Is this really the future we have to look forward to?
CNBC has a headline that reads:
As inflation hits another record, here are 5 steps you can take to protect your money
They could have written about what causes all prices of goods and services to inexplicably rise. They could have explained how handing out stimulus checks to the general public, or any other monetary scheme from the Fed, has a way of increasing poverty and inequality. However, economic theory being ignored, they took advice from wealth managers.
The number one suggestion the experts recommend is to “stay invested in equities,” as explained:
The reason for that is that stocks have a strong track record. Over more than 90 years, equities have had returns in excess of inflation…
Unfortunately, past performance is not indicative of future results. It’s a phrase all financial experts should be aware. Even if the last 90 years of equities had returns in excess of inflation, that says little about stock market returns for this year or the near future. This also ignores the fact inflation calculations are dubious at best.
The 2nd suggestion is to “adjust your spending.”
A recommendation for those on fixed income is to cut back on “variable expenses,” such as entertainment. However, surely the vast majority of those on fixed incomes, like retirees, are not struggling because they spend too much money on Netflix. Even if entertainment is removed from a retiree’s budget, there exists far more important and costlier expenses that continue increasing in price such as medical, groceries, and rent.
The three remaining pieces of advice are equally superficial: negotiating debts, rethinking gas consumption, and bundling purchases. Divesting out of the US dollar into gold, silver, crypto, or buying hard assets is never offered as an alternative to cope with the perpetual loss of dollar purchasing power.
Even worse, the usual pandemic conditions and supply chain issues are used as the cause of price increases, with no consideration given towards the Fed’s culpability in creating these issues. Absolutely nothing was mentioned in reference to the trillions of dollars created during the pandemic to pay for various stimulus programs that did nothing to strengthen the US dollar.
Maybe Chair Powell was right after all? Could it be that some people are just “prone to suffer,” as he stated last week:
And so inflation right away, right away forces people like that to make very difficult decisions. So that’s really the point. I don’t -- I’m not aware of, you know, inflation literally falling more on different socioeconomic groups. It’s -- that’s not the point. The point is some people are just really in -- prone to suffer more.
Imagine working your entire life only to find that near the end of it, your savings, like your currency, has been inflated away. Or being a young person, knowing the country you’re inheriting is one that forces you to chase yield to beat ever increasing inflation, all while requiring you to pay interest on trillions of dollars of debt to fund a system antithetical to life, liberty and the pursuit of happiness.
It’s painful. Hundreds of millions of Americans are affected by the actions of such a small group of individuals who unapologetically lack care for those outside their immediate circle. If Powell is right about one thing, it’s that inflationism, as a monetary policy, forces people to make difficult decisions due to no fault of their own. Maybe some people are really just prone to suffer (at the hands of central bankers), after all?
