In 1944 Mises wrote: Omnipotent Government: The Rise of Total State and Total War. He provided a first-hand account of the horrors of government, something America’s founding fathers were familiar with all too well.
How bad it will get does not have an easy answer. It depends on the time frame, context being highly subjective. The freedom-liberty crowd prepares with home security, firearms safety training, purchasing hard assets, buying the dip, homesteading etc. Rather than write a prescriptive list of ways to prepare for the potential outcomes, it may be more fruitful to explain the trajectory of things to come under global socialism and the anti-capitalist central banking system.
News headlines prepare us for what’s ahead. On Wednesday, Reuters reported subtle, but grim news from the latest European Central Bank meeting:
The era of ultra low inflation that preceded the pandemic is unlikely to return and central banks need to adjust to significantly higher price growth expectations…
Price and monetary inflation are within control of central banks and world governments. Stop increasing the money supply and this “inflation problem” would correct itself. Yet that is not on anyone’s agenda. When they say the unpreceded “era of ultra low inflation” is coming to an end, we should assume this means forever.
From the same European forum, Fox News reported a quote of Federal Reserve Chair Jerome Powell admitting:
I think we now understand better how little we understand about inflation… No, honestly, this was unpredictable.
Further:
The U.S. economy is actually in pretty good shape.
Quite outlandish, especially with headlines two weeks ago from media outlets like Newsweek reporting:
The U.S. is Already in Recession—If The Atlanta Fed Is Right
How to prepare is up to each individual. The certainty ahead lies in the motivation of our central planners, who, whether pretending to not understand, or are intentionally being deceptive, the outcome will be the same.
Whether inflation lowers to 2%, or stays elevated, nothing changes. They have a definite play book they will stick to until the bitter end.
Should CPI or PCE inflation miraculously reach 2%, the Fed will use this opportunity to expand the balance sheet once a recession or market crash hits. Should inflation readings never get this low, a new narrative will be used, perhaps that we’re in a recession so they must stimulate the economy no matter the cost.
Economic truth, the long-run, or the “good of society” doesn’t matter to the central planner. They are too well insulated to be significantly impacted by any of their decisions. The path of the Fed’s balance sheet, US debt, money supply, and prices can only increase with time. Despite new highs in the stock and housing market, society will be worse off than the years prior. As time moves forward, dollar purchasing power will weaken.
Central banks/governments have been destroying purchasing power, currency debasement, for as long as they’ve been in existence. It’s not new, nor inventive. The recurring pattern of destruction is evidenced throughout all of history.
We can hope for a better tomorrow; however, it won’t be possible as long as the Federal Reserve exists. Either society must step up to stop the Fed, or one day, there will no longer be a society.
