저자: FREENVESTINGREAL · 외국인
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what zero represents is Joe Biden's understanding of the U.S economy because he has no clue what's going on you can't brag about the fact that we had one lone month where high prices didn't get any higher it's not like they went down they just didn't go up but if people were struggling with high prices their struggle didn't get any easier it remained the same what would have been good is if prices could have come down but they didn't come down and in fact the only reason that the headline number didn't go up was because we finally got some relief at the pump gas prices came down but a lot of other prices food prices keep going up rents keep going up we are nowhere near done with this inflation problem it is going to be here for years and years and years probably the remainder of this decade and probably then some as they keep telling us this is a very unique recession in fact most people don't even want to admit that we have one but look at the recessions of the 1970s you had Rising prices there during backflation and that's what my forecast is remember last year I was predicting the U.S economy would be in recession in the first half of 2022 and very few people had that right but I also predicted that inflation was in transitory that it would get stronger as the economy got weaker and that is exactly what happened now the reason that I believe that inflation is going to kick into a higher gear as this recession that we are in gets worse is because I believe Powell is going to Pivot ultimately and he is going to give up his fight against inflation in order to fight a different Foe and that is going to be a recession and Rising unemployment and potentially a financial crisis either one that has already happened or one that is rapidly approaching and so I think Powell is going to choose what he believes to be the lesser of the two evils and I think he's going to pick fighting recession and propping up financial markets and monetizing government debt so the treasury doesn't have to default I think the FED is going to pick that over in inflation and so unlike the pivot that we got with volcker back in 1982 where volcker pivoted after a victory in his fight against inflation Powell is going to Pivot despite defeat inflation is going to win and so when we go back to zero percent interest rates or whatever we do and when we go to qe5 which is going to be launched I don't think the FED is going to shrink its balance sheet very much it's going to shrink it less than it did last time it tried to do it which is an impossible task given the bubble it's inflated I think when the FED goes back to stimulus and creating inflation when inflation is maybe double or triple or quadruple that two percent Target the markets are going to react very differently than how they reacted in the past because in the past the Fed was able to justify all this cheap money because they said we don't have enough inflation we're still below Target well when they go back to this stimulus when inflation is triple or more their target the markets aren't going to buy it and so I think all the inflation that they are going to have to create in order order to stimulate the economy out of this recession is going to ignite a powder keg we already have an inflation problem and Kyle's going to pour all this gasoline on it and so we're going to see inflation moving up to a much higher level even though it's already very high in fact it's probably double what the government claims in the CPI if you want to know what's actually happening in prices you've got to double what the government tells you and that's more accurate meanwhile labor force participation last month fell to 62.1 that is the low for the year and in fact over the last four months even though we've created all these jobs the number of people in the workforce has gone down and so that means that all the jobs that were created over the last four months were people who already had a job getting another job you know Biden claimed that we have a record number of people in the workforce he was mistaken we had more people working four months ago than we have working now the record high for the number of people working is before the pandemic so even though we've recovered the jobs that we lost prior to the pandemic it's only because the same people have multiple jobs we haven't recovered the workers we still have a lot of workers that were working prior to the pandemic that haven't rejoined the labor force we can't have a soft Landing because the soft Landing means we avoid recession so by that definition we've already crashed or it's a hard Landing it is what it is and so you have all these keynesians that somehow believe that inflation is caused by economic growth they also think it's caused by too many people working they think there's a trade-off between unemployment and inflation they think if there's not enough people unemployed you're going to have more inflation and a way to get rid of inflation is to put people out of work all of this is Keynesian nonsense inflation is not caused by the private sector it's not caused by growth it's not caused by people working the only people working that cause inflation are the people at the FED who are running the printing presses or pushing all the buttons that are creating all the money that's where inflation comes from and they create inflation in order to monetize U.S government debt so the federal government runs a big budget deficit the federal reserve prints up money to buy the those bonds and that inflation enters the economy it's got nothing to do with growth or people working as a matter of fact in a real economy the stronger the growth the lower prices because what is economic growth it means increased output it means more goods and services are being produced well if you increase the supply of something then you decrease the price so a productive economy that's producing more stuff means that the price of that stuff is lower the same thing with people working if more people are employed productively their productive output is increasing the supply of goods and services keeping the prices down if you slow down real economic growth if you force people out of work you're going to have less Supply we're not going to make as much stuff we're not going to be offering as many services and so therefore the prices of those goods and services all else being equal are going to go up Supply creates demand so if people are producing and putting goods and services into the economy well now they have the ability to share in that production they've earned money helping to create stuff and now they could spend that money to buy the stuff that they created and so the demand that comes from real production doesn't cause prices to go up the only kind of demand that causes prices to go up is when the government just prints money and gives it to people and so that money is not a function of production people didn't earn that money producing they just were sent the money by the government I mean that's what happened during covid to a huge degree you had people who had jobs and were working to help make stuff they went home they weren't working at all they weren't making anything but now the government sent them money they weren't earning money because they were they were being paid not to work but the worst part about it was many people were paid two or three times not to work than what they earned when they were working so now these people who weren't working at all had all this money to go and buy stuff but they didn't help produce any stuff that's what pushed up prices because you had all this fake demand and no Supply you see the proper monetary power policy response to the pandemic if everybody was going to stop working the FED should have Shrunk the money supply not expanded it the U.S government should have cut spending not spent more that would have balanced out supply and demand but instead we had the worst combination of monetary and fiscal policy probably in the history of the country in the face of collapsing Supply we flooded the economy with phony demand and so we're experiencing now I think just the beginning of those consequences we've got a long way to go which is why the idea that inflation has peaked is nonsense historically whenever they brand a piece of legislation whatever the name is the effect will be the opposite of that name so if a bill is called the inflation reduction act then you know right off the bat the effect of the bill is going to be to increase inflation and that's exactly what it's going to do first of all there's all this new government spending that's more demand artificial demand coming into the economy how is the government going to get all this money that it's going to spend because it's not going to get it from those tax hikes it's ultimately going to get it from the fed the FED is going to have to print more money to monetize those debts now even if the FED doesn't do that and the government has to find private buyers for those bonds well then it's going to crowd out investment in the private sector and so that's going to mean fewer things are going to be produced because the private sector is going to have less money to invest in capital and things to improve productivity and so that ultimately causes prices to be higher so will the increase in corporate taxes because to the extent that corporations have to pay higher taxes it comes at the expense of lower investment so if corporations have less money to invest in plant equipment and expanding Supply that ultimately puts upward pressure on prices what the government needs to do to reduce inflation is reduce government spending we need a bill that cuts government spending the government is doing the opposite they are increasing government spending so what they're doing is they are throwing gasoline on a fire that's already burning hot the government makes everything more more expensive it's the free market that makes things less expensive so if we want to help put downward pressure on prices we've got to get government out and let the free market in now in fact they may be cutting interest rates before the end of this year but it's not going to be because they've won a victory over inflation it's going to be because the economy is in a much more severe recession than the one it's in right now in other words this recession that's here is going to get worse and that's going to force politicians to try to do something you know once the political pressure is greater because of unemployment and the economy then the FED is going to switch its attention from inflation but the inflation problem is not going to go away it's just that this other problem is going to loom larger in the eyes of the fed and I think what's driving the markets is this bad news on the economy is good news for the markets because it means the FED will pivot sooner and before it pivots it will raise rates less than it might have raised absent the bad economic news and again you still have all of these keynesians out there that think bad economic news is good news on inflation they think the weak economy will weaken inflation it won't it is going to strengthen inflation especially when the Federal Reserve and the government respond to the weakening economy with more stimulus because that stimulus is inflation so they're going to start creating more inflation even though we already have too much inflation and so the problem is going to get much bigger than the markets understand I still think this is an overall bear Market I think that rate hikes are going to continue to take their toll but so will inflation I think inflation is going to harm a lot of companies that have a problem dealing with it I think a lot of demand is going to be destroyed for a lot of discretionary items because people are going to spend all their money on food on energy on insurance on rent on taxes well I think the nature of this financial crisis is going to be a lot different than the one we had in 2008 because I don't think the FED is going to allow it that's one of the reasons I believe that Powell is going to Pivot because if the FED does keep raising rates we will have a financial crisis that looks like 2008 only much worse because 2008 was about bad debt it was about people borrowed money and they couldn't pay it back and the collateral for the loans was no good because it was real estate and prices went down well we have much more debt now than we had in 2008 I mean by an order of magnitude everybody has more debt than they had back then and so this is going to be a much bigger crisis when the defaults start and all those banks that were too big to fail that were bailed out in 2008 they're a lot bigger now and when they fail it's going to be a lot worse except with inflation too high and the FED fighting inflation there are no bailouts there's no tarp 2.0 all these banks are going to have to be allowed to fail and that means customers are going to lose money not just stockholders or bondholders the customers are going to lose money because the FDIC doesn't have any money unless it gets it from the fed and the FED isn't going to be giving out money if it's fighting inflation it's taking away money so I believe the FED is going to Pivot to prevent that massive financial crisis and so what we're going to get is a sovereign debt crisis and a U.S dollar crisis so so it's going to take the form of a crashing dollar and so the people who are going to lose money are not the people that are just holding subprime mortgages but the people who are holding U.S treasury bonds or any Bonds denominated in US dollars or even people that have US Dollars stuffed under their mattress you know the dollar has risen so far in the early stages of this big inflation because investors are still delusional about defense ability to contain inflation and bring it back down to two percent when they wake up to reality that inflation is going to be way above two percent indefinitely then the dollar is going to fall through the floor and then things like gold and silver will go through the roof remember in 1971 the U.S defaulted on its obligations because Nixon took us off the gold standard but prior to that if you own a Federal Reserve Note and you were a foreign Central Bank you owned an obligation of the United States government to pay you gold Federal Reserve notes were notes for gold and the U.S government defaulted on those notes we told all of our International creditors we promised to pay you gold if you had 35 dollars we promised you an ounce ago all and they did a couple of devaluations first but that wasn't enough and then Nixon said you know what we're going to default completely we're going to give you no note gold for your notes we're going to pay nothing so that was an official default and then gold went from 35 an ounce up to 850.
so people who had U.S federal reserve notes thought they were going to get a certain amount of gold they ended up getting a fraction of that gold because the value of the dollar imploded relative to Gold because we defaulted on that promise and I think it's going to lose its status as the reserve currency and that is going to be a game changer for the US economy because we rely on the ability to exchange the paper we print U.S federal reserve nodes dollars for the goods the rest of the world produces we don't have to produce Goods in exchange and that's been the free ride that we've had on This Global gravy train and that's going to come to an end and that's going to have profound implications for the US economy and the standard of living of America
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