As of March 1, the Dow Stock index has fallen over 12% from its high a few weeks ago. Why? Currently we do not have massive numbers of people infected but we do have thousands every day flying into our airports and then out to the cities, towns and hinterland that have come from or through an infected area. Maybe they sat next to an infected person who didn’t yet show signs of infection. Mortality is 2.5 to 3%.

The President has no credibility so when he talks about the likelihood of Americans being spared from contamination nobody believes him. Appointing Vice-President Pence to oversee the pandemic is not going to reassure anyone. The administration says we have 30 million masks in storage for a population of 230 million. Morris Hospital as one mask for each employee, and more are on back order. The world is desperately short of masks with 3-M Company trying to make more as fast as it can. Most manufacturers are outside our borders.

Trump is right about one thing, it will burn itself out in a few to several months. In the meantime this is what could happen. One of my friends is planning a vacation with her family to Michigan in April. If Michigan is an infected state she won’t go. It means she won’t be spending money on lodging, food, gasoline, and other things which hurts Marriot, McDonalds, Exxon, and other businesses a little bit. It also hurts their suppliers, and the people working for them.

The car manufacturers would shut down to limit the spread among their employees. That would mean all their suppliers around the world couldn’t send their products so they would shut down. Imagine all the other businesses that might be affected. Yes, it probably will just last a few months but it might cut the country’s GDP growth down to less than 1% or maybe into negative growth., That’s why fear is cutting your IRA in half.