Running 'Cause I Can't Fly 2: Bill Bonner, "Borrow, Print, Repeat"

Monday, July 17, 2023

Bill Bonner, "Borrow, Print, Repeat"

"Borrow, Print, Repeat"

Plus neocon warmongers, trillion-dollar deficits,

pushy planners and plenty more...

by Bill Bonner

Poitou, France - "Friday, we saw how Gina Raimondo, Secretary of Commerce, said ‘we’ had to ‘push’ people around in order to realize her version of a good economy. It’s not necessarily an economy that gives people more of what they want; she wants an economy that produces more silicon chips! And the way to get it is with more central planning.

We looked too at what the feds have to ‘push’ with – carrots and sticks – and the way the two political parties have come together to get more of them. But the carrots are running out. The US has added $27 trillion to its debt so far this century…$1 trillion in the last 5 weeks. That’s money it spent…but didn’t have. And now the Fed is trapped between ‘inflate’ or ‘die;’ it must now continue to inflate its economy…or its bubble economy will die.

But wait…the headlines tell us that inflation is beaten. CNN: "Inflation fever is finally breaking. The Fed’s soft landing may be in sight." "If Fed Chair Jerome Powell were any less buttoned up, he’d be well within his rights to call a press conference, stride up to the lectern in a T-shirt and board shorts and say three words - “soft landing, jerks!” - before dropping the mic and walking out. For context, a year ago the CPI peaked at 9.1% — the worst inflation in more than 40 years. [Now, it’s half that level.] That is, to be clear, fan-freakin'-tastic.

(For the record, the Fed has a 2% target for inflation. And while the CPI gets more headlines, central bank officials favor a different inflation gauge, the Personal Consumption Expenditures price index. The most recent core PCE index reading was 4.6% in May.) For the record, in other words, it ain’t so ‘fan-freakin'-tastic’ after all.

Up, Up and Away: Inflation is 130% above the Fed’s target. Prices are far higher than they were 2 years ago…and they’re still going up. Inflation is always and everywhere a political phenomenon. And as long as the Feds continue to spend trillions of dollars more than they receive in taxes…they will have to get the money somewhere. Either borrowing or ‘printing.’ Borrowing pushes up interest rates and crimps the economy – leading to lower tax receipts and the need to borrow even more. That leaves only two real choices…cutting back on spending, or inflating the currency.

But budget cuts run into the brick wall of America’s late, degenerate political system. Everybody wants more. Nobody wants less. Republicans no longer oppose the carrots. Democrats no longer abhor the sticks. Instead, the elite of both parties want more of both.

So inflation is not going away. The feds will ‘print.’ And the money will lose value almost as fast as it is created. That is the lesson from countless experiments with overspending and printing press money. There is no reason to expect a different outcome this time.

Rights and Wrongs: Republicans did not oppose spending the money; they just wanted to use the defense bill to ride their favorite hobby horses. This is the joke that Congress has become. No debate on whether the US really needs to spend so much money on pointy sticks. No debate on where the money will come from. No concerns about bankruptcy or money printing. Congress debates neither war nor inflation…but only transgender rights!"

- https://bonnerprivateresearch.substack.com/