Is Cash really Trash in The Coming Red Hot Inflationary Market: Investors have piled a record $57 billion into US stocks over the past week – March 20, 2021,
So to those of us who see deflation and not inflation, what that means from my perspective is the ber jumping out the window, not so much the bull charging up the stairs. However, o be fair, who couldn’t blame most people for seeing this government-fueled inflationary bull run as inflation.
In all of the madness, a lot of people are forgetting about Mainstreet and the problems being created by propping up asset prices, to pay for mostly GOVERNMENT promises of the past. So, the difference with this modern economy is all of the mal-investment being created that’s creating a lot of junk that’s not necessarily in demand, or I should say not going to help society be more productive.
The argument for red hot inflation has mostly to do with the Federal Reserve financing the silly ventures of the U.S Federal government, but what’s becoming more and more apparent is poverty levels in most Democrat-run states, which for the most part have a cash flow problem.
Why I see this being deflationary for America in the year 2022, has to do with 2020 and 2021 debt deferrals as well as the artificial pay increase Americans are getting for being less productive. The whole purpose if I’m not mistaken when most people make the argument for a Universal Basic Income is for people to be more productive?
But I know my history about the current UBI called Welfare and this has actually made people less productive. So what most people who’ve never been to a socialist country fail to understand is that when you give people the option to be rewarded not work, most people will take you up on that offer.
Once people opt for free money, what happens is there becomes a balance of trade deficit and what most people don’t understand about Progressive ideologies is that once, people are rewarded for doing nothing, they’ll do EVERYTHING to keep that gravy train going, including accepting the fact that society is crumbling in front of their eyes, because remember, in their minds they imagine that someone else, some imaginary greedy person will show up and clean the mess up for them, but as everyone knows, the government has no money and politicians are usually horrible at negotiations, so as a city crumbles, the price tag to fix it gets higher and higher with all the free money the city gives away.
The Stimulus Bill Snowflake Generation
So although gambling on cash being trash is a good bet, it’s only a good bet for as long as interest rates remain low. This actually means that the real economy is deflating not inflating. If people believe that the interest rates will remain low forever, then America is headed for hyperinflation, there’s no getting around it.
Now, I’ve said it before, this doesn’t mean that U.S dollars won’t have more blue outside of the United States than they have in the United States, but via government spending, American dollars will buy less, which equates to a deflationary economy if the government can’t continuously pass stimulus bills.
Higher asset prices with no infrastructure to keep it afloat is a recipe for disaster, keep that in mind when you’re betting on inflation!
Interesting times ahead!