If Larry Summers and Jamie Dimon are the voice of reason, you know something is dreadfully wrong in the current state of economic affairs. In fact, if Summers and Dimon are even making sense, the wheels have already come off.
Why aren’t these two sounding like the economic hitmen that they are? Because they are warning of the Biden Administration’s completely insane spending plans. Spending plans that will indeed cause inflation in the United States.
Joe’s recent equation adds up to an economic disaster
To be clear, it isn’t necessarily the numbers as much as it is the method. In other words, the Biden Administration is not considering credit stimulus but a mix of buying bonds, borrowing, and printing. Combined with the plan to spend drastic amounts, this is a recipe for economic disaster.
The White House is digging in its heels defending President Biden’s $4 trillion spending plan. Meanwhile, JP Morgan Chase CEO Jamie Dimon warns that this unprecedented amount of stimulus could lead to runaway inflation.
When testifying before the Senate Banking Committee, Dimon raised his concerns over the future inflation. Insisting the Federal Reserve may need to raise interest rates sooner to clamp down on rising prices. He said that he expects inflation to climb “considerably higher” than 1.6%, thanks to spending and federal monetary policies.
You know, because Americans aren’t already struggling enough with their personal finances.
U.S. debt, already at record-high levels, set to hit $30 trillion
CBS News Reported:
The Congressional Budget Office projects the federal debt will exceed the economy’s size by the end of the year and will balloon to 202% of gross domestic product over the next 30 years. And that’s their outlook without factoring in President Joe Biden’s $1.9 trillion COVID-19 relief package, which is making its way through the Senate this week.
According to the nonpartisan office, by the end of this year, the federal debt will be 102% of GDP, a proportion that will nearly double by 2051. The CBO warns this increases the risk of a fiscal crisis and higher inflation moving forward.
According to the report by CBS the pandemic triggered the deepest economic downturn since World War II:
The White House and congressional Democrats warn the United States is far from out of the woods in its efforts to contain the coronavirus pandemic and revitalize the economy. On Thursday, the Labor Department weekly report showed more than 1.1 million people last week filed for first-time unemployment benefits, including Pandemic Unemployment Assistance. More than 18 million people remain on some form of unemployment benefits.
Congress has already approved around $6 trillion in COVID relief, including $4 trillion under President Trump.
Biden’s “Build Back Better” agenda includes a $2.3 trillion American Jobs Plan and a $1.8 trillion American Families Plan. All of these measures would reshape the social safety net and allegedly address the nation’s crumbling infrastructure.
“If that money is wasted, it is not productively spent, we will have more inflation, less productivity, slower growth and the American democracy you will have lost even more credibility eyes in the world,” Dimon said.
You can bet that money will be wasted.
Powell denies any signs of persistent inflation
The Labor Department reported earlier this month that U.S. consumer prices for goods and services surged 0.8% in April, the most significant monthly increase in over a decade. It’s also the fastest year-over-year jump since 2008.
Core inflation, excluding food and energy data, rose 0.9% in April and 3% over the past 12 months.
According to CNN Business:
Prices have risen sharply on everything from used cars and lumber to steel and food. The return of inflation is especially costly to low-income families, who are most likely to have been hit hardest by the pandemic.
The Federal Reserve, led by Chairman Jerome Powell, has held interest rates near zero since March 2020. The Reserve maintains that it will continue to do so until “labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.”
Woah there, Joe, you might want to think this through
Even Larry Summers is calling on the Federal government to put on the brakes:
“I think policy is rather overdoing it,” Summers said in comments at the CoinDesk conference that were released Wednesday. “The sense of serenity and complacency being projected by the economic policymakers, that this is all something that can easily be managed is misplaced.”
“We’re taking very substantial risks on the inflation side,” Summers said in remarks made initially May 18.
“The Fed’s idea used to be that it removed the punchbowl before the party got good,” Summer said. “Now, the Fed’s doctrine is that it will only remove the punchbowl after it sees some people staggering around drunk.”
“Joe Biden has a historic opportunity to be a great president,” Summer said. “But I think they should learn the lesson of the Johnson administration’s errors that elected Richard Nixon and the Carter administration’s errors that elected Ronald Reagan.”
“When you’re surprised, you’re supposed to consider changing your mind,” Summers said.
Summers stated that it might be too early to know for sure that inflation is a problem. But that uncertainty is what raises questions about the Fed’s outlook.
“Then why on God’s Earth are we projecting that we are going to hold interest rates at zero for three years?” Summer said, saying he is not suggesting that the Fed “lurch” into raising interest rates.
Now you know inflation is not looming. It is here
Anyone not working in government or academia is now aware inflation is currently taking place across the U.S., not threatening to appear in the future. Essential and nonessential commodities are steadily rising, and that includes food and energy. (None of this is news to the poor, working, and middle classes.)
It appears the Biden Administration’s main task is to accelerate the collapse of the United States, with Academia, as is typical, acting as its gatekeeper.
I would suggest preparing for two financial and monetary crises: First, an inflationary crisis. Second, a deflationary one. (I highly recommend visiting our sister site The Frugalite for real-deal advice on how to live large on a tiny budget. We are all going to need to know how soon.)
But more on that in another article.
Have you noticed inflation in your area?
Have you noticed inflation starting in your area? Are there any particular items you’re seeing hit the hardest? What do you think of this economic strategy? Share your thoughts in the comments.
About Robert
Robert Wheeler has been quietly researching world events for two decades. After witnessing the global network of NGOs and several ‘Revolutions’ they engineered in a number of different countries, Wheeler began analyzing current events through these lenses.
Millions of people are living off unemployment from the State and the Federal subsidy. Once that shuts off, if ever, all heck breaks loose. They decimated businesses last year and this and it will take a decade to get back if ever to where we were is my opinion.
Yes, inflation on almost all consumer items. The upside of inflation is that you can invest in the market and ride the inflationary trend up. If you hold onto a stock for a year or more before selling, you are subject to a lower tax rate for the profit- the capital gains tax. Now, this administration wants to double the capital gains tax AND make it retroactive to April of this year. Sold your house at a profit in April? Guess what? Now the tax on that profit would be double what you thought it would be when you sold. Talk about squeezing consumers at both ends!
I’m seeing a lot of man-made problems in the supply chain. This is to mask inflation. Corn is up? Oh, the weather. Gas is up? Oh the pipeline got hacked. On and on. They are trying to mask systemic inflation they created printing money by blaming one-off events they probably helped create. In the Colonial Pipeline is was actually the execs that ordered the pipe closed, not a hack.
When I first heard about the pipeline company hack I didn’t think Russia or China, I thought leftist envirowackos.
When I heard about the meat packing company hack, I didn’t think Russia or China, I thought the Deep State. Now I also think the pipeline issue was Deep State.
Most of us aren’t seeing the whole picture, only bits and pieces.
To understand what’s happening you need to look up the Fabian Society and their precepts.
Good tip!
Their plan might be to (1) wreck everything economically and blame Covid (i.e. pretend it couldn’t be helped), (2) get as many people on government assistance as possible, (3) mandate vaccines to get the government assistance.
They’re EXTREMELY desperate to vaccinate as many people as possible as fast as possible. It’s very obvious.
They’ve lied in every way possible about the vaccines, their supposed safety, hiding the fact that there’s zero liability, pretending no other way exists to defeat diseases or have a strong immune system, suppressing info about nutrition and supplements, censoring any thing that goes against the liars in government and the major industries their in cahoots with.
Beware accepting what the psychopaths offer.
Jimmy Carter years.
Early in 1980, VA home loan interest rate was 12%.
Early in 1980, new car interest rate was 16%.
I bought a house in 1979 using my VA loan. We closed as the rate was rising at 11%. I sold the house in 1981 when I was transferred and had to let the buyers assume my loan because the non-VA interest rate at the time was 16%. I bought a new K-car station wagon in 1981 for the move to my new duty station in FL and paid 23% interest.
If you wanted to destroy the US or any Country, a sure way to do so is with hyper inflation and civic discord.
Right now we are at set for exactly that scenario. In fact the whole world is.
BLM , Antifa, Liberals and other groups have provided the Civil Discord.
Trust in Governments worldwide are at a low point, along with distrust or disunity between neighbors, friends and relatives.
Put enough economic pressure into the mix and it is sure to blow up into riots and maybe even Civil War.
If you can make that happen in a major economic country, the ripples through the World economy will be a Cat 10 Earthquake, Collapsing everything.
Then once the dust settles, you can clear the land and rebuild it in any way you like. It is primed for a new, world wide, social order to be set up.
A “Great Reset” of every thing!
So beware, as the “Great Reset’s” programs and goals may not be what so many people believe they are.
Obama was Jimmy Carter 2.0. Biden is Carter 3.0. The inflation, like the plandemic, is of a purpose.
This is the fundamental transformation of this country, began when Roosevelt borrowed from the Chinese in 1933, and furthered by every President since then. Since then we’ve developed a de facto aristocracy interested only in power and control. This is our reward for constantly putting evil people into power, since the lesser evil is still evil and behaves according to its nature.
Inflation? Oh yeah. Food and energy, most notably, but prices are up on everything I’ve seen. If prices are the same I’m getting less quantity. Enjoy the calm before the storm, people. And make good use of your time.
@ Jayne , yup fundamental transformation from a free Republic to a Marxist hellhole. As Lenin said, “Grind the Middle Class between inflation and high taxes”. I wonder how old Vladimir knew about Jobama’s 2021 budget?
Ammo up.
toilet paper up.
Jayne can you please explain how the USA was borrowing in 33? At that time the Japanese were running ruck shod all over China. Ever hear of Nan-king. They were poor farmers at the time. Same as Vietnam when we brought war to them.
Went to the feed store for hog food. While waiting my turn, I was looking at the price board. 50# of black oil sunflower seed was $21 last month Yesterday? $29.99!
Most of the so-called inflationary issues aren’t really about inflation, they are about other issues that have nothing to do with inflation, they are either supply/demand issues ir supply chain management issues. People falsely assume they are inflation because they don’t like the Biden Administration. I will give a few examples. Gasoline rarely has anything to do with whoever is President. Prices are set by a few factors. Oil prices are about 60% of the current gas price. Next supply and demand. For the last year, demand was low that as gas was refined , it went in to storage. Sometimes the price of storage was much more than the profit margins of the gas itself. As demand increased, refiners slowly released the gas to keep prices higher to recoup the profits they lost going in to storage. Additionally the refiners are reporting less availability of hazmat certified drivers to moe the gas from storage to the pump. I have talked to others who have said that it isn’t an issue of enough drivers as much it’s enough drivers willing to except the lower pay that refineries are willing to give to truckers to haul the gas. Both truckers and refineries want to make the most profit, to recoup losses from last year. Bottom line gas prices are going up, but inflation isnt the reason. Milk is another issue that has people thinking that inflation is going hyper. Yet it too has issues. The primary market for milk in this country is two fold. K-12 schools and restaurants. Next is the cheese business and last us individual consumption/grocery stores. For the last year, the K-12 schools and restaurants have been closed in many dairy producing areas. Farmers were dumping thousands of gallons that they didnt have a way if selling. Some farmers sold off hundreds of thousands of dairy cows as they brought money in for their meat market. Now the schools and restaurants are reopening. But the amount of available dairy cows is a lot less than before. Dairy farmers are loving it because higher prices means higher profits. Chicken prices. This past winter was tough on chicken producers. Remember when Texas froze? Yep many chicken producers were in the swath of the country that was effected. Millions of chickens died. Flocks were decimated. Low supply means higher prices if the demand increases. And it did. Lastly inflation is tracked by an increase of certain prices. When they go up, inflation is said to have increased. But the key take away is to determine if the increases are temporary or normal. Used car and truck prices went up 10%. Thus was one of the reasons inflation went up. But it isnt because used vehicles are better, its that there is a semiconductor shortage out of China, so it means a slow down in new car manufacturing which has lead to an increase in used car and truck prices. Once again supply and demand.
Good comment, good anecdotes, but I suspect you underestimate the damage inflicted by the leftists. Won’t take us long to know the truth.
You said “But the key take away is to determine if the increases are temporary or normal.” You are asking the wrong question. And contrary to what you said “Most of the so-called inflationary issues are really about inflation.”
Technically speaking inflation is an increase in the money supply not an increase in prices which is what you are showing with all of your examples.
Increases in the money supply are never temporary, an always result in an overall increase in prices by definition. That’s just Basic Economics.
Instead of looking at the price of milk which is produced by subsidized dairy farms or the price of cars which benefit from mass production an automation which can lower the price of cars or the effect of the pandemic which adversely effected many industries resulting in increases in prices. Look instead at the purchasing power of the dollar. Look at the overall wage increases. The prices of homes. Rental costs. All of are adversely effected by the increase of the money supply.
The below links will give you a better understanding of the effect of increasing the money supply on the purchasing power of the dollar.
See
Dollar’s Purchasing Power Drops to Lowest Ever. Inflation Heats Up, as Fed Wants, After Simultaneous Supply & Demand Shocks
by Wolf Richter • Aug 12, 2020
https://wolfstreet.com/2020/08/12/us-dollar-purchasing-power-drops-to-lowest-ever-inflation-heats-up-as-the-fed-wants-after-simultaneous-supply-shock-demand-shock/
See
Purchasing Power Today* of a US Dollar Transaction in the Past
https://www.measuringworth.com/calculators/ppowerus/
This inflation so far is very low historically. It’s also temporary. In the 70’s we used to say, “If the prime rate stays below 10% business will be fine.” We went through mortgage rates of 16%. I made out like a bandit in those days, even though I’d been told a complete collapse was coming every day since 1965. Luckily I ignored that claim and did fantastic.
Yes,Biden does know what ha is doing,and doesn’t care because he has an agenda of what he wants done and its gonna be implemented. Come hell or high inflation,unemployment,and civil unrest
Want to get shock of how much inflation has affected wages and spending power? Go to this page:https://www.ssa.gov/oact/cola/awifactors.html and scroll to the bottom and enter 2021 and Submit Request. You will now see a table of indexing factors by year. These are the multipliers social security uses to compare the wages you made in 1999 to what you make today.
Decide a year to compare your wages–let’s say it’s 1999. Multiple the annual wages you made in 1999 by 1.7755259.
Is the result higher or lower than what you made last year? Those multipliers indicate how much inflation there has been from 1999 till now or another way to put it, how much the dollar has deflated since then. Have your wages kept up with inflation? We will always have inflation.
Your headline…”Is This Administration Actually TRYING to Accelerate the Economic Collapse of the United States?”
Yes. 100% yes. Stolen election not POTUS Biden and gang are doing just that. Biden, Harris and the rest of their gang are all puppets of the deep state who plan is to destroy America as we know it and turned us into a third world country. Everything Biden and gang has done since day 1 is to tear us (America) down and not to build us up or even protect us.
Including the fake pandemic, the untested and not FDA approved vaccine, the unlawful vaccine’s passport to control everybody, the fake and false climate change and the BS green new deal and so much more. They are sell outs and traitors who sold out for money and power and its will only get worse until Americans stand up and say no more and remove them from power. WWG1WGA
Hmm, the reality is that the Democrat machine is hiding, but PLANNING to explode and bloat the size of Government Bureaucracy with sycophantic indoctrinated gofers.
Obama’s weaponization of Gov agencies for 8 years, will now be expanded across All Departments.
The autocratic attacks on all things conservative and cancel-culture will run amuck without effective pushback. They’re creating a Nation of sheep.
Biden has his(Hunter supplied). He’ll live like a king while we make do.
I don’t think they are doing this on purpose. I think some people really believe the “new” economic theory of MMT (Modern Monetary Theory — also jokingly called “More Money Today!”) Joe Biden has an economist he follows that is a proponent of this theory. It doesn’t really make a lot of sense. In MMT, the idea is that government SHOULD run deficits and this is how you grow the economy. That is why AOC said the recent stimulus should have been 10 trillion and not the paltry 1.2 trillion (or whatever) that it was.
This MMT theory kind of worked in the last economic downturn but I suspect it may not play out this way in the future. Eventually the US will not be the only game in town as a place to park wealth. We may have to pay more in interest to persuade people to purchase our debt, and this will cause a lot of problems. (At least it seems this way to me.)
I am reading the book “The Dying of Money” (the one referred to by Michael Burry of the Big Short) and it gives the parallels of how we get hyperinflation. Not an easy read, but very informative. It talks about the German hyperinflationary period and how it compares to our current state of affairs.
I really think that Joe Biden wants to use this easy printed money to give people lots of freebies so they will vote democratic, as well. Just a thought.
Wish I could get MMT to work with my credit card!
Regarding the headline, are they actually trying to accelerate the economic collapse, what is true is that there have been many deluded political and economic theories embraced throughout history.
Do they believe their own stink, or are they enemies of America?
Clearly, at the grass roots and even among some of their leadership, they believe their own stink. But what about those in the driver’s seat? Seems like a calculated low intensity war on America.
Either way, it doesn’t matter.
They are gunning for you and me.
They will fail and we will teach their children about liberty.
Let’s be real, in case it’s not abundantly clear by now, they DON’T CARE ABOUT YOU. At all. In fact they probably want you dead. They will target the activists first, then intellectuals, then the marginally awake critical thinkers. Everyone else will be pacified until they can be dealt with at the elite’s leisure.
“In fact they probably want you dead”
enslaved or dead, spot on. isaiah 60:12 “the nation that will not serve you shall be destroyed”
Prosperity as the majority understand the term is not the goal of Progressive politics. Power is. Because there are no trust based concepts Progressives own that would support their desire for office, they rely on lies and disinformation to persuade illiterate voters to vote for them. Progressives deny America’s roots in Christianity and their goal is to eradicate all of Western Civ’s teachings and institutions. Biden’s insane, nonsensical, discriminatory spending bill is purely Progressive ideologically based. It is designed to further damage America’s basic foundations that support prosperity. They know this is a one term president and are trying to commit sufficient damage to hamstring the next non-Progressive president. They’re counting on the economic chaos to use as leverage to convince voters that they can fix it. They are a virus that keeps replicating.
Please, get real…everything the Democrats have done and expect to do in the future has one ultimate goal…and that is for their party to have total power and control over the US Government.
Did you really not know this?
frankly i’m surprised (given what we’ve seen of the dimocrat agenda for the last 150 years) that anyone is still asking that question
The answer to the author of the articles very insightful question is yes the Biden administration trying to “Accelerate the Economic Collapse of the United States”
The Biden administration is being very successful at causing the economic collapse of the United States because the globalist controlled msm is cheering them on, they can blame all of the economic disasters they are causing on COVID and the general public is clueless when it comes to economics. People are too mentally lazy to study economics on their own.
The democrats even have a cover story for the monetary bubble they are deliberately creating right before our eyes. It’s called Modern Monetary Theory created by so called economists which says the government can create money out of thin air to infinity without ever causing inflation. Reminds me of the idea of magically turning lead in to gold or flat earth or perpetual motion machines or real communism or pink unicorns. And no I am not kidding about what Modern Monetary Theory says and the fact that the democrat party considers it a valid theory of economics.
One of Biden’s economic advisors is Stephanie Kelton author of the book “The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy”. She was also Bernie Sanders economic advisor. You can see her name listed in the “Biden-Sanders Unity Task Force Recommendations” under the heading BUILDING A STRONGER, FAIRER ECONOMY.
Kelton’s book is full of economic fantasies and is no more real than the Harry Potter stories. Kelton an AOC are the dumb and dumber economists of the democrat party.
See
Biden-Sanders Unity Task Force Recommendations
https://joebiden.com/wp-content/uploads/2020/07/UNITY-TASK-FORCE-RECOMMENDATIONS.pdf
For years I have dealt with the topic of “raw materials” and now I say something that nobody wants to choose (least of all “economists”). Various raw materials are running out. The world is that simple. Replace “saving CO2” with “we are running out of fossil raw materials” and everything that happens in the world will suddenly become understandable! But as I said: Nobody wants it to be true …
(Sorry for my bad English, I use translators online)
“Various raw materials are running out”
we’ve been hearing that for decades. “we’re running out of water! running out of wood! running out of oil! running out of farmland! running out of fish!” eventually the alarms fade to background noise.