Yes, We Can Trust the Fed. To Keep Devaluing Our Money
By: Stefan Gleason | Published on: Oct 15, 2021
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Former Fed chair Yellen wants us to trust current Fed chair Jerome Powell when he says inflation is “transitory” and merely the effect of supply disruptions.
She doesn’t want us to focus on the fact that the central bank is now buying well over 50 percent of all new Treasury debt. Nor does she want us to be concerned that the M2 money supply is growing at a 13 percent annual rate.
Sure, let’s trust the Fed. What the Fed can absolutely be trusted to do is continue inflating.
But that means investors can’t trust fiat dollars to hold their value. Debt instruments denominated in U.S. currency will almost certainly return less than the inflation rate. Over time, bondholders risk an enormous loss of purchasing power even if the issue never results in formal defaults.
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What is a “poor” “We, The Sheeple” to do?
“Poor” is used in the sense of not rich, but yet not poor enough to qualify for the Gooferment’s dole.
Well, if you’re in the bottom of that spectrum, save your nickels and stockpile your everyday needs whenever you see a bargain. I particularly like Shoprite’s “can can” sale where the Progresso soup, which is usually near $3 / can, for a dollar if you buy ten. I was putting them under my bed and using them when I felt like soup. Have to watch the expiration dates. But I usually write them on top with a big black sharpie.
For those who are the top of that spectrum, I recommend a monthly buying program of whatever you can afford in a 50/50 gold and silver mix. It doesn’t take long before you can “amass” a decent portion of “hard money”. This presumes that you have no “bad debt” (i.e., credit cards, non-zero interest car or other capital goods credits).
You can, of course, do both.
Be aware of “shrinkflation”! That’s where the package size stays the same but the content is reduced. Unit costs are the key metric.
And, remember this when the politicians say “free”!