It all started with the fascism of the coronavirus. There is no exit now.
once james madison warned, “Militaries, debt, and taxes are known tools for bringing the many under the control of the few.” Now, with the debt the U.S. government has racked up during the tyranny of the coronavirus and the push for the Great Reset, , many people continue to be under the control of a few. Main Street inflation continues unabated while top Wall Street companies reap windfall profits thanks to massive government investments. Republicans, on the other hand, have refused to fight and have, in fact, been complicit in creating the current crisis.
Similarly, the media found that the administration’s statements that inflation had been overcome were not just lies. The opposite turned out to be true.
In recent months, the corporate media and President Biden have been pushing the claim that inflation is falling while the economy is growing at a record pace. The idea is to habituate the population to a permanently higher cost of living and ignore the fact that the standard of living of their grandparents is now out of reach.
We have never experienced debt-driven inflation and market distortions like this since COVID-19. This leaves us with the perplexing, contradictory, and eerie idea that even though some economic reports appear to be bullish and the stock market is at an all-time high, most people can barely get by. Economic data is being generated.
In fact, while inflation is rising, growth While there may have been some slowdown last year, prices never returned to pre-coronavirus levels. Inflation, as measured by the consumer price index, rose 0.3% in December and 3.1% in January. GDP growth looks positive. 3.2% in the fourth quarter alone. — It’s an illusion created by massive government spending and consumer credit card debt.
In absolute nominal dollars, this means our economy grew by $334.5 billion in the fourth quarter. But over the same period, the government racked up $834.2 billion in debt, which is more than double his economic growth.
After January Consumer price index numbers was released earlier this month, revealing that inflation remains at a median of 4.9%. Again, this is on top of the current price plateau built on the historic rally of the past three years.Anyone with a brain would understand that you can’t do that. hope How to get out of debt-driven inflation on the same scale as the coronavirus spending that both countries continue to sustain and even increase.
That’s why, four years after COVID-19, 40% of business owners still say they plan to raise prices in the next three months. According to a survey Ratings of 10,000 companies by the National Federation of Independent Business. Believe it or not, the worst is yet to come.
crushing debt repayments
The fateful decision of 2020 to bide our time getting out of the coronavirus crisis will never be fixed without a major downsizing of government, and Republicans won’t do it. In fact, they are trying to reverse the automatic 1% rate cut that is scheduled to take effect at the end of April.
Debt interest for the first third of fiscal year 2024 is expected to exceed $357 billion, an increase of 37% from the same period last year. The money printing needed to service the debt alone exceeds the size of the Pentagon’s budget, which is dwarfed by the costs of Social Security and Health and Human Services. The Treasury Department plans to issue $2 trillion in new bonds this year, on top of $8 trillion in existing debt rollovers at high interest rates.
In other words, this year nearly a third of our total debt will be issued at much higher interest rates than we’ve ever seen since we ran an annual deficit of nearly $1 trillion, let alone $2 trillion.
Even if the Fed wanted to lower interest rates, yields would rise because so much debt would be released into the market indefinitely. The Treasury was forced to sell late last month. record Two-year bonds worth $63 billion are at 4.69%. It also sold $64 billion of five-year bonds at 4.3%. Both numbers were record highs, and both were “tails.” When the yield is higher than expected, it is called a “tail,” and when it is lower than expected, it is called a “stop-through.”
We are now experiencing for the first time a pattern where governments are struggling to find investors and have to offer higher yields on large sums of money. The problem will only get worse in the coming months.
artificial economic boom
The old measure of GDP growth is virtually meaningless. Because GDP growth is supported by the very thing that is holding down 95% of the country to benefit a handful of corporations: government debt. This has created a highly distorted economy, where any growth we see is built on a small number of companies deeply tied to the government.
To illustrate how far the stock market has strayed from Main Street, market capitalization to GDP currently stands at a staggering 181.4%. We have a concentrated market, with the S&P 500 index up 120% from its 2020 low, while the Russell 2000, an index that tracks small-cap stocks, is down 27% from its recent peak.
But even the S&P’s never-ending bull market is a mirage.Top 10% stocks reflect his 75% of the total market, top 7 companies rise 1,700% since 2015. The “stock market” is so concentrated that a handful of companies can earn huge profits that don’t reflect their surroundings.
Even the Nasdaq, which is packed with big tech companies and recently hit new highs, is a false representation of the tech market because it is dominated by just four companies. It turned out that 95% of $1.6 trillion market cap added Nasdaq’s year-to-date shares have come from Nvidia, Meta, Microsoft, and Amazon. So it’s easy to see how we can experience a bull market and “economic growth” when 90% of the economy, including many large corporations, is shrinking.
This dichotomy is made even more acute by Home Depot, America’s largest home improvement store and Fortune 500 company. Revenue for the fourth quarter of 2023 was -3.5%. This is his fifth consecutive quarter of negative sales. This reflects how consumers, especially homeowners, are struggling.
Joe Biden can brag all he wants about the record stock market and over 3% GDP growth. But the rest of us are effectively living in a recession, burdened by record-high living costs.
Indefinite stagflation on Main Street
The U.S. is running out of housing inventory, thanks to the Federal Reserve keeping interest rates artificially low for years before abruptly raising them to combat coronavirus-induced inflation. This government-designed housing shortage has fueled an intergenerational crisis, putting homeownership out of reach for most young people.
As of December, There are only about 1 million residential units Availability has fallen by 50% since 2020, hitting an all-time low. Although prices are down slightly from last year’s peak, the median home sale price hovered around $420,700, with the average price above $534,000, marking a record high for January. As a result, most first-time buyers are priced out of the market as scarce supply is gobbled up by institutional investors and cash buyers.
Recently, mortgage interest rates have fallen a little, but prices have risen in proportion to the decline in interest rates, and the Case-Shiller index has Nationwide increase of 5.5% in December. As is usually the case, we are currently seeing a recovery in mortgage rates and home prices, but that recovery is coming from a record-high baseline after prices rose even as interest rates rose. It is being promoted.
That’s part of the reason why rents are still so high.Rent increased by at least 0.4% month-on-month on CPI 29 consecutive months. The same goes for food, transportation, car loans, and car insurance.
In other words, the administration’s statement that inflation had been defeated was not simply a lie, as repeated by the media. The opposite turned out to be true. Consumers are being exploited.Credit card debt is: Best ever The average balance was $1.13 trillion, and the average balance was $6,360, which is also a record.American spent 11.3% of disposable income The food share in 2022 is the highest since 1991. If food, cars, and shelter cost so much, how can we afford anything else? The scary answer, of course, is personal debt, which mirrors (and is caused by) government debt.
According to the new analysis The average interest rate consumers paid on credit card balances in 2023 was 22.8%, the highest level since the Federal Reserve began tracking the data, according to the Consumer Financial Protection Bureau. What happens when the inflationary expenses that consumers have paid on their credit cards over the past two years come due? Unlike the U.S. Treasury, consumers cannot sell fiat currency to pay off their debts.
Prepare for impact
This is why, barring the apocalypse, consumer and government spending that boosted GDP, and the largest handful of thriving businesses, meant America actually suffered from stagflation, an economic contraction coupled with rising inflation. This is the reason why I am here.
That’s why consumer confidence fell sharply in February, undermining all the numbers for the past few months that had originally signaled optimism reflected in GDP data. Downward revision.it was Cumulative maximum downward revision In history. Any good news at the end of last year was a mirage.
Preliminary figures for January further reflect the anemic economy data According to the report, U.S. durable goods orders fell 6.1% month-on-month, the biggest drop since the lockdown in April 2020. Orders have declined in three of the past four months, helped only slightly by an increase in government defense contracts.
So there are signs that many consumers are finally hitting a wall when it comes to cash and credit. When you run out of credits, de facto The recession most people are currently facing will become a recession. legally established Even government data can’t hide it.
