{"id":1508225,"date":"2024-12-16T17:05:00","date_gmt":"2024-12-16T22:05:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1508225"},"modified":"2024-12-16T17:05:00","modified_gmt":"2024-12-16T22:05:00","slug":"schiff-the-economy-needs-deflation","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/schiff-the-economy-needs-deflation\/1508225\/","title":{"rendered":"Schiff: The Economy Needs Deflation"},"content":{"rendered":"

Schiff: The Economy Needs Deflation<\/span><\/p>\n

\n

Via SchiffGold.com,<\/em><\/a><\/p>\n

In a recent discussion with Darcy Ungaro of\u00a0The Everyday Investor,<\/a>\u00a0Peter challenged the widespread narratives surrounding government spending, the Fed\u2019s 2% inflation target, and the policies that perpetuate these problems. Peter and Darcy highlight the underlying structural issues that plague the economy\u2014massive government debt,\u00a0intentional inflation,<\/a>\u00a0and a citizenry oblivious of the true cost of inflation.<\/p>\n<\/p>\n

Peter begins by pointing to the fundamental problem: profligate politicians have borrowed freely, relying on the reserve currency status of the US dollar and eager lenders worldwide. <\/strong>That global willingness to lend paved the way for politicians to promise generous programs without raising enough revenue to cover them:<\/p>\n

The world was dumb enough to loan us the money. But it goes back to the days where the dollar became the reserve currency. And so the world is looking to accumulate dollars and not to just hold them in cash, but to lend them out to generate a return…<\/em><\/p>\n

These large deficits enable politicians to promise something for nothing, which is how politicians win elections…<\/em><\/strong><\/p>\n

And so if you deliver government programs but you don\u2019t raise taxes, commensurate with the cost of those programs, then you get votes.\u00a0<\/em><\/p>\n

This $34 trillion figure barely scratches the surface of America\u2019s true liabilities. Unfunded promises, hidden from official tallies, only compound\u00a0the country\u2019s dire financial position<\/a>:<\/p>\n

But that\u2019s just the tip of the iceberg because politicians didn\u2019t just borrow money and spend it. They actually promised voters all sorts of benefits that have never been funded. <\/strong>So that\u2019s still a debt that\u2019s still a liability. Social Security, Medicare, guaranteed student loans, guaranteed mortgages, guaranteed brokerage accounts, guaranteed pensions \u2013 the US government gave all these benefits to Americans but never funded them. \u2026 So the government is hopelessly insolvent.\u00a0<\/em><\/p>\n

With the debt ballooning, the Federal Reserve faces immense pressure. Peter suggests that while the market expects interest rate cuts, economic reality demands hikes instead:<\/p>\n

Well, the markets expect a cut, but a cut is not warranted. In fact, the Fed should continue to hike….<\/em><\/strong><\/p>\n

[The debt] is currently financed at very low rates and it would have to be rolled over at much, much higher rates. In addition, we\u2019re adding about a trillion dollars a quarter to the national debt. So that\u2019s another $4 trillion that the government\u2019s going to need to borrow. In addition to the $9 trillion, it\u2019s going to need to refinance. So you\u2019re looking at $13 trillion of debt. I mean, I just don\u2019t think the appetite is there around the world.<\/strong><\/em><\/p>\n

Peter recounts the history of the Fed\u2019s 2% inflation target, noting that it was originally intended to be a limit, not a target:<\/p>\n

Central banks eventually perverted this whole concept to making a target of inflation.<\/strong> Like you need 2%, that 1% isn\u2019t enough. But that was never part of what New Zealand did. They never said that we needed 2% inflation. They just said if we get 2%, that\u2019s too much. It needs to be, it needs to be less. 2% was the upper end of what they would tolerate for inflation. But it became the target and now it\u2019s really a floor.\u00a0<\/em><\/p>\n

Inflation is a subtle but malicious tax.<\/a>\u00a0It benefits those in power by allowing them to appear generous without overtly raising taxes:<\/p>\n

It\u2019s in the government\u2019s best interest to have inflation. <\/strong>And so they have to convince the public that it\u2019s good for them… because that\u2019s how they give you something for nothing. <\/em><\/p>\n

But inflation is a tax. It\u2019s just a tax that the public doesn\u2019t realize they\u2019re paying. And they actually expect us to believe it.<\/em><\/p>\n

Contrary to\u00a0what the mainstream says,<\/a>\u00a0falling prices benefit consumers. Falling prices don\u2019t destroy commerce any more than rising prices:<\/p>\n

Nobody wants health care to be more expensive, education to be more expensive, their insurance to be more expensive. Everybody wants stuff to get cheaper and it\u2019s better.<\/strong> <\/em><\/p>\n

Now, the other thing they say as well, if prices go down, businesses can\u2019t make any money. Sure, they can. They make more money because their costs are also coming down.\u00a0<\/em><\/p>\n

Unfortunately, the Fed is poised only to continue these problems, not fix them. As Peter explains in his most recent podcast, Fed chair\u00a0Jerome Powell is distracted from the real issues.<\/a><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nMon, 12\/16\/2024 – 12:05<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/schiff-economy-needs-deflation<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Schiff: The Economy Needs Deflation Via SchiffGold.com, In a recent discussion with Darcy Ungaro of\u00a0The Everyday Investor,\u00a0Peter challenged the widespread narratives surrounding government spending, the…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-1508225","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbimBl-6kmd","jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1508225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1508225"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1508225\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1508225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1508225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1508225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}