We are told that we need to pass these trillion dollar “stimulus” bills to help those who are hurt by the lockdowns. Sure, those who have lost everything, not because of COVID, but because of mostly Democrat Governors shutting down their states and telling people that they aren’t allowed to go to work, should receive a fair compensation for being told that they can’t open their business or go to work. I would argue that it falls under eminent domain and that the government legally needs to provide fair compensation to those who have had their lives ruined because of the government.
$1,400 isn’t fair compensation to someone who lost everything because of the shutdown. And notice how I keep saying because of the shutdown, not the virus. The virus didn’t cause you to lose your business, dictatorial governors did. Wannabe dictators like New York Governor Andrew Cuomo, Pennsylvania Governor Tom Wolf, California Governor Gavin Newsom, Michigan Governor Gretchen Whitmer and others are the reason that you lost your business. But can we actually afford these multi trillion dollars stimulus bills? And what impact will spending another $1.9 trillion dollars to stimulate the economy have on our future?
We can’t afford these trillion dollar bills and we haven’t been able to for awhile. Despite some telling you we are the richest country, we are NOT. We are BROKE. We are now $28 trillion in debt with another $160 trillion in unfunded liabilities. You should visit USdebtclock.org some time and see what you and your family will end up owing at some point. It’s insane and I would argue criminal what our elected officials are doing.
You can not spend this amount of money and there not be consequences. At some point the bill will be due and it’s going to be painful. This is not a problem that can be solved by just taxing the rich. You wouldn’t just need to tax the top 10% at 100% but you would need to confiscate all of the money that the top 10% have and that still will only pay for half of what the federal government owes in unfunded liabilities and that still doesn’t touch the trillion dollar yearly deficits that we have.
The other option is to just print more and that is going to soon lead to an increase in inflation and likely hyperinflation within the next few years, meaning that you will spend significantly more on the goods and services that you need. What does that do to the economy? This is unsustainable and at some point this is all going to come crashing down. We haven’t printed this much since 1944 and that was because we had to spend the money on equipment for WWII. But we’ve never had anywhere close to the amount of the money that is currently in circulation.
The only reason that we haven’t seen a massive rise in inflation yet is because the velocity of the money is very low, meaning people aren’t spending. When people start spending again, like the sugar rush that we are likely to see with the latest stimulus checks, you are going to start seeing a rise in inflation. When that happens, the cost of everything is going to begin to rise.
A few weeks ago CNBC warned that inflation is going to begin increasing and that it could be “downright hot” by May. https://www.cnbc.com/2021/03/09/inflation-may-have-been-warming-up-in-february-but-it-could-be-hot-by-may.html. They don’t predict hyperinflation but if we continue down the road we are on, it’s coming. We don’t know yet if this is going to be the beginning of hyperinflation or just higher inflation but the cost of living is about to start rising. You can’t keep flooding the markets with more and more money and not expect it to have a negative impact on the economy.
You must start preparing for an increase in inflation and there are several ways to do that.
- Cut back on non essential spending and start stocking up on non-perishable essential items. The cost of everything is going to rise. Responsibly start stocking up on those essential items now before prices rise too much further. If you buy in bulk you are going to save even more.
- Look into refinancing any loans that you have. Interest rates are currently at historic lows but they will start rising. This may be the last chance to get the current rates so take advantage of that, but don’t reset the terms of your loan.
- Invest in commodities and gold and silver. Stocks in these are going to rise with inflation. I would argue holding physical silver and gold too for if/when things get really bad and this system begins to collapse.
- Pay down any debts that don’t have a locked in interest rate like credit cards. Start with the highest interest rates and try to get out of as much of that as possible. Interest rates are going to start rising and you want to be as financially prepared as possible. That will also put you in a better position if you were to lose your job when things start to collapse.
I’m not going to predict that we are going to see hyperinflation this summer because it’s impossible to predict the exact timing of these things., but the very least we are going to see at least a temporary rise in inflation these next few months and you need to be prepared. The best thing you can do is get your financial house in order now so that the pain is as little as possible.