저자: Plain Finance Reborn · 외국인
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That's exactly what the Fed is going to do. Unfortunately, you know, when the Fed is surprised by the fact that we go into a severe recession and inflation actually gets worse, right, which is a situation that they think is impossible. They think, well, if we go into a deep recession, at least we won't have inflation to worry about anymore and we can just go back to what we've been doing, which is creating inflation.
But if we go into a severe recession and inflation is still high, well, I mean, you know, they're out of tricks, right? But I think that despite that, when push comes to shove, the Fed is going to pick the poison that it thinks is the least toxic, right? And it's going to say, you know what, inflation is bad, but a financial crisis and a depression is worse.
So, we're just going to have to have more inflation. we're just not going to get back down to 2%. Maybe 3 or 4%, whatever they're going to say. But hey, we're never going to get to two because the cost of getting there is is too high. So, we're just going to have to get used to living in a world with higher inflation because it's better than the alternative.
Now, it's not better than the alternative. It's way worse. But the Fed and the government won't won't know that. And even if they do know that, all they really care about is the short run. And yes, if the poison they pick is inflation and they go back to QE and they cut rates, even though inflation is still high, the short-term pain will not be as great as if they did the right thing and continued the inflation fight.
In fact, turned it into a real fight with big cuts in government spending, which is, of course, you're not going to fight inflation unless you get rid of these deficits. So, we need uh spending cuts. Uh maybe tax increases if we can't get spending cuts. Spending cuts are my preference. Uh tax increases would be the next choice.
And not on the rich, unfortunately. That's not going to work. So, you got to raise taxes on the middle class and the working poor. So, you know, I'd rather cut spending to do that. Uh but the inflation tax hits the poor harder than, you know, a sales tax would. When the politicians have to decide paying now or paying later, well, that's a no-brainer for the politicians.
It's pain later because later I might not be in office anymore. In fact, if we have pain now, I won't be in office cuz I'm going to lose the next election. So, the way to minimize my own pain as a politician is to kick the can down the road, right? So, I'm going to do whatever it takes to get me reelected.
So, if inflation now means pain later instead of now, even if it means some pain now, but the worst pain is later on, that's what I'm doing. the politicians will always sell out the long-term interests of the country for their own political benefit. And so that's what's going to happen. And the central bankers are really no better than the politicians.
I mean, they're really political animals there. And and they're going to make the same choice. They're going to choose pain later because, you know, as far as PAL is concerned, hey, I'm just going to finish out in my term and it's somebody else's problem, right? I don't blame me, right? I, you know, I don't want to be the one that gets blamed for all this pain.
Let let let it happen on somebody else's watch. The only time that they will do the right thing potentially potentially. I mean it's not a guarantee, but let's say we're at a real crisis, right, where the dollar is imploding, prices are skyrocketing, right? Inflation is I mean it we're on the verge of becoming, you know, Argentino or Zimbabwe, you know, where it's like, you know, it's going to be awful with, you know, price control shortages, riots, looting, you know, civil unrest.
I mean, things are just I mean, it's just like an apocalyptic environment, right? In that environment where it's like crap, you know, no matter what we do, we're screwed. Maybe then they'll do the right thing. It's like only but they're going to exhaust all the other possibilities. They would have done everything they could possibly do wrong.
And then it's that, okay, no matter what we do, we're we're we're screwed. Maybe then they'll do the right thing, assuming they understand what the right thing is. I mean, I'll be there to tell them, you know, but the question is, you know, will they listen? This going to lead me into the next question here is like what is it that they are going to do for this next issue or what is it that they are planning on doing to create like the moni monetary stimulus or whatever that's coming central bank digital currencies.
What's going on here? I mean this seems to be pushed worldwide and almost guaranteed to be coming. Yeah, but that's more an element of government control than than monetary policy. Although it may make it easier for governments to inflate the money supply and to try to target their so-called stimulus uh because you know sometimes they get frustrated.
They they send people stimulus checks and they don't necessarily spend the money. Oh my god, maybe they save it. And so what they could do is say, "Hey, we're just instead of stimulus checks, we're going to give you some digital money with an expiration date. So here's your, you know, we're going to load up your wallet and you know, you got 24 hours to spend it or you lose it, right?" today everybody's like you know but then they might say okay you can spend it but here's the only places that it's good right I don't know they might try to m micromanage oh you can't use your money to buy a gun you can spend it at Walmart or whatever I don't know but I mean the part that I don't like about government issued you know digital currency as long as they don't eliminate cash right then it's not as big a deal but they want to eliminate cash that's what their goal is is to get rid of all the bills so you have no alternative But that digital currency and the reason I don't want to live in a world where you're stuck using a digital currency for every transaction you make and there's no way to transact in private is that the government knows every single thing you spend money on.
And that can give governments a lot of information about you. Even if you're not spending the money illegally for the government to know everything that you like, every cause that you support, every you know, everything that you do, they can create a profile of you and potentially that that they could use that profile in ways that could be harmful to you.
And you know, a lot of the things that you're doing today with your money may be legal, but what if they're illegal in the future? Because people just assume that governments are benevolent and they're and they're good, but they tend to get very corrupt and and get very evil. And a lot of times the governments become the bad guys and the resistance is the good guy.
And how do you overturn a corrupt government? Well, it's a lot more difficult if that corrupt government knows every single thing you're doing and can see all the places that you're spending your money. Uh, and and and they can crack down on anybody that becomes part of a resistance. And and once the government knows that it's harder for the people to resist tyranny, well, they're more likely to become tyrannical.
So, it becomes a self-perpetuating prophecy. You know that Lord Actton said, "Power corrupts. Absolute power corrupts absolutely." And so the more power you give government, the more corrupt government becomes. So you always want to be vigilant when it comes to government. You don't want to give up your liberties uh just because you know you'll get some extra safety.
And because what the politicians are going to say is, "Oh, if we just eliminate cash, we'll make it harder for the drug dealers and the terrorists and the money launderers." And maybe that's true. But you know what? They're going to we're going to we're going to lose a lot of our individual rights and freedom.
and it's just not worth the trade-off. And you know, from my perspective, being in the financial service industry, I already see through uh this charade, all of the anti-money laundering that we have now, the laws on the books, all that stuff. Yes, they say it's here because of terrorists and and and and drug dealers and criminals, but that that's just to for the public to get them to approve the the laws.
The one goal that all these governments have in mind, the the criminals that they really want to catch are the people not paying their taxes. That's really what they're going after, right? Uh they want the tax money. And so they think that if they eliminate the cash economy, then they're going to collect more taxes because there's still a lot of people today that do some work under the table, get paid in cash.
That's who the government is going after, not the drug dealers, right? It's the guy that's driving his Uber and he's getting some money in cash or he's doing some odd jobs. And you know, that's why they now want uh all these uh payment companies to report all these small transactions like $600 or more.
You know, they want all these transactions reported. Why? Because people were were having income and they weren't uh paying taxes. And yeah, I mean, I guess a lot of these people are breaking the law, but a lot of people are in a situation where if they don't break the law, they don't eat. I mean, there are some people that, you know, hey, I, you know, this is what I've got to do to make ends meet because if I paid taxes, I couldn't earn enough money after taxes to cover my expenses.
So, the only way I could I could do it is uh to to not pay the tax. And I'd rather have somebody working and not paying taxes and just sitting on welfare. I mean, because you know that at least they're productive. At least they're providing goods and services. And you know, when the government says we we need all these IRS agents to go after the rich, that's a lie.
They're not going to go after the rich. They're going to go after the middle class. They're going to go after the small business owners. No, those are the ones that are cheating. The rich don't have to cheat. They have loopholes to reduce their taxes. The average guy doesn't have a loophole. So, his loophole is, well, I'm going to make some money on the side and I'm not going to report it, right?
Or I'm going to exaggerate some of my deductions. But you know, the minute you you eliminate cash, they crack down on uh on that the underground economy.
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