Borrow, Print, Repeat
Plus neocon warmongers, trillion-dollar deficits, pushy planners and plenty more...
Bill Bonner, reckoning today from Poitou, France...
Friday, we saw how Gina Raimondo, Secretary of Commerce, said ‘we’ had to ‘push’ people around in order to realize her version of a good economy. It’s not necessarily an economy that gives people more of what they want; she wants an economy that produces more silicon chips! And the way to get it is with more central planning.
We looked too at what the feds have to ‘push’ with – carrots and sticks – and the way the two political parties have come together to get more of them.
But the carrots are running out. The US has added $27 trillion to its debt so far this century…$1 trillion in the last 5 weeks. That’s money it spent…but didn’t have.
And now the Fed is trapped between ‘inflate’ or ‘die;’ it must now continue to inflate its economy…or its bubble economy will die.
But wait…the headlines tell us that inflation is beaten. CNN:
Inflation fever is finally breaking. The Fed’s soft landing may be in sight
If Fed Chair Jerome Powell were any less buttoned up, he’d be well within his rights to call a press conference, stride up to the lectern in a T-shirt and board shorts and say three words — “soft landing, jerks!” — before dropping the mic and walking out.
For context, a year ago the CPI peaked at 9.1% — the worst inflation in more than 40 years. [Now, it’s half that level.]
That is, to be clear, fan-freakin-tastic.
(For the record, the Fed has a 2% target for inflation. And while the CPI gets more headlines, central bank officials favor a different inflation gauge, the Personal Consumption Expenditures price index. The most recent core PCE index reading was 4.6% in May.)
For the record, in other words, it ain’t so ‘fan-freakin-tastic’ after all.
Up, Up and Away…
Inflation is 130% above the Fed’s target. Prices are far higher than they were 2 years ago…and they’re still going up.
Inflation is always and everywhere a political phenomenon. And as long as the feds continue to spend trillions of dollars more than they receive in taxes…they will have to get the money somewhere. Either borrowing or ‘printing.’ Borrowing pushes up interest rates and crimps the economy – leading to lower tax receipts and the need to borrow even more. That leaves only two real choices…cutting back on spending, or inflating the currency.
But budget cuts run into the brick wall of America’s late, degenerate political system. Everybody wants more. Nobody wants less. Republicans no longer oppose the carrots. Democrats no longer abhor the sticks. Instead, the elite of both parties want more of both.
So inflation is not going away. The feds will ‘print.’ And the money will lose value almost as fast as it is created. That is the lesson from countless experiments with overspending and printing press money. There is no reason to expect a different outcome this time.
The Road to Ruin
But it’s not just the money. There are two major ways to destroy a great nation – inflation and war. That’s where the sticks become deadly. And last week, the US showed up in Vilnius with a load of them, pushing the kind of ‘foreign entanglements’ that America’s founders warned us against.
You used to be able to count on the Republicans to favor more military spending…and the Democrats to oppose it. Now, Pentagon budgets are rubber stamped by both parties…and fattened with weapons programs that even the brass doesn’t really want.
Who complains? The peaceniks have been purged from the Democratic party…in their place are the Hillary Clinton/Victoria Nuland neocon warmongers.
But wait. What’s this? Are the Republicans now becoming the party of peace? The Hill:
GOP passes amendments that threaten to doom defense bill
House adoption of conservative amendments to a defense bill has thrown the fate of the must-pass package into doubt, sparking widespread opposition from Democrats and putting new burdens on Speaker Kevin McCarthy (R-Calif.) to rally enough Republican votes to pass it through the lower chamber.
The threat to the National Defense Authorization Act (NDAA) is unusual for an annual legislative ritual that sets the budget for the nation’s armed forces — and routinely enjoys broad bipartisan support.
But this year, under pressure from hard-liners in his conference, McCarthy brought a series of controversial conservative amendments to the floor. Five of those measures — pertaining to explosive issues like abortion and transgender rights — were approved on largely partisan votes Thursday evening.
The most consequential of those is an amendment that would reverse the Pentagon’s policy to reimburse travel expenses for service members who get abortions…
Rights and Wrongs
Republicans did not oppose spending the money; they just wanted to use the defense bill to ride their favorite hobby horses.
This is the joke that Congress has become. No debate on whether the US really needs to spend so much money on pointy sticks. No debate on where the money will come from. No concerns about bankruptcy or money printing. Congress debates neither war nor inflation…
…but only transgender rights!
Regards,
Bill Bonner
War! Yes indeed. You can thank America for starting WWIII! Supplying cluster bombs, drones, planes, guns, bombs, manpower, munitions, ect... to Ukraine only intensifies the magnitude and destruction of the war.
The same way the parents of a teenage boy are held accountable when he steals daddy’s gun and goes shoots up the place! Would not have happened if he did not have access to that gun.
Same concept with Ukraine, would not have happened if America had not provided them with those advanced deadly weapons!
So next time you are New York, make sure to thank The Statue of Liberty for trying to liberate Ukraine and escalating the entire world into a fiery confrontation! 😂
Republican sons seem to enter the military for a college degree (fools) and fight these wars while sons of Dems go to college for free on Joe Biden. Free college might in fact have doomed military recruitment.
We had no good reason to fight any of our wars save the Revolutionary war and the Civil war. it's hard to whip up patriotic zeal for Ukraine after Afghanistan and for the life of me I wonder why attacking Afghanistan was seen as protecting our freedoms. Idle young men tend to lean to vandalism and blowing things up in general, possibly the motivation for Afghanistan and BLM riots.
It is hard to believe citizens still participate in the circus of voting and Washington, DC. Do they really think either party is interested in saving the Republic? The Republic was over the day Woodrow Wilson and congress pushed through the Federal Reserve Act. The last nail in the Republic was driven in by Nixon when he removed the dollar from reality.
I hate to be the harbinger of bad news, Bill has been overly optimistic within these newsletters.
When I was a young man in school there where no full time paid public school teachers. In fairness and to attract the very best for our children this was changed. You see, teachers only work 183 days a year or 6 months not a full year. When they work 8 hours of back breaking work is not within the job description. When I was in school all of my teachers save a few women had other full time jobs, and looked upon teaching as a passion, desiring to make a mark on the youth of our nation. No pensions, vacation time, or really any benefits were expected or given. There were no strikes, no work stoppages for higher pay and smaller class sizes. No, this all came with the take over of education by liberals with academic degrees in teaching.
My biology teacher was a Realtor I give him credit for sparking my interest in rentals. He also at no cost hosted the Sportsman Club were we were invited to bring in our favorite gun and provide a lecture on its merits. No one thought of shooting up the school, and yes we sometimes brought in ammo. Our little school outside of Philadelphia had class associated with Gym where in we shot 22 rifles in one of the basket ball courts.
All of our teachers had real full time jobs, and this is where I think the USA went off the rails. Idle minds tend to deteriorate and god knows teachers have a lot of idle time. Before we knew it unions were formed and these part time workers demanded professional full time pay and benefits no one is given save State and Federal workers.
To sum up, the Nation has been rusting out like a fender on an old car the paint looks ok save a few bubbles on the paint, but really the car is a basket case of rust. There's no saving the Nation without its citizens going through a catastrophic wake up call. That call is coming and with so many people unable to fend for themselves there will be blood in the streets. Everything is going to change and when it does it will be a very long while for it to return to any semblance of normality. No need for violence but a good defense will be in order.