December 04, 2020

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Stagflation is Here Right Now! As Is A Depression

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US Price inflation is dead near term (except for food). M2 spiked higher than ever before (this is extreme monetary inflation, boosting gold), but that money never circulated to main street as shown by the drop in velocity. All of this, while consumption absolutely collapsed - by a record. This is STAGFLATION!

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Meanwhile... CNBC reportsPowell says GDP could shrink more than 30%, but he doesn’t see another Depression. But, the Fed's own website says that if we exhibit a drop of GDP of more than 10%, we're already in a depression. Powell is expecting up to more than three times that. We all know the Fed will pull out all stops to reverse the GDP drop and deflationary pressures. If you don't know that, Powell reminded us all of it today: Powell to tell Congress the Fed will use all tools to fight the downturn.

Ladies and gentlemen, "the downturn" is the most significant the vast majority of people have seen in their lifetimes - if not everyone. The Fed's reaction is to print much, much more money than has ever been printed in the history of this country. Consider the dollar debased - but few can see the results because the world needs to buy dollars to pay their global bills... For now!

The Fed will do whatever it can to make that little red line turn higher, including spiking the money supply past anything this country has ever seen, as well as...

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Buying everything that is not nailed down, and then start pulling nails. Take note that the we've had the biggest deficit (as % of GDP) this country's ever seen. Also note that we've borrowed more money than we've every borrowed. And coincidentally, the Fed's balance sheet has spiked more than this nation has ever seen. What a coincidence! I forgot to add, all of this has occurred in the last 2 to 3 months!

Imagine what the absolute decimation of the $USD will do to the most steady asset priced in USD...  Well, the same thing that will happen when priced in the euro and the pound (and the yuan and the yen, and...)