Demise at the Hands of the Governing Class — Outlook On Inflation

The vast majority of the experts, including Wall Street, are suggesting that it’s highly unlikely that long-term inflation is going to get out of hand.

Joe Biden

Aren’t we silly, dear reader, fussing over inflation?

As if we were threatened by a terrible scourge…as if the Huns were at the gates of the city, ready to rape and pillage all within.

Well, we can relax. We have it on the highest authority in the world…the US’ numero unojefe de todos los jefes

…the brightest star in the whole firmament of Heaven (at least according to democratic theory)…

…that inflation is nothing to worry about. It’s not going to ‘get out of hand’, says POTUS.

Yes, the latest readings are shocking. Here’s MarketWatch:

Federal Reserve Chairman Jerome Powell and many economists were surprised by how much inflation has accelerated. May and June prices, as measured by the consumer price index, were up at 8% and 11.4% annual rates over their prior months.

And yes…with a US$3 trillion federal deficit to finance…central banks all over the planet ‘supporting’ their economies with more ‘liquidity’…and the yield on the 10-year Treasury bond sinking (signalling stagflation ahead)…

…a person with some residual common sense might be alarmed.

‘Whoa…’ he might say. ‘Time for a rethink.’

Collateral damage

Fortunately for the authorities, thanks to public schools, Facebook, TV, Republicans, Democrats, and mainstream media…there’s not many people with common sense left.

And those remaining who can still think at all can see that the situation is completely hopeless. So there’s no reason to get worked up about it.

Ultimately, inflation is just a very pernicious and corrosive form of taxation. It ruins the economy and corrupts the society; it reduces real economic output and makes people poorer.

But these are just collateral damage. The important thing is that it permits the feds to do things the public is unwilling to pay for.

And Joe Biden is right; inflation is not ‘getting out of hand’. Just the opposite. The authorities have a firm grip on it.

And they intend to use it…like a sledgehammer on an egg.

Agenda of the governing class

Coming into focus, more clearly here in Europe than in the US, is the metastasising agenda of the governing class (GC).

Emboldened by its new power (it shut down much of the world’s economy)…enriched by printing new money (an estimated US$27 trillion was put into service in the last 18 months)…and enamoured with its own list of fantasies…

…it aims to bring its hammer down hard.

It’s no longer enough just to keep the party going, as we hypothesised yesterday.

Nor is it enough to merely shift wealth, power, and status to itself, as every GC does.

Nor will it suffice to make a fairer, better, safer world, as it claims to want to do.

And certainly not a richer world, either…though that too, is a pretense for many of its actions.

Nope. Now, the ruling elite intends to use its new power to create a new world. Here’s the quote from European Central Bank head, Christine Lagarde, that we showed you last week:

As the pandemic passes, we need to shift the focus from preserving the economy to transforming it. This will require us to redirect spending by both public and private sectors towards the green and digital sectors of the future.

Brave new world

Ms Lagarde has no more idea what’s coming down the pike than we do. She doesn’t mean to prepare for the future…but to warp it so it suits her.

In a free and honest world, an economy serves the people and adapts as their needs and desires change. How much they want to work…what they want to buy…how much they save…how much they invent — they decide for themselves.

But in this brave new world, the economy — guided and controlled by central bankers and treasury chiefs — will be brought into service to do, not what the people want, but what the GC wants.

That is, it will not respond to the many…but to the few who control its money…and its laws.

What this new world will look like exactly, we don’t know.

But we don’t think you’re going to like it.

More to come…

Regards,

Dan Denning Signature

Bill Bonner,
For The Rum Rebellion

PS: The Rum Rebellion is a fantastic place to start your investment journey. We talk about the big trends driving the Australian Economy. Learn all about it here.


Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries.

A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities.

Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally.

With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance.

Bill has been a weekly contributor to The Rum Rebellion.


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