Inflation is a huge problem in the US. The federal reserve and mainstream media are still denying the effects of inflation. The data is extremely clear that inflation is increasing and it is increasing fast.
The temptation for governments to print money is almost like that of giving a child the key to a candy store. The US government has dealt with this in extremely inadequate ways.
When the pandemic came around, the government threw around stimulus checks and stuffed massive amounts of money into circulation. 80% of all US currency has been printed in the last year.
That is an increase from 4 to 20 trillion dollars in circulation, in 12 months. This massive inflation drives all prices up for assets and consumer goods.
The rich own large amounts of these assets and thus are not harmed as much by inflation.
There has also been a massive debt crisis in America. This debt crisis is also worsened with inflation because your death increases by almost 80% to counter inflation. When did this inflation begin?
1971: The fateful year.
You might have heard of the Bretton woods system. This system required the US dollar to be pegged to the price of gold at $35/Oz. The Bretton woods system was extremely efficient and disallowed major inflation as the US could not print more money than they had in gold.
Other currencies such as the British pound, the German mark, and the French franc were also pegged to the US dollar which was in turn pegged to gold.
Because these currencies were pegged to the US dollar, their governments wanted to exchange their gold for dollars. This way, the US stockpiled more gold by exchanging.
But, the temptation to print money was too powerful for the government. To fund the US involvement in the Vietnamese war, the government printed way more money than they could possibly have in gold.
Other countries started noticing this and panicked. They thought, “What if tomorrow, the US government announced that now gold was worth $45 per Oz.” This would mean that other countries would have to buy back their gold at insanely high prices.
This was the perfect way for the US government to manage their involvement in the Vietnamese war, but it would also mean that other countries would get totally betrayed. This is one the UK and France decided to quit out of the Bretton woods system.
France sent a warship to the US to pick up their gold. In the year 1971, president Richard Nixon was having none of it. In one quick statement, he declared the suspension of the conversion of US currency into gold or other assets. Now no one was able to convert the dollars into gold or their gold into dollars.
For the first time in history, the currency wasn’t pegged to anything. The dollar had no real value. This is the origin of Fiat money- Money that has no real or intrinsic value. This allowed the US government to print all the money that they wanted.
What happened in 1971 was the greatest con in the US. With this, the Bretton Woods System fell.
What is happening now?
Inflation has skyrocketed. The US government has robbed 80% of your wealth in the last year and this reflects in the prices of goods and assets. The US is currently treading on a very thin line.
There is very little pressure keeping inflation down yet there is extreme pressure pushing inflation up. We could see some of the highest inflation to ever happen in the US. The US government is showing all of the mistakes that lead to high inflation in other economies.
There are many factors that lead to inflation and they are all at a boiling point. Gas prices are currently up by 58%.
There was an article that was recently posted on Trump’s website called “How is inflation affecting you.” In this post, there are many infographics that show the increase in the prices of several goods.
This infographic shows that gas prices are up by 58%, rental car prices are up by 37%, used car prices are up by 31% and hotel prices are up by 26%. Inflation is hitting the US extremely hard.
It is difficult to deny any real correlations between the government’s inadequacy as to printing money and the actual results of this. Despite the fact that there is inflation in every industry in America, there was no big cover story or any story for that matter.
The federal reserve and Biden’s government have mismanaged inflation so much that many people are worried about where inflation might go next. This also puts Biden in a bad position. There was already a debt crisis going on in the USA but his fake promises during his campaign worsened it. Biden promised that he would pay back all of the student loan debt in the USA.
He did not. On the 29th of October 2019 Biden tweeted “Paying off your kids’ student loan debt can feel overwhelming. We need a President who understands that.” On the 13th of December of this year, news came around that Biden wouldn’t be extending student loan relief.
USA’s current predicament
The USA’s current predicament is on a thin line. At any moment inflation could skyrocket and we could see the highest inflation rates in the US since World war 1. Since this has been going on for a long time, inflation can be worse than the worst inflation we have seen.
Hyperinflation is plausible in the next 5-10 years. Federal reserve’s and Biden’s mismanagement has made this an even greater issue. The debt crisis in the US has also worsened because of inflation and vice versa. Household debt has more than doubled since 1971 and the number of lawyers has quadrupled.