- In the wake of the manufactured coronavirus pandemic and social unrest, the governments have spent over $9 trillion in stimulus spending so far to keep the economy on lockdown and the people at home. They promise to spend trillions more.
- These benefit recipients are encouraged to engage in reckless behavior. These programs have increased moral hazard and laziness, while their lack of direct immediate costs to society have the economists, politicians, and citizens all planning for a future in which the government can continue to spend with little regard for any reprecussions, since they believe there aren’t any.
- They listen to the central bankers and how they have promised to buy as much debt as possible, while keeping interest rates moving lower over time.
- We have discussed for years that the central banks still have enormous amounts of space left on their balance sheets to keep things moving along.
- Ben Bernanke says that the United States Fed can grow its balance sheet to 100% of GDP and beyond, and I agree. That means the U.S. Fed can effectively triple the size of its balance sheet, and I think it can even go much higher than that, depending on the amount of deflationary pressures caused by all this massive debt service.
- By definition, these stimulus programs will continue to support asset prices while they contribute to the loss of long-term economic vitality and personal freedoms we once held dear.
- These government programs help to consolidate their power and control over the population, and the people do not care. They seek government input into every aspect of their lives, especially when it suits them.
- We need to plan our mental and financial lives accordingly. We will find it increasingly more difficult to convince people that there is no such thing as a free lunch. Instead of going insane, we need to stay out of personal debt and buy the assets that will benefit over time in a regime of falling interest rates and exploding debt issuance. Of course, all the sovereign debt will remain in force.
- 90% of the population will lose out in the long run, but they will never be able to make the connection. They have been indoctrinated properly to not understand how they can no longer control their spending habits. You and I can actually benefit at their expense.
Thanks for the blog post Chris. Interesting with the great reset. I guess with low interest rates, asset prices have nowhere to go but up.
Everyone I know is blowing all their money on cars, cellphone and their Starbucks lattes.
I’m still driving a 15-year old Acura that still runs great. Some people are clueless with their money. Financial illiteracy is alive and well up here.
Oh well, to each their own. Enjoy the summer, Chris.
V – Toronto
Try explaining to others how this privatized monetary system directly exploits and oppresses them. They do not want to know, yet it is the root cause of 95% of their problems. The owners of this central banking cartel have a lockdown monopoly on the media; educational system; financial markets; medical, technology, and war industries; as well as the banking system. It’s easy to buy off the world when they can print what ever amount is needed to accomplish the task.
The entire narrative is now controlled from cradle to grave, and explaining this to the unwashed 90% is an exercise in futility. Even the “top” economists cannot see what we see. So, we need to financially and mentally prepare for what is coming. For me and many of my subscribers, we will continue to come out ahead.
A “top” economist says the $4 trillion deficit isn’t the problem — it’s how we’re spending the money
Here is a Business Insider article that explains how a “top” economist says we need to rethink deficit spending. The writer and his referenced economists claim that it’s not the size of the government fiscal deficits that matter, it’s how the money is spent. This opinion piece, which was offered up on this Jeff Bezos funded site, provides a glimpse into the future of government.
“We’ve been indoctrinated by the constant refrain that the government should put its fiscal house in order,” Kelton explains. When they rage against the deficit, Kelton says trickle-downers who want to keep government as small as possible use “our understanding of our own personal finances” to convince us that government spending and the accrual of debt is “reckless and irresponsible.”
But Kelton says we need to frame federal spending and deficits differently than household balance sheets: “When we’re talking about the government’s finances, we could just as easily substitute the word ‘surplus’ every time we see the word ‘deficit’ and the sentence would still have meaning.”
A top economist says the $4 trillion federal deficit isn’t the problem — it’s how we’re spending the money – Paul Constant referring to Economics Professor Stephanie Kelton regarding Modern Monetary Theory, Business Insider, July 3rd
Yes, you read that correctly. Up is down and two plus two equals five. In a world of ever-lower interest rates and its resulting lack of accountability, deficits mean surpluses. The elites and wealthy prefer deficit spending, because most of the money eventually trickles in as profit, while they stick the debt slave with the debt millstone. Landlords get higher rents and the large firms with things to sell see a bigger bottom line.
Okay, so where does this leave us? It leaves us in the driver’s seat. I envision a future where the government will hand out trillions in reparations for every victimized class, which will all come gratis the central banks. I have no opinion on the matter, only to tell you that you need to put your financial and mental houses in order. You need to buy assets that will benefit from the tens of trillions of dollars in new spending, while avoiding the ones that will lose out from the resulting deflationary red ink.
If you have followed my research and theories then I think you already know what you need to do.
If you think stocks, bonds, gold, and real estate are expensive now, just wait a few more years. For the vast sea of humanity, it will be brutal, but it doesn’t have to be for us.