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Updated almost 5 years ago on . Most recent reply
Coronavirus & monetary stimulus effect on real estate - buckle up
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:
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
![](https://assets0.biggerpockets.com/uploads/uploaded_images/normal_1584810152-trillion_1.jpg)
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.
![](https://assets0.biggerpockets.com/uploads/uploaded_images/normal_1584810240-trillion_2.jpg)
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 . . .
![](https://assets0.biggerpockets.com/uploads/uploaded_images/normal_1584810360-trillion_3.jpg)
While a measly $1 million looked a little unimpressive, $100 million is a
little more respectable. It fits neatly on a standard pallet...
![](https://assets0.biggerpockets.com/uploads/uploaded_images/normal_1584810610-trillion_100.jpg)
And $1 BILLION dollars... now we're really getting somewhere...
![](https://assets0.biggerpockets.com/uploads/uploaded_images/normal_1584810662-trillion_10000.jpg)
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...
![](https://assets0.biggerpockets.com/uploads/uploaded_images/normal_1584810730-trillion_1T.jpg)
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.
Most Popular Reply
![Marc Winter's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/886213/1621504991-avatar-marcwin44.jpg?twic=v1/output=image/crop=301x301@95x261/cover=128x128&v=2)
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!