Just when you thought multi-trillion dollar deficits for the past couple of years was bad enough, wait…there is more! The one-two punch from monetary and fiscal authorities keeps coming with no end in sight. The government, especially the Democrat party wants to continue with the massive spending spree and the Federal Reserve is more than happy to continue to finance such profligacy. Of course nothing is free and the results will be higher direct taxes at every level, federal, state, and local, higher inflation, lower living standards, and fewer opportunities. One cannot fix a global debt crisis with even more debt. Yet no policy maker regardless of political party or monetary institution wants to take responsibility or accountability for their years of reckless and criminal behavior. We do not have the right to steal from future generations, yet that is exactly what it means when we run these types of annual deficits and accumulate a national debt of over $28 trillion and growing!
Today was the conclusion of the FOMC meeting and as expected the Fed left the Federal Funds Rate unchanged at 0.00-0.25 percent. They also maintained their stance with respect to their QE program whereby they will continue to purchase at least $120 billion per month of US Treasuries and mortgage-backed securities. Last week their balance sheet hit a record high of over $7.8 trillion. Fed Chair, Jay Powell, continues to reiterate that inflation expectations will be transitory and will be a result of base effects, due to the low levels seen last year due to the lockdowns. In effect, he is stating that the Fed is just going to wait and see what happens next year, because the base effects will be in play through the remainder of this year. So a large print on inflation may very well occur and the Fed will just presumably shrug it off and say it is only due to base effects. We wonder if the people who have to pay higher prices will be so nonchalant about their currency being devalued?
Finally some tougher questions were asked of Jay Powell, but most likely simply due to the obvious absurdity of their policies and rhetoric. For instance, questions were asked with respect to the real estate market, which is currently hitting all-time highs with prices and other metrics. It was then asked with this as a backdrop, why then does the Fed continue to purchase $40 billion per month of MBS? It may be understood and even accepted that during the GFC, housing prices were collapsing and MBS were toxic assets and the Fed was attempting to inject liquidity into the system via these purchases. That was then and this is now. The GFC was an emergency and thus they justified their actions because of the falling house prices. Now, we have prices at all-time highs and the Fed also states that the economy is recovering – so where is the emergency to justify these purchases? A fair and basic question that received a terrible answer or better yet a non-answer, but at least the question was asked. On the other side, however, giving credit where credit is due, Jay Powell did admit that rising housing prices are pricing people out of the market, especially younger people, and that this is problematic. This is true. Yet does he not understand that much of this is a direct result of monetary policies that he is responsible for and fiscal policies of which his institution finances? This summarizes who and what we are dealing with.
This evening President Joe Biden gave an address to a joint-session of Congress. In his hour long speech he promised trillions of dollars in new spending on top of the trillions of dollars already passed to be spent during his short-time in office. There is completely no understanding of basic mathematics that exists within Congress, especially within the Democrat party. For instance, the Biden administration wants to increase taxes on the wealthiest of individuals and corporations. And presumably, with this extra tax revenue all of these new and old programs will be funded. Well not so fast. We are on track to spend nearly $8 trillion this year alone! This will give us an annual budget deficit of over $4 trillion. Our deficit will be larger than the entire amount of tax revenue that is brought in, which is around $3.5 trillion. Further, if you take $8 trillion and divide by 52 weeks in the year, you get around $154 billion of spending per week! And this is just the federal government. So, you can confiscate 100 percent of Jeff Bezos’ net worth, not just income, but everything the man owns, and it will only finance the US federal government for one full week! Yeah it does not add up and look who is in control of the education system – yep the government. These programs are outrageous, un-American, and unconstitutional. Yet none of that is going to stop them from trying to pass more legislation and spend trillions of dollars that we do not have – thus stealing it from future generations and robbing them of their prosperity and opportunities. This is all only going to get worse. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Fraud #Inflation #Spending #Debt #Gold #Silver #EndTheFed #bananarepublic #FireCongress #Liberty #USA #Leadership #Revolution #Protests #Peace