The Euro Dollar, Domestic Prices In The U.S, Federal Reserve Interest Rates, Private Bank Behavior, Joe Biden’s Fiscal Policies & ESG – December 5, 2023
It might look like a price war on the surface, but what’s happening with prices in terms of the U.S. dollar is quite simple. First, let’s talk about the Euro Dollar market, which is U.S. dollars being used outside of the United States; that entire market is DEFLATIONARY, meaning that economic activity in U.S. dollars is shrinking, which has led to U.S. dollar prices outside of the U.S. coming down.
This is a clear sign of GLOBAL DEFLATION; with that said, there are a lot of PRICE CONTROLS in the United States, and the U.S. obviously uses U.S. dollars, and price controls, in MOST instances, don’t allow prices to DEFLATE. Even rent controls don’t allow prices to deflate.
Prices that aren’t allowed to inflate either lose their size, quantity, and quality or disappear from the market altogether and this is also an inflationary event, especially when you understand that higher quantity purchases, along with fierce market competition, lower prices. Via Environmental, social, and corporate governance(ESG) regulations, DOMESTIC U.S. prices can’t deflate, which means that if the Federal Reserve lowers borrowing costs in this ESG-dominant environment, what will likely happen is more rampant inflation, especially if the Federal Government of the United States, imagines lower interest rates as a green light to increase spending and tighten the screws on ESG regulations.
Because the popular perception of most is that lower interest rates equate to prosperity, you’d have to assume that the government approach will be to accelerate spending if interest rates are lowered; with that said, PRIVATE BANK behavior will be different; the private bank is forced to operate in the real world economy and the private banks, won’t see lower interest rates as a green light for them to increase their spending/lending.
The same thing happened under Barack Obama; the only thing that inflated under Barack Obama and Donald Trump were asset prices, which was a sign that the DOMESTIC economy was having problems. What differs with Joe Biden is that he’s beholden to ESG aristocrats, and his entire fiscal policy on paper is INFLATIONARY.
How do we fix this problem, you ask? Austerity measures, if you’re saying to yourself, that’s not going to happen anytime soon, well, I agree with you #LateStageSocialism My point is until austerity measures happen, this is the new world, and with this new monetary system, all roads point to consumer price inflation, so you’d be wise to familiarize yourself with the global economy, before making any major purchases as everything moving forward priced in U.S. dollars will be based on the fiscal policies of that nation.
Interesting times ahead!