25%) are forgiven in one (1) year. Let’s assume forgiven loans are taxed at twenty percent (20%) which makes income recipients realize an average tax burden to equal at least five percent (5%).

Under these best-case scenario assumptions, the U.S. Federal Government gets paid back about eighty five percent (85%) of its original allocation if you add up interest (let’s assume 2.75% per year).

The impacts under a best-case scenario consist of:

1. A net inflation of thirty percent (30%) on money circulated. The fifteen percent (15%) obligation must be paid back by the U.S. Federal Government to the U.S. Federal Reserve. Despite forgiveness money being injected into the economy the money most likely used to repay in the future has not been created. Often the tax revenue on the unaccounted Fifteen Percent (15%) circulating will not be enough to cover future obligations — nor will it be tracked. The money will change hands indiscriminately. Throughout the economy there is no way to figure out who, what, where or why. So, the U.S. Government will do what it always does to pay its liabilities as they come due. They will print it.

2. Eighty Five Percent (85%) of the monies borrowed was offset by loan assets administered by financial institutions (Chase, Wells Fargo, et cetera)

3. Eighty Five Percent (85%) of the monies allocated was staged on a “Print as Needed Basis” instead of overnight printing. This shields the immediate impact of debt.

4. Reporting of inflation of the U.S. Dollar will be low because the money due at the end of a thirty (30) year Treasury Bond Cycle is not due until the maturity date (most likely 2050). The U.S. Federal Reserve can authorize banks to remit payments with “credit” not “cash”. Therefore all loan monies are “credits”. (Now you know the real term for “Credit Card” and “Credit Line”). People accept “Credits” instead of “Cash” all the time. Next time you look at your credit card remember its a “credit” that just “paid” your groceries not “cash”.

The worst-case scenario is just a larger increase in best-case scenario numbers. The numbers could end up being only twenty five percent (25%) of loans being paid back. This triples the numbers annotated in one through four (1–4).

Regardless of how it plays out the U.S. Federal Government is playing a game of “delay”. At some point in our lives we will have to deal with an additional 2 trillion debt. This debt will be paid by the U.S. People in:

1) Currency Devaluation

2) National Debt Increases

3) Purchasing Power Erosion

4) Taxes to the IRS on Monies Forgiven


It is important we understand the stimulus bill, known as the CARE Act (the Coronavirus Aid, Relief, and Economic Security Act), for what it is. The CARE Act is a temporary bandage for a gushing wound bleeding profusely. We need stitches and anti-biotics to stop the infection.

The solution must be focused on impact investing. The SBA should concentrate on businesses eligible to adapt to a virtual environment, innovate revenue generating methods under limited environment, and fund robotics companies eligible to eliminate manual tasks to complete projects we view as essential.

Want to keep companies profitable without corona concern? Put a robot in place of a human.

If construction companies had robots to perform work, no roads projects would stop. If Walmart finished its robotics roll-out the stores would remain stocked and clean. If autonomous trucks rolled out in full force this year there would be no disruption in supply delays and no risk of infection migration. If we accepted nationwide remote authentication security requirements would be fulfilled at banks for banking transactions.

My next prediction is, “Corona Virus will cause innovation in autonomous robotic employment eliminating the jobs lost during Corona Virus outbreak permanently. Permanent loss in jobs will spur Universal Basic Income with a society shift focused on purpose versus money. America will become more socialist over the next ten (10) years.”

Corona virus has forced us to embrace technology. Corona also forced us to let go of antiquated methods of doing things that people were previously unwilling to let go. As bad as Corona is the good is this situation forces us to realize our full potential. We can no longer make excuses for failing to utilize available technology.

We must confront the dilemma that human application in the workforce may be severely impacted to near elimination.

Don’t despair. There is a future beyond this. This future will be shaped by robots. How you interact with a robot needs to be your focus. Embrace the fact your job is probably not going to come back. Corona might just be the catalyst to push humanity into the 21st century. Invest in robotics companies and invest in the skill set necessary to operate robots. It might just be the $100 investment that turns to $100,000.

Follow me on Medium or subscribe to my newsletter to learn more insightful advice on how real life situations actually create opportunity. I’m not a story book teller. Wealth is value not money. Money is always attracted to wealth.

To your knowledge success!


About Christopher: Christopher Knight Lopez is a Professional Entrepreneur. Christopher has opened over 7 businesses in his 14-year career. Christopher’s purpose is to take advantage of various market-driven opportunities. Christopher is a certified Master Project Manager (MPM), Master Financial Planner (MFP) and Accredited Financial Analyst (AFA). Christopher previously held his Series 65 securities license. Christopher also has his General Lines — Life, Accident, Health & HMO. Christopher has managed a combined 286mm USD in reported Assets Under Management & Assets Under Advisement. Christopher has work experience in 29 countries, raised over 50mm USD for various businesses, and grossed over 7.5mm in his personal career. Christopher worked in the highly technical industries of: biotechnology, finance, securities, manufacturing, real estate, and residential mortgages. Christopher is a United States Air Force Veteran. Christopher has a passion for family, competitive sports, fishing, martial arts and advocacy for entrepreneurs. Christopher provides self-help classes for up-and-coming entrepreneurs. Christopher’s passion to mentor comes from belief that entrepreneurs need guidance. The world is full of conflicting information about entrepreneur identity. See more at

Disclaimer: This information is not meant to be a form of investment advice or financial advice. Do not apply this situation to your own personal circumstance. Various risks include: business risk, investment risk, political risk, and other risks. This information is for informational and educational purposes only. Please do not reach out to the author for any investment strategies or philosophies. Please consult your own financial advisor or legal advisor for your own circumstance. Not a recommendation or endorsement of any kind.

Written by

Christopher is a Professional Entrepreneur with over 14 years of experience, a Master Project Manager, Financial Analyst, & Master Financial Planner

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store