Retirement Lifestyle Advocates
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.
As crazy as currency changes were in 2023, it’s highly likely that 2024 will see even more significant changes.
Seems that we are seeing evidence of both inflation and deflation, a direct result of currency creation and debt excesses.
While the timing of this inflation followed by deflation cycle is difficult, even impossible to predict; the outcome is, in my view, inevitable.
With every day that passes, we are moving closer to a debt crisis that is simply inevitable.
It’s an often-overlooked point: currency devaluation makes reported economic data appear better than it really is.