Retirement Lifestyle Advocates
Eventually, one of two things happens. Either the currency creation continues, and the currency is eventually destroyed, or the currency creation stops in time to save the currency, only to see a period of painful deflation materialize.
Seems that deflation is emerging. And the Fed is poised to use the only tool they have left. Long term, it can’t work.
Despite the reported inflation numbers and the reported jobs numbers, the economic reality is that nearly two thirds of American households are living paycheck-to-paycheck.
The official level of US Government debt is now over $34 trillion!
Here we are again at the beginning of another New Year. Happy New Year!
Inflation has eroded the purchasing power of the US Dollar over the past two years; IRA and 401(k) investors who are invested in stocks have seen the real value of their investments fall.
Simple math dictates that this debt cannot be financed honestly but will likely require the Federal Reserve to step in and become the buyer of last resort for US Government debt.
Inflation or deflation? In my view, we are transitioning, and despite their insistence to the contrary, I expect the Fed will once again resort to some version of currency creation as we enter 2024.
I expect more inflation in things we have to buy like groceries, while things we own will see values fall due to deflation.
The US debt default will eventually arrive. Probably not an outright default but an inflationary default as newly created, hugely devalued currency is used to pay off old creditors.