Plan A is inflation, plan B is depression.
As we outlined last month, the most read NYT article for 2021 was about languishing.
Unfortunately, things will get worse before they get better. After 50 years of policy blunders exacerbated by a clown-show in Washington today, there are only two choices.
Inflation or depression, the authorities are trapped.
They should know this, but are drunk on hubris, blinded by money-printing, schmoozed by lobbyists, and too busy insider-trading to care. If they understood this predicament, they’d have retired years ago.
The real problem? In the DC halls of power and its feeder universities, they don’t understand economics. Instead, they parrot dogma dressed up in complex math to justify central planning and fiat money.
Models that actually work (from the Austrian school) are ignored or obfuscated because they don’t consolidate power into a crony, captured system.
It’s like the Roman Catholic Church digging in their heals and developing wildly complex models to explain the observations of Galileo without conceding that the Earth orbits the sun and not vice versa (then having the audacity to persecute for heresy, sentencing him to house arrest until his death).
The narratives accepted as consensus — in economics and in public health (i.e. COVID policy) — are the ones that serve the powerbase.
You can “trust the science”, but you better also learn to follow the money.
Inflation or depression, how did we get here? Ludwig von Mises explained (in 1949)-
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
We warned of it five years ago. With consumer prices now roaring at 7% even by their own manipulated metrics (so, double that), we now sit on the razor’s edge.
US stock and bond markets are in an epic bubble, and can only be propped up with more money-printing. But that will cause the prices of beef, milk, eggs, rent, and energy to soar.
The inflation-genie is out of the bottle.
To put her back in, they need to stop the easy-money policies, but that will crash the markets, a cascade of debt-deflation (like 2008) that also torpedoes the real economy.
So, which will it be, inflation or depression?
It’ll be an epic tug-of-war as they try to thread the needle. They’ll tighten this year until things start to break, then panic and turn the money spigots back on.
But the money doesn’t flow evenly.
It goes to the cronies first (called the Cantillon effect). By the time it makes it into wages, prices already leapt ahead. The wealth gap continues to grow, a tale of two cities.
In other words, the beatings will continue until moral improves.
Elizabeth Warren, Kamala Harris, and Let’s Go Brandon will blame industry – the evil meatpackers, they’re making record profits while Americans suffer. Bomb-throwers on the right will blame labor; people won’t roll up their sleeves to earn an honest dollar, they just want more handouts.
They’ll do what crooked, feckless politicians do, point fingers while they raid the coffers, stifle the real economy with regulation, and choke on their own propaganda.
There’s no alternative to the two-headed monster, price inflation and/or debt deflation. If we don’t completely destroy the currency, we’re likely to get both.
The system needs a reset – there’s too much debt. They’ll try CBDC (an all-digital dollar), and when that fails, in the very end, they’ll have no choice but to fall back to a gold standard. The free market may move to Bitcoin before that, rendering them both utterly useless and largely powerless.
Amen to that, the rebirth of liberty by ending the fiat money regime.
Make sure to build your position in sound money first with gold, silver, and Bitcoin. Like Batman and Robin, precious metals and Bitcoin can protect your family through the coming storm.
Which is Batman, and which is Robin? Too early to tell, but it doesn’t matter if you own both.
Lift the veil for your children
Teach them not to fall for the lies. The problem isn’t your neighbors, or those on the other side of the political aisle. The problem isn’t the patriarchy, the police, terrorists (domestic or foreign), or race relations.
The problem sure as heck isn’t the unvaccinated.
The problem is a captured, broken system, with too much political power. But it’s deeper than that. From where does this power come? What rots at the very core of the American republic?
At its root is an unconstitutional, fraudulent, debt-based, fiat money system, the source of the world’s biggest, most intractable problems culminating now in upheaval.
It is it that spurs a colossal inflation-deflation reckoning, and the ugly push towards totalitarianism.
If you understand the mechanics, you can see the code in the matrix. You know how the distortions resolve. You can see the storm coming, and chart a course to protect your family. Godspeed!
If you’d like to see our own plans to create real security for our children, download our free Ultimate Guide below, then try our Better Bedtime Stories. Use that nightly ritual to open your family’s mind.
Want to raise empowered kids who see the code in the matrix, who know how the money system works, and how to use it? Kids who understand fiat, debt, the business cycle, Bitcoin, and the risk in groupthink?
Our line of Better Bedtime Stories does that. Join the Alliance and receive all of our books, three months apart, 40% off, in just the right order.
You’ll love them (so will your kids), or we’ll refund 100% of your money, and you can keep the first one anyway. No risk, and nothing to send back.
Want more like this? Try The Future of Money.