These ideas run consistent when we consider the ongoing buildup to the global force majeure of World War 3.
I normally do not include any economic and financial analysis that Joel Skousen brings with his World Affairs Brief, but in this instance, I will. He brings up an interesting theory regarding the inflation of the money supply.
The crux of his analysis is that the FED is not only monetizing debt, but actually literally printing money, hiding it, and handing it out directly. This is what nations like Venezuela are doing.
If any of this is remotely true, which I’m beginning to believe it is, because inflation seems to be persistent, the average person on the street is going to continue to be wiped out financially over the next several years. The federal government and the Federal Reserve will not let asset prices and thus tax revenues be destroyed like many are contemplating.
Keep in mind of the trillions of dollars in spending that the governments need to incur in order to prepare the world for World War 3. This is the real reason why China is incurring the wrath of government lockdowns. Xi and the CCP are preparing their citizens. It has nothing to do with covid.
My theory is that the average citizenry will demand a new currency if the current system is hyperinflationary. A deflationary set of circumstances is not going to cut it. Hyperinflation and war have always been the tag team used to get people to submit to circumstances they normally would not accept.
This seems to be coinciding with the loss of faith in the current monetary system and in fiat currencies in general. I noticed the concerted effort of the mainstream press to begin emphasizing the weaknesses of fiat currencies. When inflation is caused by a loss of confidence, the outcomes will be very dire. I suspect that the central banks are literally printing money at this point and hiding it from official statistics in order to facilitate the nation-state buildups to World War 3 and wealth consolidation prior to the Great Reset. By the time the average citizen on the street realizes any of this, which I doubt the vast majority will ever discover, it will be way too late for them to act.
The reason why I include this particular analysis is that Mr. Skousen is an expert in military affairs, and this is bleeding over as none of this runs independently of one another anymore.
HIGH INFLATION IS HERE TO STAY
Inflation rates are the highest in decades, even according to the official “Consumer Price Index” which is manipulated downward by excluding the fastest rising prices, even though we all feel the pinch of higher prices everywhere. This is bad news for the incumbent Democrats because high inflation is the number one complaint of voters heading into this year’s mid-term elections, and there are signs inflation will continue to be a major issue well into 2024 as well. It may seem contradictory to still have rising prices when all the economic indicators point to a recession, driven in large part by rising interest rates currently at 7%. But interest rates don’t tell the whole story. High interest rates only kill demand in those parts of the economy that depend on debt—consumer credit card debt, mortgages on housing, and business interest for growth and expansion. The recession is hitting in those areas right now, but actual inflation of the money supply by the FED is NOT stopping as only part of the new debt is being monetized. Increasingly, the FED is using secret back channels to create money by stealth and feed it to its favored banks here and abroad. So, for the first time in economic history we are facing stagflation for the middle and lower income people (who curtail spending as their ability to buy at higher prices diminishes) and continued price increases in consumer goods driven by those with deep pockets who can still afford to pay, and for those still on the receiving end of the FED’s new money (Wall Street insider brokers, speculators, and military contractors, and all those downwind of their spending). Even though housing sales and new starts are declining rapidly, high housing prices are only leveling off and declining slowly. In fact, I think real affordable housing will not happen again until there is a major recession or war comes and wipes out people’s money to buy big-budget items.
Stagflation is the normal result of high inflation (10-20%) because the majority of people lessen their spending and the economy deflates. That’s what keeps hyperinflation at bay, because people’s fixed incomes and salaries can’t keep pace with high inflation.
You only get hyperinflation when the government mandates (or allows) that everyone’s income and salary be indexed to inflation. That way even though salaries and pensions lag behind slightly, they rise quickly enough to keep pace with inflation. And that indexing pace accelerates the higher inflation gets. As everyone’s income rises, there is no longer as much resistance to price increases and thus, both prices and wages keep rising—hyperinflating.
We don’t have indexing in the US except for Social Security (SS), but even that Cost of Living Allowance (COLA) of SS is kept low by tying it to the downward manipulated Consumer Price Index (CPI). We do have an informal system of dealing with the kind of moderate inflation (7-9% annually for the last 20 years—the real rate) through labor supply and demand wherein workers begin to demand higher wages the worse inflation gets—but that always lags way behind inflation, as any salaried worker knows—especially when the government hides the real rate by a manipulated CPI. Even the new de-facto minimum wage of $15/hour now hardly seems to make a difference with today’s high prices.
Pensioners and retirees with no inflation rider to their monthly payments are being hurt the worst right now—especially when the government keeps creating money which flows first to favored Wall Street banks, and government contractors. All that money trickles down as it is spent into the economy. Those that get the first, second or third use of fiat money get to buy before prices rise. Later users, especially those on fixed income, face rising prices and suffer the loss of buying power.
The biggest indicator of stagflation is the steep decline in inventories among retail firms as well as the slump in shipping and trucking business, owing to fewer demand for consumer products. The Fall time period creates a peak demand for shipping as retailers stock up for the Holiday sales. But that peak is flat this year as most retailers are planning on selling off a lot of inventory and stocking up on less. Zerohedge.com covered this drop in demand for ocean shipping and trucking in detail here.
Inflation, Rising Interest Rates and the National Debt
In the fiscal year 2021 total interest expense of the federal government on the national debt and social security was $413 billion, with a low average interest expense of about 1.5%, against total federal income of $4 trillion. That equates to about 10.3 percent of federal income spent on debt.
I can remember when it was calculated about a decade ago that at the then current rate of deficit growth, the federal interest on debt owed would exceed total revenues by about 2030. That would mean technical bankruptcy. But that was assuming a total budget that was not growing exponentially like it is today. The 2021 budget was a whopping $6T with only $4T in revenue—creating a deficit of $2T which had to be made up with government debt.
Apologists for the debt used to say, “the federal debt is no problem, we just owe it to ourselves.” But that is fallacious on two counts: First, very few of us own Treasury Bills, Notes or Bonds. We owed it to those who did. Second, foreigners own almost 50% of the federal debt today so those interest payments are flowing out of the country.
The bottom line is, I don’t believe we will ever reach the point where the interest on the debt absorbs all federal income—because inflation continues to cause Americans to pay more in taxes as their rising income slowly rises and two, because each successive administration continues to raise their total budget even faster than the rising interest on the debt.
That is precisely why the FED can’t stop inflating the money supply—lest the interest on the debt catch up with revenues and force a US debt default. But that only works, as I’ll explain shortly, if the FED doesn’t monetize all debt—but increases part of the money supply secretly without debt.
Monetizing debt is about to get more problematic with higher interest rates. That’s why the FED artificially kept rates low for so many years despite 7-9% real inflation—to avoid paying high rates for T-bills, notes and bonds. Notice that the FY budget of 2021 interest debt was based on a rate of 1.5%. Now the Fed is having to pay twice that much in interest (2-4%) and that’s going to double interest payments to over $800B in the 2023 budget. But it still won’t ever catch up with government total income or spending which is rising even faster. Notice this analysis by establishment firm of Pete Peterson:
The United States has borrowed nearly $6 trillion in the past two years, in large part because of the pandemic and the response to it. The cost of that debt, as paid in interest, has actually declined during that period because maturing debt has often rolled over at lower interest rates.
Actually, it wasn’t $6T but over $13T that the government created (that we know about). Only $6T was monetized as debt. The other was created and given away secretly to Wall Street and foreign banks, to bail out the sagging markets or European problem banks. Even the $6T publicly admitted to was highly inflationary as much of that was given directly to people to spend as a Covid payment, but the other $7T is still working its way into the economy, adding to price inflation.
However, as interest rates creep up, interest costs will eventually rise. CBO [Congressional Budget Office] projects that interest costs will grow from $331 billion this year to $910 billion in 2031 — a nearly threefold increase.
That’s grossly understated. Total national interest payments could reach $800B next year!
Over the next 10 years, without any changes in current policies, [a big “if”] CBO estimates that net interest will total $5.4 trillion (over 10 years) and become the fastest growing component of the federal budget. In 2031, interest costs would account for 12 percent of the entire federal budget.
But that’s only a modest percentage increase over the current interest payment of 10.3% of the federal budget, and that’s assuming a budget of between $7 and 8T. I’ll bet the total federal budget will at least double that by 2031. The CBO keeps downplaying the inflation of overall budgets into the future which skews their analysis:
Over the next 30 years, the sum of net interest payments is projected to total more than $60 trillion; by 2051, that budget category would take up nearly half of all federal revenues.
Of course, that’s assuming their modest estimates for overall budget growth. There is no way, given the current federal direction, that they are ever going to let interest rate payments get to half of total receipts. In order to stop interest payments from consuming half the budget, they have to inflate the currency without monetizing all of it, and that’s what I believe they are doing. Any economist who believes the FED money supply figures anymore is very naive.
Furthermore, the US isn’t the only one inflating. In fact, every other nation in the world economy welcomes US inflation because they get to hide their own inflation hoping that their currency values will stay on par with the declining dollar. Everybody appears to win when exchange rates are staying stable relative to the dollar. The trouble is other countries are inflating more than the US (as a percentage of their economic output) and thus their currencies are falling relative to the dollar.
Britain is in a financial crisis of high inflation and a declining value of the Pound, which is one of the reasons the government of Liz Truss failed so soon after coming to power. The Euro is also falling against the dollar. How can that be given the US is in the highest rate of monetary inflation ever? Simple: The Brits and the EU are inflating even faster relative to the ability of their economies to absorb new money.
So is Hungary which is in a currency crisis of falling values. Even behemoth China is in trouble from overspending in its desperation to get its military ready for war with the West. King World News has that insight:
Big Trouble In China: We just saw the largest annual depreciation in the Chinese yuan in 27 years. China is much closer to having a full-blown banking and currency crisis than winning a hegemonic war against the US.
Wrong. It’s not “either or” but both—because China is spending for both war preparations and domestic programs without much restraint.
Gregory Mannarino writing for the Trends Journal: If central banks do not find another mechanism to continue to inflate, IMMEDIATELY, the entire global financial system will melt down. The current central bank-run financial system is 100 percent debt based.
What this means is a debt based financial/economic system can only function if more debt is constantly added/borrowed into existence—and the moment this stops, the financial system in its entirety implodes.
That’s where he and others are wrong. Legally, the world expects Central Banks to monetize currency creation by issuing debt, but the “other mechanism” Mannarino demands is already being utilized —pure fiat money creation without debt, but done in secret (except that it shows up in even more inflation).
War, expanding wars, Congressional acts/policies, disease processes, warp speed vaccines, drugs, engineered crisis after crisis, etc. are all mechanisms pushed upon an unsuspecting public to pull debt relentlessly and exponentially into the system.
Yes, these crises, purposely created by the Deep State, do justify more debt but all this demand new money for “government to save us” also hides the secret fountains of monetary creation which are exacerbating inflation. Most of it goes to bailouts of Wall Street banks domestically, and bailouts of European banks externally, which are off the books.
Currently the world is being sold a lie, which is inflation is running rampant because rates are too low. The fact here is simple: raising rates is meant to KILL demand, [in certain sectors] not lower inflation [overall].
To lower inflation, [in all sectors] all the Federal Reserve or any central bank must do is contract the money supply. If in fact the Federal Reserve really wanted to lower inflation, they would increase the capital reserve requirement of the banks, which currently sits at zero, this would contract the money supply.
The last thing that ANY central bank, especially the Federal Reserve wants to do in this environment is to contract the money supply, in fact, they want to expand it/inflate it. [Because that would collapse the entire financial bubble we are living in]
The power of any central bank resides in ONE THING: its ability to inflate, period!
That is why inflation will keep rising, despite interest rate increases—which only dampen a portion of the economy. Even if Trump wins in 2024, he can’t control what the FED does in secret, even if he understood the mechanisms (which he does not) and will face continued complaints of high inflation. Of course, the coming world war will change all this for the worse, and give the globalists an excuse to wipe away national sovereignty and debts and start over with a new global system—or so they think.
17 thoughts on “Inflation to stay; is the Fed literally printing money?”
Are All-Cash Home Purchases Keeping Prices Afloat in This Interest Rate Environment?
A recent report from the Attom Data Solutions showed that all-cash purchases continue to represent a sizable slice of home sales, accounting for 35.5% of all transactions in the third quarter of 2022.
That’s a near 2% jump from the same time last year, Attom notes, even though it’s down just slightly from Q2 2022.
Attom’s Rick Sharga predicts that percentage will continue to climb.
“Going forward if you’re able to buy a property with cash, you’re in a position of extreme competitive advantage over somebody who’s going to have to finance a purchase with mortgage rates at 6 or 7%,” Sharga recently told marketplace.org.
Money Magazine notes that the all-cash trend began with the onslaught of Covid.
“All-cash offers surged in popularity during the early days of the pandemic, when a crush of demand and a shortage of inventory forced potential buyers into fierce competition,” Money stated. “It was common for homes to sell well above their asking prices, too.”
Of course, all-cash purchases are not a possibility for most (although in Nassau County and West Palm Beach cash purchases are more common than not), and Redfin data clearly illustrates that they are largely a move made by the affluent.
Places with more affluent residents are seeing the greatest number of all-cash purchases, with Florida metros claiming half of the top ten list of places with the greatest percentage of all-cash transactions.
Nassau County, New York: 66.5%
West Palm Beach, Florida: 56.4%
Jacksonville, Florida: 45.5%
Milwaukee, Wisconsin: 45.3%
Fort Lauderdale, Florida: 43.3%
Orlando, Florida: 42.5%
Atlanta, Georgia: 42.4%
Cleveland, Ohio: 42.1%
Charlotte, North Carolina: 41.8%
Tampa, Florida 41.3%
But cash purchases are not solely being made by the wealthy.
Money Magazine stated that while all-cash offers are certainly a luxury, they “aren’t just coming from the super-rich or Wall Street investors. While those are part of the equation, many cash offers come from regular consumers — just average Joes down the street.”
Money said that buyers who sold an existing home for a serious profit thanks to significant price appreciation suddenly found themselves with the means to throw down an all-cash offer on their next home. And in other situations, buyers worked with a growing number of companies that have cash-offer programs designed to help homebuyers edge out the competition by helping them make an all-cash offer, for a fee, to be sure. So, while these purchases are recorded as cash, they are actually not truly cash as the buyer owes a fee or interest rate to the company that “gave” them the cash.
And then, of course, institutional investors are still a part of this all-cash shift.
Redfin noted that real estate investors bought a record share of properties in the fourth quarter of 2021, and since then their activity has remained strong, surpassing pre-pandemic levels. What’s more, nearly three-quarters of investor home purchases are made with cash – a figure that is certainly driving these recent all-cash highs.
Interestingly, some attribute remote work for contributing to the all-cash trend. A recent article by National Mortgage Professional on the topic suggested that the flexibility of the pandemic-inspired work-from-home life has given people the chance to make an all-cash offer, because “it allowed a record share of homebuyers to relocate from expensive to more affordable parts of the country.”
Now, with the pandemic behind us (according to some politicians), home price growth slowing and remote work here to stay, the housing market will need to time adjust to these new factors and react to how they play against inflation and rising interest rates. Will more people find ways to throw down cash offers to avoid paying nearly 7% interest? Maybe, especially if those cash-offer startups expand their reach and help them do it!
Homes still selling within a couple days of listing in my area of NH. No slow down.
The housing market in Strasburg Virginia is on fire. Everything is being sold. It’s incredibly beautiful out here and it’s not too far away from DC. I was in Lowe’s last night and I saw an effeminate white male in front of me on line buying some paint, and he was wearing a t-shirt with a DC non-profit logo on it. That’s my competition out here. I bet you he paid cash for his property as well.
Bernanke and Yellen have both testified many times that the Fed can not be audited because it would undermine its “independence.” (Example: http://y2u.be/pr1QTH-Il4w)
The Talmud teaches that all property on earth belongs to the tribe, and that any foreign laws are invalid. So if the tribe is using the Fed to funnel money to itself, it is doing something that is not only legal but morally justified.
That said, I don’t think that money printing is what is causing inflation. I see it more as centralized price hiking. You saw corporations all work together to promote BLM and pride, to implement Covid measures, and to leave Russia. Why can’t they work together to raise prices? Almost all board members are hand-picked by the SoS to promote the interests of the tribe.
Rank and file tribe members are protected from the price gouging due to their sinecures, interest free loans, and printed money from the government. But ultimately, this easy money for a chosen few is not what is causing the price of milk and bread to skyrocket. The inflation is the result of deliberate social engineering, which might culminate in the scripted “failure of capitalism” and the emergence of some sort of Great Reset communism.
I would say one way the Tribe would allow the Fed to be audited is when some kind of Eurasian equivalent bank was poised to replace it. That way, the Eurasianists could take the moral high ground and point to the Fed as an evil, corrupt, “colonialist”, Western system that needed to be abolished.
a) the capital reserve requirement has nothing to do with inflation. It’s a red herring. They could increase it a lot and nothing would happen, given the ridiculous amount of reserves banks currently have. Increasing the reserve requirement might increase interest rates (further) however. I suspect they may increase it again as they “start to signal risks to the banking system” or some crap like this.
b) If such monies were being created then we would expect to see them appear on a balance sheet somewhere, unless it is about physical cash (not likely).
c) This guy sounds 100% clueless on how the monetary system works, as well as the broader economy. The Fed is not able to do what he is describing from a technical perspective.
d) Someone is going to default. We’re likely going to see wide-scale household defaults without the expected deflationary bust due to the degree of scarcity. It’ll be the aged 60+ households who default in majority.
e) With regards to the reserve requirement, the only thing that is worrying here is how much interest rates are skyrocketing without there being any reserve requirements. It means that commercial banks are no longer willing to lend at low rates. It has nothing to do with either inflation or the Fed, but everything with the banking cycle.
Nothing that this guy is saying makes any sense at all to me. Show some data, show some graphs. This is just a dumb conspiracy theory. “buh buh the fed is handing out money so we have inflation”. Sure, who knows really, but it’s not convincing if there are plausible other explanations for the inflation and the current trajectory.
Rather than these stupid conspiracy theories I’d be more interested in someone who can tell me what the fuck this is:
So now the treasury is paying the Fed on net, rather than being remitted a large part of its interest payments? According to this the Fed is currently due more than 6 billies. I am not really following how this is possible
The guy is flat out telling us that they are literally printing money and not reporting it. They are printing Federal Reserve notes or electronic digits and handing them out to whomever necessary to keep the conspiracy going. I’m not telling you he’s correct, but what he is theorizing warrants contemplation.
If anything this guy is saying is remotely correct, it would explain the persistent inflation, plus it would make sense if we’re getting close to that global World War 3 force majeure. Explain to me why inflation is persistent. What’s the conspiracy?
You may think inflation’s fading, but take a walk into Lowe’s or Home Depot or the grocery store and you let me know inflations is being subdued. It is raging out of control. Every time I walk into the stores the prices are rising.
You may think a house is going to drop 50% in value but when they’re already selling for replacement cost how much lower are they going to go? Just like in 1980, the sellers evaporate and vanish like a fart in the wind.
This could be why the powers that be are making up all these excuses for the supply chain and all this other garbage. It would essentially be running cover for the printing. This could work for a couple years. And that’s all the time they need.
Sure I’ll contemplate it.
Supply chain issues + profit margin expansion + the ACTUAL money expansion that we see in the statistics ’20-’21 + the fiscal distributions + the current energy crunch = more than enough to explain the current situation.
In fact, I would argue we are still in a deflationary environment. The money supply grows at 5-6% per year, yet inflation has been around 2% for decades. Now it grew at 20%+ and we are at 10% inflation. That’s deflation, on a relative scale.
We may see lagged effects from the money creation (i.e. we are now much below trend on money supply growth and inflation is still not gone, so I could be wrong). What we can say is that the environment is at least legit inflationary for now, in the sense that CPI is rising faster than M2. This is a new thing. It’s likely caused by the ESG/energy crunch. We should continue to see near-term assets (deposits, commodities in particular food and energy) outperform long-term assets (incl. RE) until this is over. Only if this energy crunch is resolved quickly, within 6 months, are you going to avoid an all-out crash in household liquidity and thus housing prices.
I like to follow this indicator, it already toppled:
I don’t discard anything as possible, certainly not what mr. Skousen is saying, but I see no evidence and I don’t need this conspiracy to explain current events.
Besides the CEO’s of big companies, I’m seeing local business leaders state supply chain problems in media like it’s they are reading a script. Some are saying it is slowly improving, ya duh of course it is. The excuse something regular people can somewhat understand and accept as to what may be responsible for any problems. Besides the hundreds of billions of dollars going overseas to support who knows what, the 50 States are also getting quite a bit of that funding too. Supply chain issues and war funding, ya sure that’s the ticket!
Joel lost his expert war status when he sold the Hollywood production Ukraine wargame as a real event. He should have been showing otherwise.
The national debt doesn’t really matter does it? They can let it get much higher if they just keep printing and making excuses while kicking the can down the road.
Nevermind here’s the explanation.
I don’t think (((they))) really hide what they are doing, it’s much more satisfying to make it hard to understand the consequences of the moves that are being made.
I already pointed this out a few days ago. This could all be show. Plus you’re offering a Bloomberg article to counter the theory. They could be doing both. Monetizing and printing. All he was standing was that they’re trying to keep the interest payments low as a percentage of the total budget.. I don’t think it’s an either or proposition here.
Yes, I mean these “losses” the Fed (and ECB) is having are of course a “profit” for the treasury in a sense. After all the debtor is implicitly short the bond. However you get problems with this if the debtor does not have the cashflow to redeem. This does not seem to be an issue to me, although a crisis can be fomented to push out teh pension funds and the boomers from the capital structure (as they should be, they do not belong in here).
The only real PnL losses are those being borne by the pension funds and other private holders. And I suspect they will continue to bleed until they croak, and then when they have been thoroughly bled, will we dismantle the current system entirely, bonds will move to negative rates, and CBDC will be introduced for those who are not on any lifeboat. so that they do not rebel.
It’s not an either/or proposition I know. But again, I see no proof. It’s interesting to contemplate.
Not sure what’s wrong with reading Bloomberg. Of course it’s all propaganda, but that doesn’t make it categorically wrong.
Yes. I get it. Simple stuff. I no longer want to discuss it. Stop trying to continue to convince me. I only offered this theory, and it’s absolutely possible. Ask the Germans before WWII. Ask other countries throughout time.nowned by the same banking families. Nothing is impossible anymore. Nothing is off the table.
Just be careful about arguing from incredulity. As we move out to the force majeure anything becomes possible.
No worries, I’m just thinking out loud. I don’t care if you are “convinced”.
It’s an interesting theory but I see this as conjecture of the purest sort. You can just look at the increase in the Fed balance sheet and conclude all the money is going somewhere, it’s not rocket science. This part I agree with. Of course the system is 100% corrupt.
By the way monetizing is only possible with CBDC. Now they are monetizing within the commercial banking system. This does not “work” and is not really inflationary. It just bloats the government debt to infinity and beyond, as we have seem. Nothing has been monetized, and nothing will be monetized. This is an operation to dismantle the western governments in current form, maybe also other governments.
If you want to usher in a new world republic of some sort, you better make sure that the old republic is bankrupt wouldn’t you say? And you better make sure that all the benefactors of the old republic are appropriately sacrificed, no?
Now that sounds conspiratorial.
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