Before I go any further, World War Two, had several phrases and idioms, one of which was “Kilroy Was Here,” and you have to be ancient like me, to remember that one. Another, was “SNAFU” which meant “Situation normal, all f…k.d up,” which stood for ‘forced unwanted carnal knowledge.’ The Japanese were “Japs,” Germans were “Jerrys,” destroyers were “tin cans,” etc.
For the fourth time, the Fed has increased interest rates. Not that the Fed has any reason, Constitutional permission, or economic logic, to do so, but according to Jerome Powell, the head of the Fed, they’re going to curb the 9.1% inflation rate, by raising interest rates. Almost as silly, as Biden, last Friday saying that “Spending helps to decrease inflation.” It’s just the opposite. Let’s consult a dictionary, OK? From the New Webster College Dictionary; inflation is defined as: “(1) Being inflated, and (2) An increase in the amount of money and credit in relation to the supply of goods and services.” Biden, Congress, Powell, and his board, have obviously flunked “Economics 101.” Do you increase the supply of money, by raising credit rates? Or is it possible that by doing so, you are crippling the real estate business and markets?
Let’s check the money supply, and see if it is increasing, thereby causing inflation. Fair? Since Biden took office a year and a half ago, the federal debt has increased by $5.2 trillion. Currently, the tax receipts of the federal government are $4 trillion, and federal spending, is $6 trillion. The increase in the federal debt, since Biden took office, amounts to about $40,000 per household. Each household doesn’t pay $40,000, but the 9.1% inflation rate, costs each household a pretty penny. Your $100 bill, now, will buy about $90 worth of goods and services. Under Trump’s four years as president, the federal debt increased by $7.2 trillion, but most of it was re-building the military, which had decayed dreadfully, under Obama. He did try though, and knew economics 101.
As an obvious example of what goes on in D.C., under democrats and Biden, allow me to quote from a July 22nd Wall Street Journal column, written by Kimberly Strassel. She writes a column for the Journal every Friday, and she’s great.
“The Senate voted 64-34 to proceed on a semi-conductor welfare bill, sporting a $78 billion price tag. Before the vote, Majority Leader Chuck Schumer, broadcast his intention to lard it with billions more in government spending. The legislation directs government agencies, to assist in the “development” of tech sectors, meaning bureaucrats will funnel the dollars to private companies, chip makers, telcos, cybersecurity outfits, artificial-intelligence shops. Why bother raising capital privately, when you have the American taxpayer?”
16 rino Republicans (Republicans in name only), and all Democrats, voted to place the bill on the floor.” The spending in that Bill is $300 billion, not $78 billion, and it will pass, helping inflation along on its easy voyage.
I just read, “The Laptop From Hell,” and the corruption of the Bidens, and D.C., is simply amazing. D.C., as a Trump bumper sticker said, is a “Swamp” which needs to be drained. He tried to outwit the inner circle, but failed. ‘Laptop,’ goes into details about the D.C. inner circles, manipulating every single thing they can get their hands on, at all levels, and it frightening, to say the least.
Obviously, inflation is caused by an increase in the money supply, and this supply is ordered from the Fed, by the Treasury Dept., to pay bills voted on by the Congress. The Fed doing as it is told, loans the money to the Treasury, and charges interest for the ‘loan’ of dollars the Fed created out of thin air. Powell is in error, as raising interest rates, is an idiotic formula, which could only be imagined by George Orwell. Orwell, were he alive today, in D.C., would find fertile grounds for another novel. The place is a super, modern-day Babylon
Inflation, in history, is always caused by governments
Inflation, has happened everywhere on Earth, because politicians always buy votes with paper money promises. In France in 1790, a bushel of flour cost 40 cents. In 1795, it cost $45. No, we haven’t gotten there yet, but in France, during their inflation, gold and silver prices went up as fast as their money (assignats), went down. In Argentina, right now, inflation is 58%, and no one knows the prices of anything. In Cuba, Inflation in April of this year, was 23.69% and went to 26.16% in May. In ancient Rome, the Emperor began making coins out of tin instead of silver, making the coins virtually worthless, and inflation took off with a roar. Our coins have been made out of worthless metal for 58 years, if that gives you a clue. Don’t save in un-backed paper money promises!
How can you save, if inflation, (increase in the money supply), is always caused by governments? Do you increase the money supply? Do real estate sales and buys increase the money supply? Do inheritances increase the money supply? Do farmers increase the money supply? Do manufacturers increase the money supply? Does Wall Street increase the money supply? NO, to all of them. Since government increases the money supply, does it make sense to store wealth in government un-backed ‘money?’ What else is there which doesn’t have monthly fees, insurance, and taxes? It happens to be gold and silver, which my kids broker for 1%, including delivery, and no, we don’t want your Social Security number.
Don Stott – don@coloradogold.com