저자: PeterSchiff · 외국인
요약 보기
정부의 국채 디폴트 가능성과 대규모 화폐 발행이 인플레이션을 악화시킬 것이라고 주장. 인플레이션은 통화량·신용 팽창이며 물가 상승은 그 결과라고 설명. 금 가격이 2000년 300달러대에서 4000달러 이상으로 올랐지만 실질 가치로는 과거보다 낮다고 언급. 연준의 양적완화가 인플레이션을 만들었고, 향후 달러 급락과 경기침체 필요성을 주장. 금·은 보유를 강조하는 결론.
다듬은 글
The government can say, " You know what? We're not going to pay you in a year. We're going to pay you in 30 years." So now you have a 30-year bond. This is actually a default, because you won't receive the money when you expected. And if the government does that, your bill that was worth a dollar will probably be worth 40 cents, right?
Immediately. Because now someone will have to wait. And they can freeze the coupon. Or they can lower the coupon. Well, they might say, "Okay, you bought a bill at 3.5-4%...now you have a 30- year bond at 4% . Or they could just say, " You know what? We were going to pay you 4%. Now we're paying you 1%.
And what are you going to do? You can't sue them. So they can do pretty much anything they want. So they can default. I mean, there are different ways to default. Like, " Yes, we'll pay you back , but in 30 years, not in 30 days." And we're not going to pay you 4% or 5%. We're going to pay you 1%. That really destroys value.
But if they don't want to do that, they're just going to print a lot of money, which I think is more likely, which means that inflation is going to go from being a bad problem to something much, much worse. Yeah. So people think we've had a lot of inflation in the last 4 or 5 years. That's nothing compared to what's coming in terms of all the money they're going to have to print.
Because I think, that the world would stop lending us money, stop buying Treasuries because the yields aren't high enough to reflect the risks, because they're going to get worried about the huge debt, the trajectory of it, and the fact that nobody's going to do anything about it. I mean, even the Republicans, right?
They campaigned on fiscal responsibility. We need to shrink the government, reduce the deficit, but that's not how they run their government. So the Democrats, of course, you know, they want more government. They want, you know, government spending to go up. So they're not fiscally responsible. So if nobody wants to be responsible, why would anyone want to lend us money?
And I think the Federal Reserve would have to buy a lot more bonds to keep rates from going up, which is what they would do. So they wouldn't have to talk about inflation. Because quantitative easing is inflation. Yeah, but quantitative. That 's right. First of all, inflation, because a lot of people...
a lot of people don't even know what inflation is. People think that inflation is an increase in prices, and that's how it's meant to be, but it's not. If you take an older dictionary, even from the 1970s , Webster's dictionary, and you look up the word " inflation," it says: expansion of the money supply.
That's what it is . Uh, and it's also credit. Expansion of the money supply and credit, because you can buy things on credit even if you don't have the money. So money and credit, expanding it, you create inflation. Uh , and that's what inflation is. That's the root of the word, "to inflate." Um, prices don't inflate.
They can go up, they can go down, but you can't expand the price the way you expand the money supply. So what happens when you expand the money supply? You get more money, prices go up. So rising prices are a consequence of inflation. They are not inflation itself. They are a result of inflation. The reason the government has tried so hard over time to change the definition of inflation is so that the public doesn't know where the hell it's coming from.
Because if you think inflation is rising prices, then you blame whoever is raising the prices. You blame the greedy gas companies, or you can blame anyone, business . But the only reason business raises prices is because the government creates inflation, which makes their costs go up. And because their costs go up, which is their prices, they raise their prices for consumers.
So that allows the government to create inflation, but blame it on someone else. So when they did quantitative easing, it was inflation. They said, "You know what? We're going to try to get out of this problem with inflation." We are going to print a bunch of money to stop the fall in housing prices and the fall in the stock market.
And they did . But they also caused consumer prices to go up. Although, you know, they would actually go down, because people think that inflation is when prices go up, say, 2-3% a year. But if the government hadn't created inflation, maybe they would have gone down 3%. Of course. So the effect of inflation is not just that prices went up 3%, but that they did n't go down 3%.
It's 6%. That's 6% more than you would have paid in the absence of inflation . And you know, the government is trying to argue that we need prices to go up. That's part of the rationale for why they're creating inflation: they say prices should go up 2% a year. Why? Why, why do we need that? Why can't they go down 2%?
Why do they have to grow by 2%? So what's their argument for that ? Well, they have a lame argument. I mean, the argument is that if prices don't go up, people won't buy anything. Mm. So that's complete nonsense—that we only buy because we're afraid of prices going up . Because we buy what we need and what we want.
And if prices went down, that would be great. We'd buy more because we could afford it. I mean, everybody wants the cost of living to go down. Nobody wants prices to go up, except the government. And they're saying that's what we need. And the only time you don't buy something is when you can't afford it.
And the way you can afford it is if the price goes down. So if something goes down, you can buy it. If you can't afford something and the price goes up every year, you might as well never buy it. They're also saying that businesses can't make money if prices go down, which is nonsense, because businesses care about margins, not prices.
So if their costs go down and prices go down, they can actually make more money at the same margin because they're increasing sales. You can always sell more at a lower price. That's why everyone tries to lower prices to sell more. So that's just nonsense, to say that we need rising prices. We do n't.
I mean, the economy was experiencing falling prices. If you look at the CPI in 1800 and compare it to 1900, it was down 50%. That's the consumer price index. Yeah. So you probably won't see a graph that goes back that far, but prices in 1900 were half what they were in 1800. Do you remember that? Well, I wasn't there then, but you know, it's funny, because I talk to my kids and I say, "Hey, I remember when I was your age, it only cost me a dollar." That's right.
And my father said, " When I was your age, it only cost five cents." Right? People always talk about how cheap things were. Well, in 1900, when grandparents would talk to their kids, they would say, "You know, I remember when this cost 10 cents. Now you can buy this for five cents." Right? Because things were getting cheaper, but the economy was getting stronger.
We had an economic boom in the 1870s, 1880s, 1890s, right when prices were going down. That was the peak of the Industrial Revolution. Yeah, that's, you know, even Trump talks about it as the height of American dominance, and, you know, that's when we had the fastest growing economy in the world. And that was when we didn't have a government.
In We had a tiny government. We didn't have an income tax . We didn't have a Social Security tax. You know, we didn't have any government agencies or departments. It was, you know, small government. There was no income tax then ? No. Wow. No, income tax came in 1913. So how did they pay the government's bills?
What was their... their number? The government was tiny. There wasn't much to pay. They had certain duties. They had, um, you know, some alcohol taxes, firearm taxes, tobacco taxes. The government ran on excise taxes. There was no, you know, no, no one filling out tax returns . So people were actually buying goods to support the government's revenue, instead of the government collecting direct taxes.
Right. And there was no deficit. The government just spent what it collected. That's good. And the government was small. I mean, nothing special. It was secondary. And we were, you know, a free country. That's why people came here from all over the world: they wanted freedom. They didn't need government programs or, you know, handouts.
They just wanted to be left alone. And that's when we had a really booming economy. But going back to your question about quantitative easing. So quantitative easing was inflation. And you know, the current chairman of the Federal Reserve, Kevin Warsh, is right when he says that inflation is a choice.
And it's a choice that central banks always make, because from their perspective it's the lesser evil. I think it's actually the greater evil, but from a politically advantageous position, it's better for politicians to create inflation. So the policy after the 2008 financial crisis was to create inflation.
Which they did. Yeah. And you know, if you look at the price of gold in 1999-2000, gold was lower $300. An ounce? Yeah. Now it's over $ 4,000. And the reason for that is because we've devalued the currency. We've created so much inflation that it takes more dollars to buy an ounce of gold. Now the stock market, the Dow, is about 50,000, and in 2000 it was 10,000.
So the Dow has gone up 5 times. Mhm. But gold has gone up more than 10 times in the same period. So that shows you that yes, we've created a lot of inflation to drive up asset prices in nominal terms, in dollars, but in real terms, in real money, in gold, the market is much lower than it was 25 years ago.
Lower? Yeah. Not even... Much lower. It's half of what it was. Wow. And that's why everyone's talking about affordability. We have an affordability crisis because the government has destroyed so much of the purchasing power of our money. And they did that, you know, to bail out the banks and the stock market in 2008.
They did that again during COVID, right? They printed a crazy amount of money in 2020. The Fed's balance sheet doubled in 2020. We flooded the economy with inflation. That's why prices skyrocketed in 2021 and 2022. You know, Trump and the Republicans want to say, "Oh, it's all because of Biden." I mean, it was n't because of Biden.
The policies that caused prices to rise were under Trump. It was, you know , Trump's last year, 2020, when we had COVID. And that's when the budget deficit exploded because of all these stupid government programs. Like what? Well, you know, the PPP Paycheck Protection Program, or whatever it was called, or the stimulus.
But, you know, the Fed cut interest rates back to zero in 2020. So we've really accelerated inflation. There's a lag between the creation of inflation, which is the expansion of the money supply and credit, and its impact on prices. Mhm. So we've created inflation under Trump. It's been manifesting itself in price increases mostly under Biden.
But if you look at the CPI chart and you see when it really started to accelerate, it was in the last three or four months of Trump's presidency. And then it continued. And it was accelerating even before Biden's first bill was passed . So even if Trump had served two terms in a row, if he had been elected president, the same thing would have happened.
Inflation would have been just as bad if Trump had been reelected then as it was under Biden. And I think it's going to be even worse now than under Biden, because we're going to see a big drop in the dollar when the Fed has to start quantitative easing again. You know, Warsh said that inflation is choice, and he's going to make the same choice.
He's going to make that choice for the same reason that... Greenspan chose inflation, for the same reason that Bernanke, Yellen and Powell did. They all chose it because the alternative was a stock market crash, a bond market crash, which we needed, a housing market crash, a major recession, high unemployment, a financial crisis.
Well, unfortunately, we need a lot of that . Because the whole economy is screwed up from years of artificially low interest rates and inflated asset prices. The economy has suffered because of what the government has done. And the free market forces have not been allowed to operate. So we have all kinds of imbalances in the economy, bubbles , you know, misallocation of resources.
Because of this flawed monetary policy, so many mistakes have been made that to correct, you know, would lead to a major recession, bankruptcies and a significant increase in unemployment. It's going to be very difficult to correct what broke the government.
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