In recent economic news, headlines have been dominated by concerns about rising bond yields. The increase in bond yields is a sign of a possible spike in inflation and, logically, they are calling on the Federal Reserve to raise interest rates in order to prevent this inflation.
Higher bond yields also mean that there is a competitive alternative to stocks for investors – two factors that could trigger a drop in the stock market.
If we study the real behind the stock market crash during the Great Depression, they will discover that it was the Federal Reserve’s interest rate hikes that caused and prolonged the catastrophe after creating a cheap and easy money environment throughout the 1920s Former Chairman Ben Bernanke openly admitted the Fed was responsible in 2002 in a speech honoring Milton Friedman. He stated:
In short, according to Friedman and Schwartz, due to institutional changes and misguided doctrines, the bank runs of the Great Contraction were much more severe and widespread than they would normally have occurred during a recession. Let me end my speech by slightly abusing my status as the official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did. We are very sorry. But thanks to you, we won’t do it again.
This then raises the question – inflation or deflation? The Fed “will it start again?”
Probably not in exactly the same way, but soon we will see elements of inflation and deflation in the form of stagflation.
It’s a catch-22 that the central bank created, and many (myself included) believe the Fed deliberately created the conundrum. All central banks are linked together through the Bank for International Settlements (BIS) and the BIS is a globalist institution through and through. The globalist agenda seeks to trigger what they call the “big reset,” a complete reform of the world economy and capitalism into one world socialist system… run by the globalists themselves, of course.
In my opinion, the Fed has always been a sort of institutional suicide bomber; its job is to self-destruct at the right time and bring down the US economy with it, all in the name of spreading its sectarian globalist ideology.
The only unknown at this point is how they will proceed with their sabotage. Will the central bank continue to allow inflation to explode the cost of living in the United States, or will it step in with higher interest rates and allow the stock markets to collapse?
Either way, we are facing a serious economic crisis in the near future.
Rising inflation means economic recovery?
Mainstream economists will often argue that rising yields and inflation is a “good thing.” They say this is a sign of rapid economic recovery. I do not agree.
If “inflation” were the same as “recovery,” there would not have been a total economic collapse in Argentina in 2002, Yugoslavia in 1994, or Weimar Germany in the early 1920s.
I do not see any recovery. What I am seeing is the rapid devaluation of the purchasing power of the dollar due to the massive printing of fiat through stimulus measures. The Fed and the US government are buying a short-term surge in economic activity, but at a hidden cost. This is a condition that the Dollar Index does not even begin to address, but which is evident in the prices of necessary goods and commodities.
Keep in mind that this is all done in the name of responding to the pandemic. The pandemic is the ultimate excuse for the active destruction of the US economy. Stimulus packages turned into random helicopter money, with billions siphoned off mostly by big business and fraud. People calling for a $ 2,000 relief check from the government have no idea that corporate welfare has been going on for a year, as well as billions of dollars in retroactive tax refunds. All this money printing is going to cause damage somewhere. It cannot be avoided.
It’s not about the pandemic
Let’s start by clarifying something: the pandemic is NOT the reason for the stimulus flood. The pandemic has done very little to do real business in the United States. locks it did most of the damage.
Think about it for a moment – federal and state governments crushed the economy with lockdowns, then came up with the solution of sweeping stimulus. This in turn destroys financial stability and generates rapid price inflation.
Conservative states and counties that have refused to shut down are recovering at a much faster rate than left-wing states that have imposed draconian restrictions on citizens. Yet the lockdowns have done nothing to stop the spread of COVID-19 in the Blue States. So the lockdowns did not bring any discernible benefit to the public, but they gave the central bank a perfect rationale for further eroding the dollar.
This resulting price inflation is something that even the Red States cannot escape.
For example, house prices rise rapidly beyond the 2006 market bubble. Part of this is because millions of people are part of perhaps the biggest migration to the United States since the Great Depression. Anyone who can do this leaves the big cities and settles in the suburban and rural areas. But house prices have also historically been in the habit of inflating with the devaluation of the currency. The cost of maintaining and renovating an older home, or building a new home, increases as the prices of commodities like lumber rise.
And timber prices are certainly inflating! Softwood lumber prices increased at least 110% from a year ago and increased by up to 10% within a week.
Home rentals are also not immune to inflation, as the rising cost of maintaining properties forces landlords to raise rents. The only places where rents are falling are the big cities Americans are looking to flee, like New York and San Francisco.
Inflation in more than housing
The majority of commodities continue to experience price inflation at all levels. Food and energy prices have skyrocketed over the past year. Governments are once again blaming the pandemic and “supply chain strains”, which may have been a credible claim nine months ago, but not today. All that hides the fact that all these stimulus measures have inflationary consequences.
The devaluation of the dollar is most visible in terms of imported goods. In other words, it costs more dollars to buy goods outside of the United States as the value of the dollar declines. And since the majority of American retailing is supplied by foreign producers, that means average American consumers will bear the brunt of the inflationary consequences. The stress and anger of the public will be high.
Pandemic lockdowns are just an excuse
This is why the COVID-19 lockdowns must continue and the pandemic fear factory must remain active. Globalists need a cover event for the reset and they need to keep citizens in check, and the pandemic can be blamed for just about anything. I think this is why we are already seeing the media exaggerate the existence of “COVID mutations”. Don’t be surprised if the Biden administration attempts to implement a nationwide lockdown this year in the name of stopping the spread of a ‘deadlier’ COVID-19 variant.
It doesn’t matter that previous lockdowns were unnecessary and all the data shows that keeping the economy open is superior policy. It may seem that logic goes completely out the window, but there is a very logical reason for what is going on in the minds of globalists.
Stagflation comes into play through losses in certain sectors of the economy, high unemployment and the inability of wages to keep up with costs.
There is the continued dismantling of the small business sector which, again, I believe, is being destroyed on purpose. It’s not a mistake that small businesses were primarily targeted as “non-essential” during lockdowns. It is also no coincidence that the majority of COVID-19 PPP loans went to large companies while small companies received next to nothing. The small business sector is fading away, leaving only the corporate sector to meet the needs of consumers.
Perhaps that is why Democrats are so adamant about raising the federal minimum wage to $ 15 an hour. Wages are already increasing according to market demand and the region. The average unskilled worker in the United States earns about $ 11 an hour. The government does not have to intervene, unless it has ulterior motives.
A minimum wage of $ 15 would likely crush what’s left of small businesses, and only businesses that receive the bulk of the stimulus money will be able to afford to pay workers at the highest rate. On top of that, years from now the government could claim to have “acted” to fight stagflation by raising people’s wages. But a minimum wage of $ 15 is most helpful to the establishment in the short term because it muddies the waters on the issue of inflation.
Prices will continue to rise due to the devaluation of the dollar, but the media and government will say it has nothing to do with the dollar and everything to do with companies raising selling prices to offset the increase. labor costs.
The greatest threat in the history of American society
I suspect the establishment will do everything in its power to distract public attention from the greatest threat in the history of American society – the stagflationary time bomb.
If they admit its existence, the public might prepare for it, and they don’t want to. If Americans were to decentralize their local economies, support small local businesses instead of big box stores, start producing basic necessities for themselves, and if they started developing currency alternatives like local certificates backed by cash. commodities … then they would be able to survive a national financial crisis.
In fact, I guarantee that any community, county or state that takes these steps will be immediately targeted by the federal government, further revealing the truth: the establishment wants the public to suffer.
They want an economic disaster. They don’t want people to have the opportunity to take care of themselves. They need scared, desperate, pliable people or they will never achieve their reset schedule.
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