Donald Trump says a ‘big number’ is coming soon. Maybe tomorrow…
And he’ll make sure it’s a big number. One with lots of zeros behind it. 12 of them, to be precise.
Knives come out
According to the press, ‘15 to 20’ Republicans are digging in their heels…and lighting candles to the old gods. In the recesses of their minds are dim recollections of ‘fiscal responsibility’…and perhaps even some old newsreels from Germany in the early 1920s.
They are worried that another big number will blow up the deficit…bankrupt the nation…and cause misery to millions of American households.
Those 15 or 20 residual ‘conservatives’ are the ones Trump will stab in the back.
Nothing personal. No surprise, nor any matter of principle, involved.
Donald Trump has an election to win. And he’s not going to win it by trying to hold the line against boondoggles, budget busters, and bankruptcy. He’ll side with the Democrats; together, they’ll wreck the nation.
But that’s how it works…when you have a late, degenerate empire dependent on printing press money. Your incentives become perverse; the knives and zeroes come out; the gods go AWOL.
FREE ‘Crisis Money Guide’ explains how a currency crisis could suddenly unfold and how to survive it. Click here to claim your copy now.
As we guessed yesterday, the total of additional ‘transfers’ — to be announced — will probably come to $2 trillion.
And now, Bloomberg lays out where this leads:
‘…we may be on the brink of an inflationary period, which would be bad for both stocks and bonds. The Federal Reserve has been flooding the financial system with cash: In just three months, assets held by the Fed ballooned by two-thirds, to almost $7 trillion, from $4.2 trillion in early March. Both monetary and fiscal stimulus have been larger than they were during the financial crisis.
‘People are clearly worried. Since May, polls conducted by the Conference Board show that consumers’ inflationary expectations have shot up to above 6%, from about 4.5% before the COVID-19 outbreak.
‘Goldman estimates the price [of gold] could rise even to $3,000. All it would take, the bank says, is for inflation to hit 4.5%, or stay at a lower rate, such as 3.5%, for a sustained period. We’ve grown so accustomed to stability in the cost of living that any uptick would send traders scrambling for gold’s protection.’
Gold will go up when (if you followed us yesterday) people discover their coats are missing.
But we’ll come back to that in a minute.
This past weekend, the locals in the Calchaquí Valley celebrated Pachamama. They were christianised by the Mercedarian Brothers in the 17th century. They celebrate Christmas and Easter, go to mass, and respect Catholic rites.
On the first day of August every year, they pay their respects to the ancient Indian deity, Pachamama…the goddess said to be the mother of the four key elements — earth, water, sun, and the moon.
Our celebration of Pachamama at the ranch began well enough. We gathered at our foreman Gustavo’s house for dinner. The traditional corn soup, locro…many different cuts of grilled meat…salad and vegetables were served. And wine.
Gustavo knelt down, swept the dirt off the stone, and raised it. He dug down a little and pulled out several liquor bottles, some full, some empty.
Then, he lit a fire in a steel pot, burning aromatic herbs, and lowered the pot down into the hole. Then, each of us knelt down, took off our hats, and swept the smoke towards us, breathing in the fumes, communing with Pachamama herself.
This accomplished, Gustavo raised the pot back up out of the hole. Next, he lit cigarettes and pushed them into the sides of the hole.
This was followed by putting the food offerings…and bottles of alcohol…into the hole.
Next, we took turns serving the Pachamama — ladling in the food and pouring in the alcohol.
Your editor takes his turn serving Pachamama
And finally, when all the food and drink had been dumped into the hole, Gustavo filled it with dirt and carefully replaced the stone on top.
The party was just beginning.
Back at the house, we asked both Pachamama and our Christian god to bless Gustavo’s new car.
Blessing Gustavo’s new car
This done, your editor took advantage of a lull in the festivities to get back to chopping firewood.
The rest of the group, though, continued drinking and carrying on until 5 am.
The only way
But let us move from the sacred to the profane…
That is, when the zeros start rolling into camp…the hole gets so deep, you can’t climb out…and people realise they’ve been robbed…
And that’s when the gods leave town…and gold goes up.
As we pointed out yesterday, the federal government will likely transfer as much as $12 trillion this year.
The money has to come from somewhere. It can’t come from current income (there ain’t nearly enough)…or savings (who’s going to lend to the biggest spendthrift in the world, with a current yield on the US 10-year note of barely above 0.5%?).
The only possible source is larceny — stealing the US capital. In other words, the only way the feds can ‘transfer’ so much wealth is by mining the bedrock wealth of the country, leaving it with just heaps of debt, piled up like tailings on the edge of the hole.
That $12 trillion represents claim tickets on real wealth — houses, cars, factories, stocks, bonds…coats and hats…all across the country.
But the number of claim tickets increases far faster than the real wealth it aims to buy. The result? Inflation.
You’ll go to buy a car, and instead of the one claim ticket you have in your hand…you’ll need two.
Instead of the $5 you expected to pay for a cup of coffee…the barista will ask for $10…
And instead of the one Jackson and one Lincoln you had in your hand, ready to pay for your oil change at Jiffy Lube, you’ll be asked for two Jacksons and two Lincolns…and maybe, a Ulysses S Grant, too.
And when people see their wealth disappearing…that is, when the big numbers get even bigger…they will find they have a lot more claim tickets than coats…
And they will look for protection…for something that can’t be readily ‘transferred’ away from them…something that has always provided a refuge against profanity:
For The Rum Rebellion