Coronavirus & monetary stimulus effect on real estate - buckle up

Coronavirus & monetary stimulus effect on real estate - buckle up

Riverside, CA · Member since 2017 · 412 posts · 296 votes

The government is talking about stimulating the economy with One Trillion dollars ($1,000,000,000,000). Does that number even exist? Yes, it is actually a number. The question is how much is it and how will it affect real estate. So, here it is:


What does one TRILLION dollars look like?

All this talk about "stimulus packages" and "bailouts"...

A billion dollars...

A hundred billion dollars...

Eight hundred billion
dollars...

One TRILLION dollars...

Let's try to get a sense of what exactly a trillion dollars looks like.

We'll start with a $100 dollar bill. Currently the

largest U.S. denomination in general circulation. Most everyone has seen
them, slighty fewer have owned them. Guaranteed to make friends
wherever they go


A packet of one hundred $100 bills is less than 1/2" thick and contains
$10,000. Fits in your pocket easily and is a real restate agent's
decent commission on a sale.



Believe it or not, this next little pile is $1 million dollars (100
packets of $10,000). You could stuff that into a grocery bag and walk
around with it. Watch for abandoned bags next time you are out and about
you never know what may be in it  . . .



While a measly $1 million looked a little unimpressive, $100 million is a
little more respectable. It fits neatly on a standard pallet...





And $1 BILLION dollars... now we're really getting somewhere...


Next we'll look at ONE TRILLION dollars. This is that
number we've been hearing so much about. What is a trillion dollars?
Well, it's a million million. It's a thousand billion. It's a one
followed by 12 zeros.

You ready for this? It's pretty surprising.

Go ahead... Scroll down...

Notice those pallets are double stacked.
...and remember those are $100 bills.

So the next time you hear someone toss around the phrase "trillion dollars"... that's what they're talking about.

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Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
6y

Well, a trillion dollars--that's a lot of money... OUR money, not the governments.  Or at least that's how it's supposed to work.

But it doesn't.  

The Fed can create money out of thin air.  Or rather in hyperspace on their computers.  They simply add as many numbers as they deem appropriate, and hit ENTER.

They will tell us that it is 'stimulating' our economy; what it really does is dilute our money.  Inflation, or rather devaluation of the dollar's buying power is the end result.

Why am I bothering to go here?  Because IMHO, with interest rates at or near zero, and this 'quantitative easing' (dilution of our dollar) real estate will increase in 'value' after this crisis.  That will be especially important to those of us that actually survive the bug. (Joke or no joke--that's the fact, Jack).

Good luck to all, stay safe and healthy!

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  • Contractor · Oxford, MA · Member since 2018 · 807 posts · 745 votes
    6y

    The federal reserve started doing stimulus months ago and already spent more than during the housing bubble recession. $1T is the tip of the iceberg as far as what is going to be spent. I would be surprised if $6T isn't spent and handed out to banks, companies, people and state and local governments by the end of this 

  • Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
    6y

    Well, a trillion dollars--that's a lot of money... OUR money, not the governments.  Or at least that's how it's supposed to work.

    But it doesn't.  

    The Fed can create money out of thin air.  Or rather in hyperspace on their computers.  They simply add as many numbers as they deem appropriate, and hit ENTER.

    They will tell us that it is 'stimulating' our economy; what it really does is dilute our money.  Inflation, or rather devaluation of the dollar's buying power is the end result.

    Why am I bothering to go here?  Because IMHO, with interest rates at or near zero, and this 'quantitative easing' (dilution of our dollar) real estate will increase in 'value' after this crisis.  That will be especially important to those of us that actually survive the bug. (Joke or no joke--that's the fact, Jack).

    Good luck to all, stay safe and healthy!

  • Rental Property Investor · NJ and PA · Member since 2019 · 206 posts · 105 votes
    6y

    The first time a trillion dollars was commonly mentioned was in the 80s. Back then I told people if you borrowed a million dollars a day since the birth of christ, you would be less than a trillion dollars in debt today.

  • Peoria, IL · Member since 2013 · 967 posts · 383 votes
    6y
  • Investor · NJ · Member since 2018 · 869 posts · 921 votes
    6y

    1,000,000,000,000÷327,500,000(people)= $3,053.44 per person in the usa. 

    Compared to the rest of our debt which Is like 23T I think. That's like $70,000/person here. 

    The real question should be what comes after a trillion?? Because in 10-30 years we will probably be there.

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