Posted on 03/01/2021 7:23:31 AM PST by SeekAndFind
The Democrats are set to pass yet another big-spending bill they claim is COVID-19 relief. As with previous bills during the pandemic, there’s less COVID relief in it and a whole lot of other things that have nothing to do with helping Americans struggling through the pandemic. It’s packed with reckless spending that will typify the Democrats’ control of Washington over the next couple of years.
The very first congressional COVID “relief” bill struck me as big spenders treating it as a genie jumping out of a Christmas tree. That was the $2.2 trillion CARES Act, passed in late March 2020. It was less targeted relief for the pandemic and its lockdowns and unemployment than Congress seeing the opportunity to have all its spending wishes fulfilled at the expense of future generations.
The House has passed its $1.9 trillion bill this past week. It faces an uncertain future in the evenly divided Senate. Supposing it passes, that will be more than $4 trillion spent in the past year just on so-called relief, which is less relief than Congress using the true crisis to go on a series of spending binges.
Congress acts as if this massive, unimaginable federal spending will not have any negative consequences, but it almost certainly will. Something that cannot go on forever will not go on forever. Massive, unchecked, and irresponsible federal spending cannot go on forever without an almost Newtonian reaction. For every physical action, Sir Isaac Newton discovered, there’s an equal and opposite reaction. While that applies to physics, we see it work out in politics, too. For every policy proposal there’s always pushback. Every time Congress intervenes in the economy, there are consequences.
(Excerpt) Read more at pjmedia.com ...
COVID Stimulus Spending May Eventually Lead to Inflation.
Is this some sort of joke?!
Gold may be another beneficiary of the weakening faith in the dollar. One year ago an ounce of gold was worth $1,619. Today an ounce of gold is worth just under $1,800, but it topped $2,050 in 2020. Is there room for gold to go higher?
A single tulip bulb used to cost as much as an entire farm.
They might be. But both are volatile.
And really, does anyone want to live in a world of $5000 gold or $600 silver? There won’t be anything to buy with it.
What most of the discussion about “inflation hedges” tend to ignore is the way that inflation disrupts the market (and then government action) in weird and unexpected ways.
True breakaway inflation would be followed by government price controls which in turn will cause shortages, perhaps even rationing.
Prep for shortages by stocking up on non durable stuff you can see—win win.
That’s not entirely correct. There was a tulip bubble, but not for the individual bulb. The Madness of Crowds has been debunked over the past 20 years, but no one here seems to realize that.
The inflation came in entire crops of specific tulips. In terms folks can relate to, they were buying “breeds”, not generic dogs. Show poodles, not generic reduce mutts.
The entire bubble cycle is well defined. When government spends the way they do, all of that free money gets slapped down on the table and out on a single number.
Inflation hedges are well known. The only thing I would say is that if you buy a hedge, make sure you own it. In your hand. Otherwise it’s paper and it will blow away.
Think back a year ago when transportation was halted. What did people need? What was in short supply? What did people talk about needing to get? A well stocked pantry, some source of heat, and a method of transportation are good things to secure.
The question isn’t whether you want to live in that world or not, because it’s almost certainly coming irrespective of your wishes. The question is: what assets do you want to arrive in that world with, that you already bought well before arrival?
Gold, silver and land. If you don’t have it get some.
There already is inflation. The question is, will it increase to a point where the media finally start talking about it?
When the government creates money, it dilutes the value of the currency, stealing from those people who worked hard to save a little money and who are now very angry that it is being reduced to nothing.
Bitcoin has soared back above $48,000 this morning, after crashing near a $42,000 handle over the weekend, following Congress' passing of Biden's stimulus package.
“In the US a $1.9 trillion stimulus package is on the way. That's more than all the cash currently sitting on the US Treasury account at the Federal Reserve,” on-chain analytics service Ecoinometrics summarized to Twitter followers.
Tulips are just the “low hanging fruit” analogy. Pick your pyramid...
Bitcoins have no value beyond faith. They are even weaker than fiat currency of nations, because at least they back up their currency with armies. For their currency to fail, the country itself has to fail. What has to fail for bitcoins to fail? I just see them as a real world example of the “greater fool”. Sure, if you’re not the final “greater fool”, you can do pretty well.
Cryptocurrency is fiat currency as is the dollar and all
government issued currencies. Is it based on faith and trust.
Faith is for religion and trust is not for government.
One year ago silver was in the $12 range, today around $27 and acting like it will go higher. In everyday terms, "one thin dime" now brings at least $2.50.
YA THINK???
I'd recommend a fourth asset: Lead. Preferably in a ratio of 92% Lead, 6% Antimony and 2% Tin, for a Brinell Hardness Number (BHN), of 18.
Guns are a good hedge.
Short term negative on gold because there is no more COVID effect since COVID is coming to an end, despite all the fear mongering. But long term we have Democrats in total control of the public purse. I thought the Bush administration was irresponsible when it came to wasting money, but this new one will be like no other.
Inflation is already starting to happen.
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