“When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear.” Thomas Sowell
The Fed insists that persistent high inflation, clocking in at its highest level since 1990, is transitory. Trust me, it is not transitory. After 18 months of the largest monetary expansion in U.S. history and trillions of dollars in new and old spending from the Biden administration, the hidden tax will linger like an annoying pest.
Between 2008 and 2014, the Federal Reserve printed more than $3.5 trillion in new bills. To put that in perspective, it’s roughly triple the amount of money that the Fed created in its first 95 years of existence. Before this spree of creation, the Fed held just $950 billion. This newly created money poured through the veins of the financial system and stoked demand for assets like stocks, corporate debt and commercial real estate bonds, driving up prices across markets.
This was on top of years of the Fed pumping up the price of assets like stocks and bonds through its zero-percent interest rates and quantitative easing. Now the Fed is in a vise. To ease rising inflation, they have signaled that they will start hiking interest rates in 2022. But, if that happens, there is every reason to expect that it will cause stock and bond markets to fall, perhaps precipitously, or even cause a recession.
“There is no painless solution. It’s going to be difficult,” warns Thomas Hoenig, former president of the Federal Reserve regional bank in Kansas City. To be clear, the kind of pain Hoenig speaks of involves high unemployment, social instability and potentially years of economic malaise, a situation we saw during the Great Inflation of the 1970s, characterized by long lines at gas stations and price hikes at grocery stores where prices could change several times in any one day.
When Biden walked into the White House in January 2021, he inherited an economy that was one of the strongest in the world. Now, with just a year under his belt, America is facing a failing economy that threatens to make the Great Inflation of the 1970s seem like a walk in the park. Skyrocketing inflation is set to destroy not only our savings but potentially trigger a massive economic correction in the stock market.
Biden, the lap-dog media and the political world would prefer that we believe inflation is good for the economy, good for ye olde pocketbook, good for his friends and foes alike because, well, gosh darn it, everyone is helped when prices soar. Don’t get the logic? Don’t worry. There is none. That’s just the Democrat way: Spin, spin, lie, deceive, duck and dodge — and repeat until critics go away.
Brian Deese, head of the Biden’s National Economic Council claimed last summer that inflation was normal and if you simply stopped measuring goods and services that caused a higher CPI, there would be no inflation. What an epiphany! I’m surprised no one thought of that before!
Jim Cramer, the CNBC host of Mad Money, claimed during his December 9th program that the economy was the best he had ever seen. Wonder what he was smoking! Today, there are five million fewer jobs than before the pandemic and inflation is the highest it has been in 39 years. Millions are living paycheck to paycheck.
In the third quarter of 2021, the average sales price of a home was $453,300, the highest price ever recorded and $55,000 more than the third quarter of 2020. The average cost of a new car is now more than $44,000. Used car prices have soared to $27,500, about 35% higher than at the start of 2021. Plus, the country is still living through public health restrictions, despite 61% of the nation being fully vaccinated.
Unfortunately for the Democrats, no matter how hard they try to sell the myth, Americans aren’t buying the lie. Biden and his merry band of water carriers can’t fool citizens into seeing money in their wallets that just isn’t there.
No one really knows what is about to happen, with one possible exception. It is demonstrably certain inflation into 2022 will continue increasing. Beyond that, after pumping $9+ trillion into the U.S. economic system under the guise of COVID relief, we are entering some very uncharted waters. The Last Refuge
Source: The Fed’s Doomsday Prophet Has a Dire Warning About Where We’re Headed by Christopher Leonard, Politico; Swamponomics: Will Washington Hide True Inflation In 2022? Politicians and Streamers: Socialists Get Richer Heading Into 2022, and Has ‘Transitory’ Inflation Destroyed Federal Reserve Credibility? by Andrew Moran, Liberty Nation; Democrats can’t lie their way out of inflation by Cheryl Chumley, the Washington Times