Our Bizarre Economy 2.0 Is A Spending Based Illusion
To say the economy we are seeing during 2020 is a bit bizarre is an understatement. Nobody predicted anything like we are seeing today. As money continues to be created out of thin air we are witnessing bailouts and crony capitalism on full display. Another factor playing into this circus is both Presidential candidates are engaged in a full-court press to buy the votes of Americans. This has resulted in a stock market rally based on the idea that more stimulus is just around the corner. Those interested in getting a handle on what is really happening should keep front and center a few facts that might help them better understand just how whacked out and bizarre things have become.Every trillion dollars the Federal Reserve and American Government injects into the economy adds a massive $3,333 per man woman and child in America. Recently aid packages from Washington alone have put about three times that into the mix. The whopping ten thousand dollar bang dished out for each of us was bound to move the economic needle. Adding to this distortion is how it has enabled countries throughout the world to enact similar stimulus packages without lowering the value of their currencies in relation to the dollar.
The true state of the economy has been papered over by the injection of trillions of dollars of freshly created money being injected into the mix. This has resulted in a liquidity bubble that masks reality and perpetuated several myths that are destined to come back and bite us. The assumption that unlimited monetization is sustainable and cost-free has never been proven to be the case. Today those promoting it as a solution to our problems claim are assuming that soaring public debt is no problem so long as interest rates are ultra-low and have been assured by central banks across the world this will be the case going forward.
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