Federally Fueled Friday – Powell Gives Us a Big Finish
Down and down the Dollar goes.
Powell pulled out all the stops yesterday, saying the Fed was no longer worried about inflation and would spend 5 years boosting the economy if they have to. While Republicans love to pretend they don't tax you, devaluing all the money you've ever made in your live and most of your assets by 10% by reducing the value of the currency is kind of a tax, isn't it?
The wealthy have all these great ways to keep up with inflation but, if you are a regular person getting a regular paycheck which comes in the form of Dollars – you got a 10% pay cut. Not only that but not only does the deficit swell due to that same lower tax rate (for the rich) that causes the Dollar to collapse, but the thing the Government needs to buy with those tax Dollars begin to inflate, causing an even bigger deficit as Government Spending can't keep up with inflation.
4 more years of this and we'll need a shopping cart just to carry the money we'll need to buy groceries! Of course, hyperinflation is a great way to pay off your debts as the economy can grow along with inflation (it's just your wages that don't keep up) while the long-term interest rates are fixed, so the money the Government pays back becomes worth less (worthless?) and PRESTO!, debt problem solved!
Many 3rd World countries go down this path to pay off their debts but it is just as much a confiscation of wealth from the people as any tax ever was but, fortunately, those of us in the Top 1% can simply manage our investments to stay ahead of the game – lucky us! Our Trade of the Year was GOLD, because we expected some inflation due to Trump's market-boosting policies but we're now operating at a whole new level – he has certainly kicked it up a notch and now Powell is on the bandwagon too.
Speaking of America becoming a 3rd World country under Trump, his fantasy-land nomination speech last night got me to try to remember what reality was and here's how America is actually doing compaed to the rest of the World in virus control under Trump's leadership:
Trump worked hard last night to defend his record here, through a mixture of blame-shifting (“our nation, and the rest of the world, has been hit with a once-in-a-century pandemic that China allowed to spread around the globe”) and misdirection (“The United States has among the lowest case fatality rates of any major country in the world”). But the truth here is undeniable. Under Trump, America has let coronavirus rage across the population in a way peer developed nations haven’t.
It is not Trump’s fault that the coronavirus reached our shores. It is Trump’s fault that we’ve responded so fecklessly. There is no reason that, say Germany, should’ve been so much more capable in its response. The difference was political leadership — a difference that was viscerally, visually on display during Trump’s speech, which packed 1,500 people onto the white House lawn, with barely a face mask in sight.
The grim truth is that, even today, we still don’t have a plan to control the coronavirus, save to hope for a vaccine. Vice President Mike Pence admitted as much on Wednesday. “Last week, Joe Biden said ‘no miracle is coming,’ What Joe doesn’t seem to understand is that America is a nation of miracles and we’re on track to have the world’s first safe, effective coronavirus vaccine by the end of this year.” So that’s the plan, then? A miracle? And how many Americans will die between now and then? How many will die if we don’t have an effective vaccine, produced and delivered at scale, by the end of the year? It's 1,000 Americans PER DAY at the moment! 4 more years of this is 1.46M more of us…
So this is the core of Trump’s reelection message: You should give him credit for the economic recovery he inherited from Obama. And you should blame someone else for the disastrous response to the coronavirus. Inspiring stuff!
Have a great weekend,