Get Ready for Chaos in Markets
With permission from Future Money Trends
As America’s central bank continues to print fiat currency to paper over the gaping hole in the economy, problems buried by deceptions and distractions are still there, waiting to wreak havoc on the already embattled middle class. Indeed, what’s old and discounted by the corporate and government elites and unknown to 99.9% of the populace will soon become impossible to ignore.
It’s a very different fiscal landscape from the one our parents and grandparents knew: a time when Paul Volcker ran a tight ship at the Federal Reserve and excessive money printing was actually a topic of discussion. That was back when financial discipline and belt-tightening were not only considered, but actually implemented on occasion.
That’s inconceivable now in an era when Modern Monetary Theory is gaining traction: policymakers are seriously considering the idea that America is too deep in debt to do anything about it, so we might as well keep printing and spending money to solve our immediate problems.
You can call it kicking the can down the road, except the can is the size of a Volkswagen now and there’s not much road left. Back in the old days, a $984 billion budget deficit would have dropped more than a few jaws; today, it’s applauded as a “relief” because the government had expected a full $1 trillion for fiscal year 2019.
That figure represents a 26% increase over last year’s deficit, and it’s 4.7% of America’s GDP – the highest percentage since 2012. Talk about a money pit: America is spending $376 billion in fiscal year 2019 just on the interest payments on the debt:
The stock market is elevated, so you don’t hear people talking about the incessant printing and spending because it doesn’t feel like a problem at the moment. Career politicians and the Federal Reserve have been able to avoid this topic of conversation because the dollar has been in a bull market – until recently, as the “almighty dollar” has finally started to roll over.
With the dollar weakening against other currencies and bond yields rising lately, the ramifications of the government’s “kick the can” policy will be felt by every last citizen via higher consumer prices and increased borrowing costs: interest payments on loans and credit cards will be higher, as will the nation’s interest payments on the nearly $23 trillion sovereign debt.
The central banks of the world won’t care, but the people will care because now they’ll have to. People will once again start to pay attention to the magnitude of the trade deficit and the size of the money supply like they did back in the 1980s.
The problem today is that our attention has been deflected by shiny numbers of high stock market valuations and deceptive jobs numbers that create a positive feedback loop, ultimately empowering governments to falsify statistics with the help of bought-and-paid-for politicians, economists, and media pundits.
Sure, you can numb the pain in the short-term by looking at comforting numbers and ignoring the cracks in the foundation, but wishful thinking won’t stave off the imminent economic tsunami.
The “everything bubble” – peak values in stock market indices, real estate, bonds, and the dollar all at once – has been fueled by print-and-spend policy, and the tipping point isn’t far off.
When the banks didn’t have enough cash to get through the night and the Federal Reserve had to commence an emergency bond repurchasing “repo” operation, I told you to expect more of these maneuvers – and lo and behold, the Fed just ramped up its daily repurchase offerings from $75 billion to $120 billion.
A fully functional banking system wouldn’t need that level of intervention, and a viable economy wouldn’t need to borrow trillions just to get through another year without a complete collapse of the system. That, however, is the message that the corporate-owned press will never allow you to hear.
Because of this, you have to hear it from me and the few honest publications that will bring this crucial conversation to the public, regardless of the backlash that’s bound to occur. What a shame that an errant government has sacrificed tomorrow’s hope for real prosperity – they promised dreams and only gave you illusions.
