WASHINGTON — News broke yesterday that the official government narrative says that inflation is at 7%, the highest rate in four decades.
Of course, anyone who believes that number has way, WAY, too much trust in their government. Using the 1980 method for measuring price inflation, the rate is at an all-time high over 15%, according to Shadow Stats. And the rate has been above 7% nearly every year since the mid-1990s if an honest rate were provided to the American people.
Economist Peter Schiff likened the situation to a “runaway freight train.”
Jerome Powell, Federal Reserve chairman, is saying that he wants to fight inflation but he also wants to keep pumping out easy money to get people to spend, spend, spend. That, of course, is insanity. But that comes from someone who thinks the supply chain crisis will end this year.
“You can’t put out a fire with gasoline. But that is what Powell is bluffing that he is going to do,” Schiff said. “In other words, even though the Fed, or Powell, has claimed that they were wrong about inflation being transitory, they’re basically still clinging to that lie. Because they’re just saying that the transition is going to take longer than we thought because they think the inflation problem is going to take care of itself.”
Schiff added: “The Fed is living in this fantasy land and they just think, ‘If we print it, the supply will come.’ They think we can keep on with our easy-money supply, but just eventually, the goods are going to be there. As long as people want to buy stuff, eventually, the stuff for them to buy is somehow going to magically appear. It doesn’t work that way. Stuff has to be produced before it’s consumed.”
These problems are just the beginning. No matter how much people want to blame Joe Biden, and he is indeed making things much worse, this is coming from decades and decades of arrogance at the Fed. The easy money policy is nothing new.
The fundamental economic, fiscal and monetary problems were here before COVID-19. It’s been a bubble economy for some time now.
“We really couldn’t survive the economic downturn,” Schiff said. “So, the Fed bailed us out with more money printing. You know, we haven’t been innovating our way out of crisis. We’ve been printing our way out. But we’ve printed out way into an even bigger crisis because now we’re paying the piper. Because this inflation acts as a lag. In fact, I think we’re still dealing with the inflation that was created before the pandemic. Wait until we catch up to the even greater inflation that we created after.”
Included in the post “pandemic” response was the monstrous CARES Act. Rep. Thomas Massie (R-Kentucky), who stood up to leadership in both parties to oppose it, recently reminded the public of how bad that legislation was in a Tweet:
“In March of 2020, I tried to keep our country from going over the COVID insanity cliff. For that effort, (Nancy) Pelosi called me a dangerous nuisance, (Donald) Trump said the GOP should throw me out, and Reps (Liz) Cheney & (Adam) Kinzinger maxed out to my political opponent…. Too many people failed to see the bill being passed would cause massive inflation, it’s passage without members present would set the tone for nationwide mail-in ballots, the money would enable all of the lockdowns, and paying people not to work would kill productivity in the US.”
There’s no ceiling to how high the price inflation can go. As Schiff has noted, Americans have little to no savings, and the price inflation is robbing them of what little they have.
“That robber is the government, because it’s the government that’s creating the inflation that is causing the cost of living to go up,” Schiff said. “But the cost of living is going up, yet consumers have even less savings to afford that increase in the cost of living.”
Schiff added: “Either the government is going to have to supply the money or the spending is not going to happen. So, either we have a recession, or we have even worse inflation. Because if the government has to print more money to fund more stimulus spending so that consumers can afford to keep buying stuff at higher prices, well then we have an even bigger inflation problem on our hands.”
There are solutions to this if anybody will ever listen. That is get the arrogant, fallen humans away from controlling the money supply and return to real money, gold.
“State-controlled money is immoral, dangerous, and impoverishing,” Ryan McMaken wrote for the Mises Institute. “It paves the way for government theft of private wealth through the inflation tax, and thus allows the state to do more of what it does best: wage wars, kill, imprison, steal, and enrich the friends of the regime at the expense of everyone else. Privatizing the monetary system and imposing a ‘separation of money and state’ would help limit these activities.”
And maybe a little off topic, let’s end the IRS as well. As Zero Hedge reported, they’re worried about having a frustrating tax season because of massive backlogs. Let’s ease their frustrations by putting them out of business.
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