Biden’s inflation fires blaze on like the flaming oil wells during the first Iraq War. As of March 2022, inflation had risen by 8.5% compared to the same time last year.
According to the most recent official report, U.S. economic growth slowed by 1.4%, making matters worse. Unfortunately, even the bulliest of bulls in the mainstream media, CNBC, could not put a positive spin on this…
U.S. GDP fell at a 1.4% pace to start the year as pandemic recovery takes a hit
The dollar’s strength, hand-in-hand with our buying power, is plummeting due to inflation. Meanwhile, the “monetary supply,” or the number of dollars in circulation, continues to grow incredibly.
What is going on? It may be evident to you, but somehow the point is not quite getting through to the Biden regime that more dollars do not mean more wealth. So they are still trying to solve an inflation problem by pouring more fuel onto the Fire. It just does not make sense!
Moreover, it does not end there. Every day, we see more examples of how our government seems increasingly willing to “shoot the hostage,” trying to drown the inflation firestorm in Gasoline. Their efforts to make what they first considered a merely “transitory” problem much worse.
Are these people trying to make lousy inflation worse?
You might think that U.S. officials would examine government spending with more skepticism in a severely stagflationary economy. Maybe consider something as drastic as ending deficit spending.
Unfortunately, it does not look like that is on the table—quite the opposite.
Under Biden’s leadership, the government is “stepping on the gas” and boosting deficit spending despite its proven to be counterproductive.
Here are just three of the most glaring examples.
#1 Billing “big oil” to ease the pain at the pump
According to Congressman Ro Khanna’s unusual logic, reducing fuel prices at the pump requires that “Big Oil” companies stop making a profit:
This is a bill to reduce gas prices and hold Big Oil accountable. As Russia’s invasion of Ukraine sends gas prices soaring, fossil fuel companies are raking in record profits. These companies have made billions and used the profits to enrich their shareholders while average Americans are hurting at the pump. I am glad to introduce this legislation with Senator Whitehouse that will provide an incentive to cap gas prices and put money back in consumers’ pockets.”
- Sacrifice their profits, enraging shareholders, and limiting their business investments.
- Pay a fee, which the government would redistribute to Americans as a “gas stimulus check.”
There is only one small problem: both choices disincentivize big oil. When companies “are raking in record profits,” they are employing the most people, aggressively expanding their businesses, and paying off debt—sacrificing profits curbs business growth, employee pay, and innovation.
Alternatively, they could pay the “gas stimulus” fee directly – in which case, they would be penalized for running their businesses effectively. (Where in the economic textbook does it say that raising producer costs lowers prices?)
#2 – U.S. government, states considering even more stimulus checks
While inflation is rising, another round of large-scale government money-printing and spending does not make things better. Instead, it is much more likely to make things worse. Dr. Jaime Peters, assistant dean and assistant professor of finance at Maryville University, explains that for some lawmakers, “inflation-related stimulus payments will simply feed the beast,” putting even more money into the market where the supply of goods already cannot meet the demand.
While officials can claim that inflation will not worsen because this round of spending is more “targeted” than the last $5 trillion, does that sound plausible?
After all, for months throughout 2021, Federal Reserve Chairman Jerome Powell claimed that inflation would only be transitory and blamed it on “supply chain blips,” remember? Despite his claims, inflation has burned not just hotter but also higher. Printing more dollars for new “stimulus spending” will not extinguish the Fire.
#3 – Free fertilizer to combat rising food prices
When Russia invaded Ukraine back in February, both the U.S. and E.U. competed to see who could punish Putin’s nation with the most comprehensive economic sanctions. Unfortunately, it seems like nobody bothered to check and see what Russia was doing for the rest of the world. Russia is a leading exporter of not just oil but food and fertilizer – which certainly explains why prices at the grocery store are so eye-popping.
So what should we do about it? Do not worry, because Janet Yellen, the Secretary of the Treasury, the person in charge of the U.S. government’s bank account, has a plan!
In a recent statement addressing Russian sanctions, and their impact on the U.S. economy, Yellen proposed that the government would provide “free fertilizer” for small farms. In her mind, that would help them produce more wheat.
True, free fertilizer would probably lead to more food grown here in the U.S.
There is just one minor drawback.
Neither the Fed nor the Treasury department grows food or makes fertilizer.
The harsh reality that Yellen did not disclose is that giving away free food and fertilizer to prevent starvation in Africa will raise prices everywhere else. Moreover, sanctions on Russian energy raise the cost of producing fertilizer.
Targeted support for smallholder farmers so they can continue to produce” means free fertilizer for small farmers to plant.
Now, let us keep in mind that there is no such thing as “free.” So when the U.S. government gives away something for “free,” who is on the hook? Who pays the bill? The U.S. taxpayer, of course.
The government is not content with destroying your purchasing power with out-of-control inflation. Instead, they are making us pay for the privilege, too.
Can the government spend America into prosperity?
Because of all the free money printed and handed out by politicians, prices rise. So what is the solution? Print and spend more.
It is so baffling that it would be laughable if it were not true.
They are not alone if you think it is just the Biden regime who does not understand basic economic principles like supply and demand. Japan is discussing very similar moves:
Japan, the government is about to spend billions to “ease inflation pain” resulting from spending billions.
According to the Nikkei, Japan plans to spend 6.2 trillion yen ($48.2 billion) on – get this – gasoline subsidies, low-interest loans, and cash assistance “to alleviate the pain of consumers and small businesses facing rising prices,” which were caused by, well, massive government spending.
They just do not get it.
Printing money does not create wealth – it just devalues money.
Government spending does not create economic growth; it destroys it.
Punishing successful businesses doesn’t lower prices – instead, it drives them to relocate to friendlier nations.
So are three of the most significant ideas U.S. officials are discussing to fix the growing economic crisis caused by massive spending… increasing spending.
You cannot douse a bonfire with Gasoline, no matter how much your dump into the flames. However, that will not stop the government from trying! So in the meantime, the rest of us should take steps to ensure you do not get burned.
There is something else the Fed cannot print
Inflation is likely to stick around for longer than even the most pessimistic think. At best, an economic downturn (a stagflationary lost decade at worst) is inevitable. The good news is, it has not happened yet. So you still have time to protect yourself and your loved ones from the incoming disaster. Already have your inflation-resistant investments in place? That is great!
Now is the time to evaluate your plan against the current conditions to ensure you are protected when foul goes worse. Making your finances more resilient can provide you peace of mind when you need it most.
Remember, there are some things the Fed cannot print. Nevertheless, some things tend to retain their purchasing power, even when the inflationary bonfire burns hottest. So take a few minutes to learn how physical gold and silver can help shelter your financial future.
Remember, the best time to buy protection is before you need it. By acting early, you are getting in ahead of all the other people who decided to “wait and see” and wind up paying much higher prices during the stampede for the exits…