Dollar Debasement Central Banks and Retirement: Why I Believe Interest Rates Will Be Forced To Go Up – October 13, 2020,
The goal of the U.S Federal Reserve lowering interest rates to near zero and basically counterfeiting cash via Quantitative easing was to stimulate growth, however, as most Libertarians will tell you, big government is the problem, and rewarding big government for reckless spending is a recipe for disaster.
The market is better suited to redistribute money than the Central banks and Government, currently, the liquidity Central banks provide as well as the contracts government gifts to particular private sector companies haven’t led to the results promised, why? Primarily because when Leftist are notified that there is more money, the Politica Left does everything in its power to spend all the money on things it deems fit, the so-called Conservatives aren’t much better either, the only difference is that the Conservative Political Partys usually don’t spend, raise taxes and regulate.
The Leftist politicians who many times are financially uneducated, will raise taxes, spend more money, and over-regulate the economy. As an example, if Joe Biden wins the 2020 election, higher taxes, Obama Care, the Green new deal, and more regulations on manufacturing are all part of his spending plans, a central bank can’t fix stupidity like that.
Now, because of prior regulations, most people aren’t seeing that most countries in the western world have regulated themselves into socialism. What I mean by this is that in a lot of countries, like Canada for example, Communist China has more of a market capitalist economic model than many countries in the West.
Socialism is expensive and it will grind your economy to halt with all of the bureaucracy, but socialism kind of sneaks up on you and once it happens, there’s usually a cashflow crisis, meaning that the cost to service debts exceeds tax collection.
Now, what people who are anti-austerity measures forget is that the size of government grows as the private sector shrinks, now the private sector via COVID-19 has shrunk tremendously all over the world, however, and this is what I find so funny is that America via public services like the U.S military is able to export it’s debt to other nations who gladly will take on that debt in exchange for not having to protect their own borders.
So the U.S in a simple to understand terms a during a crisis even under a Joe Biden administration, eventually most countries are going to devalue their own currencies, now I’m not sure how long it will take for the entire U.S States to start defaulting on their debt obligations, but eventually everyone is going to see that the reason the market isn’t recovering revolves around artificially low-interest rates which start from the source of the problem, which is the U.S Federal Reserve.
I’m sorry to be the bearer of bad news, but debt is a privilege, not a right, people who can go into debt should be creditworthy and if they’re not, they need to go bankrupt. If you spend beyond your means, whether or not money is backed by gold you need to go bankrupt.
The problem is insolvent entities are being propped up by the Government, if you can’t protect your own countries borders are you can’t meet your social security obligations, you should go bankrupt. Now, I changing to a digital dollar won’t fix the problem, it hasn’t fixed the problem in India, because money is not a miracle it’s a medium of exchange, humans who are financially educated will gravitate to where the wealth is, and if a central bank attempts be the bearer of wealth, eventually that central bank will be backed into a corner.
Interest rates in my opinion have to go up, to get rid of all the bad money in the system. Now it’s unlikely that any politician will allow this to happen, but there’s going to be a cash flow problem, it’s actually already here, but COVID-19 hysteria is clouding what lies ahead and plus tax collection is delayed, it’s not like the governments see a shortfall right away, I’d imagine the year 2022 is when it’s obvious to everyone that something is seriously wrong
Now, for retirees, dollar debasement will depend on the individuals’ financial situations, in the scenario I imagine, forced austerity is inevitable but how austerity occurs in different countries is not something I can predict, because politicians perception of dollar debasement will depend and will vary. Bad debt will be at the center of rising interest rates, mortgage, and other debt deferrals already exist and the thing often ignored during debt resets is that most people are looking out for themselves.
So people in debt right now might assume that their government has their back, but once the cash flow crisis is international, it becomes an everyman/woman for themselves type of scenario. So although you’re a middle-class person with debts, there will be poorer people who need help also, so as important as you assume you are to the government right now, once the debt spiral occurs, you’re just another voter.
So I write this for retirees in the sense that everyone will be in the same boat and eventually most retirements in my opinion will be put into a safe method of investing, but getting there will be a bit challenging because again austerity is often rejected by the Leftists and dollar debasement revolves around the cost of maintaining a big government.
The reason why Argentina has frequent dollar debasement problems is that the size of the Argentine public sector never shrinks! I’m not sure how long it will take voters to realize what the problem is and that’s why I’m not sure how long the coming dollar debasement will last.
Dollar debasement occurs when the cost to operate the public sector permanently stunts the growth of the private sector.
Central banks especially in a fiat monetary system are slaves to the politicians, central banks when money is backed by a commodity like gold are exposed as incompetents more quickly because diluted gold can’t be hidden, however, digital money and paper money can be hidden if people don’t understand that money is nothing more than a medium of exchange. This ignorance of the masses when faced with deflation, will be fooled into thinking that there is inflation because prices are going up via DEBASEMENT. DEBASEMENT occurs because government workers, government regulations, and government paychecks are not based on market fundamentals.
So as an example, the cost most countries pay for the American military exists in that they’re forced into U.S Treasuriiries, now sure these countries can dump U.S treasuries, but then they have to deal with all the problems of their nation that the U.S military allowed them to ignore. Like defense spending as an example, or trade barriers to financing their public sector, which allowed them to debase their currency next to the U.S dollar.
So I see interest rates being forced up because America will have no choice, now this goes far beyond the U.S dollar as the world’s reserve currency. Even if some globalist organization says the U.S dollar is no longer the World’s Reserve currency, that doesn’t really matter, I sure as hell won’t be buying Chinese Renembi anytime soon.
The real problem for retirement income is people’s and governments’ debt levels and what type of debt they’re in. If the debt you’re in isn’t turning a profit for you, you and potentially your government are going to experience a cash flow crisis, another name for a global cash flow crisis is LATE-STAGE-SOCIALISM which is derived from Karl Marx who came up with term ‘late-stage capitalism’.
Well, most of the world as it stands to today is socialist, as even Max would tell you, the capitalists drive down prices, well… the socialist raise prices, and if the dollar is debased in the manner I explain, it’s a sign that the socialism which predates Marxism, by the way, is the problem, which is why I call what the world will experience y round 2022 as LATE-STAGE-SOCIALISM.
Interesting times ahead!