They’re Doing It Again and Getting Away With It
The talking heads are acting like this is all something new. $2 trillion handed out in free money.
Economists and “journalists” are picking sides and acting like something changed with the pandemic.
Some say it is great. They say debt doesn't matter anymore. Maybe it never did. The alternative is so much worse we won't even explain it.
Some say it sets a new and dangerous precedent. That nothing the government gives away will be enough because it solves no problems. The economy isn't coming back overnight, or even in months, and maybe not years.
I say it is all a farce. They're all ignoring the elephant in the room because they've gotten so used to it being there.
Yes, a massive giveaway is happening. It is completely unprecedented.
However, it has been going on for a decade now. Only the names, details, and pace have changed.
$2 trillion so far, right? Wrong.
We're up to $14 trillion between the Federal Reserve, European Central Bank, and Bank of Japan.
Plus we're already talking about the grand total coming to $5 trillion to $10 trillion in the U.S. alone.
The numbers are so mind-boggling that they defy all understanding. The scale is absurd. One million seconds is 11.57 days. One billion seconds is 31.7 years. One trillion seconds is 31,700 years.
At the high end of those estimates, the national debt will expand by around 50% in a single year when combined with our existing trillion-plus-dollar yearly deficits (around $11 trillion total).
That would add more to the national debt in one year than in the first 233 years of the USA's existence. That's out of 244 years total. It is more than all of the debt racked up through 2008 combined.
We'd jump from debt being equal to 107% of GDP to at least 160%, if not more with tax revenue dropping an unknown — but undoubtedly massive — amount.
This is a complete abdication of responsibility.
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It is the kind of thing debtors do when they give up any pretense and live large right before declaring bankruptcy.
It is one more big night on the town — surf and turf and an open bar at the private country club — right before filing the paperwork in the morning.
This money isn't coming out of the ether. This is a 100% transfer of wealth from us and our children, and their children, and who knows how many more generations.
We're the ones buying up all the private and corporate debt, not the Fed and other central banks. They're just forcing us to do it.
It is a concerted effort by regulators and officials who are completely beholden to elite interests that want to lock in gains and wash their portfolios clean of the incredible risk they've accrued.
Bankers are sighing in relief as debt they've underwritten is secured. C-suite executives are already planning their next rounds of cheap debt purchases to ramp up their “performance bonuses.”
The pandemic hasn't changed anything. It just pulled back the curtain and showed us a glimpse of what the men behind it were doing all along.
And so they spin. They're saving us, they say, and strongly implying they're saving us from ourselves.
I'm calling BS. They're saving themselves, and they've coated a bitter poison pill with just enough sugar to get a bunch of rubes to swallow it.
And if all of this sounds familiar, it is because they almost didn't get away with it in 2008.
Back then, they were too entangled with each other to pull out. The lesson was learned, but was devoid of any ethics or morals.
If only there was a way to more seamlessly push the consequences of their actions onto someone else.
If only there was a way that the ignorant masses wouldn't even see it, let alone understand it. They barely dodged that bullet once.
And so “quantitative easing” was dreamed up, and kept mutating into ever looser guidelines. We went from governments guaranteeing loans as a one-time thing to directly and indefinitely propping up private enterprise through equity purchases. Talk about a slippery slope.
The lesson was learned, and now they're all bailing themselves out before it all goes belly up. It couldn't have gone smoother. Cocktails and back-slapping after the board meeting, anyone?
It wasn't the only lesson to learn, though. Look at what happened last time a recession hit us and we were left with the bill. Look at what soared. Make sure you have some gold in your portfolio.
Adam's editorial talents and analysis drew the attention of senior editors at Outsider Club, which he joined in mid-2012. While he has acquired years of hands-on experience in the editorial room by working side by side with ex-brokers, options floor traders, and financial advisors, he is acutely aware of the challenges faced by retail investors after starting at the ground floor in the financial publishing field. For more on Adam, check out his editor's page.
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