December 2015 U.S. CPI was 0.7% annualized, core CPI was 2.1% annualized, and core PPI was 0.2% annualized, resulting in the Fed choosing to make its first rate hike since the subprime mortgage crisis.
March 2021 U.S. CPI at an annual rate of 2.6%, core CPI at an annual rate of 1.6%, core PPI at an annual rate of 3.1%, the inflation situation is obviously more severe than in December 2015, but Powell is constantly telling you, do not rush, rate hikes are still far away na ……
It used to be often said that the Fed’s sole purpose now is to get the world into an era of hyperinflation, to dilute the high debt of the U.S. government through hyperinflation, and to help the U.S. government tide over the difficult times. Now, the Fed has put its cards on the table and told the whole world – I want inflation! I want inflation! I want inflation! In the past, the Fed’s medium-term inflation target was 2%, but this year, even if it reaches 3% or more, Powell will still tell you not to worry about raising interest rates ……
From Powell’s views on monetary policy during the subprime crisis, he belongs to the typical hawk, but now, the hawk has broken its wings, all stemming from the high debt of the U.S. government.
As previously stated, after the collapse of the Soviet Union based on geopolitical, fiscal and many other factors decided that the world entered an era of low interest rates, in a period of low interest rates money has the conditions to accelerate expansion, the global central banks to print money at full throttle. Although some people say that this promotes economic development, and perhaps this statement is also true, but low interest rates, currency over-issuance at high speed naturally let the residents of the gap between rich and poor seriously worsened! This is the most classic conclusion of economics.
According to data released by the Federal Reserve, in the third quarter of 2020, the top 1% of wealthy Americans own 31% of the total wealth of society …… while the bottom 50% of Americans hold a total of 2%! In the past, we generally use the “rich can be invincible” as the ideal state for a person to become rich, but today, the United States and many countries have achieved the “ideal” of the rich, along with the vast majority of people in the food and clothing anxiety!
A large Eastern country just a “fly” has 2,714 sets of property, a total area of 433,000 square meters, and more than 40 pieces of land, a total area of 350,000 square meters, external debt of more than 6 billion yuan. But I wonder how many other families are still in a state where it is difficult to find a house, running around all day long for food and clothing.
Today, the serious deterioration of the gap between the rich and the poor is a typical feature of almost all countries in the world, which is the inevitable result of the high-speed issuance of money. The serious deterioration of the gap between the rich and the poor is one of the fundamental reasons for the declining number of newborns.
In 2000, the per capita disposable income of urban residents in China was 6,256 yuan, and in 2020 it will be 43,834 yuan, an increase of seven times of that in 2000. In terms of first-tier cities, house prices have risen about 20 times over the past 20 years, with second- and third-tier cities also mostly above 10 times. It is important to note that housing price is the most basic price of a society, which means that housing price will drive the price of all industries, otherwise the employees of these industries cannot afford to live in houses and pay mortgage, and their children cannot afford to go to school.
Although the per capita disposable income of urban residents has increased to seven times its original size in 20 years, the real survival pressure of residents will keep increasing when housing prices increase 10-20 times, which is understood by kindergarten children. When they can’t afford to have children, and even if they do, they can’t afford the price of health care and education, people will have to tightly control the lower half of their bodies, and the fertility rate will naturally decline continuously.
This is actually the inevitable result after social wealth is monopolized by a few people, stemming from the fact that in order for society as a whole to maintain a high fertility rate, it is necessary to average social wealth so that everyone in society can afford the cost of raising and educating children. Some people definitely say that life has gotten better over the past few years, and this may seem true on the surface, but it is important to see what the internal reasons for the change are.
The reason why people feel that life has gotten better in the past few years is just the result of debt (car loans, mortgages, various consumer loans, etc.), and debt means mortgaging one’s labor for the next few years or even decades to be consumed today. While the illusion hides the reality to some extent, people act very honestly and when they are ready to have children they get rid of the illusion and do the math and make the most honest decisions.
So you’ll see that as housing prices continue to rise, fertility rates continue to decline, stemming from the fact that people are under increasing pressure to survive and can only manage the lower half of their bodies. At the same time, the higher the price of housing in the world today, the lower the fertility rate, the first is East Asia, then Western Europe, Central Europe, and then North America …… This is also supporting that housing prices are one of the main factors suppressing fertility.
Moreover, this “contraceptive pill” seems to be long-acting. In Japan, since the bursting of the housing bubble in the late 1980s and early 1990s, which left many people homeless, the more serious result was that fertility rates never recovered, resulting in negative population growth for many years ……
Printing more money – asset price inflation – deterioration of the gap between rich and poor (material wealth into the hands of a few) – fertility rate decline, mankind has finally embarked on the road to self-sterilization! The sacrifice is life!
But “contraception” is only the first step in the “effect” of the money printing machine.
The U.S. government debt (bonds) is the margin issued by the U.S. dollar, that is, in the past decade or so the Federal Reserve high-speed money printing at the same time, the U.S. government debt is growing at a high rate, to the beginning of March when the U.S. government debt rate has reached more than 135% of the crisis level, at this time, can only promote high inflation on the U.S. government debt dilution, to help the U.S. government survive.
So there you have Powell’s attitude today – I want inflation! I want hyperinflation!
The low inflation to hyperinflation transition is costing lives!
The global past thirty years is a low-inflation environment, prices are relatively stable, the majority of low-income class can still maintain food, can be driven by the Fed to the high inflation range, prices continue to rise at high speed, serious problems will emerge. In the rich-poor gap has been seriously worsened today, countless people at the bottom will face a crisis of survival! At this point, violent social unrest will come, and this is a time when life is exceptionally fragile.
“Contraception” is to limit the birth of life, and when the existential crisis comes, it is the life that has already been born that is threatened! But the inner meaning remains the same – the threat is all life! This is the second step of the “drug effect” of the money printing machine.
If you are careful, you will say that the second step of the “medicine” should be limited, and that the inflation triggered by the rise in commodity prices is an imported inflation, at best a wildfire. The reason for this is that even during the 1997-2008 bull market in commodities, the magnitude of imported inflation was limited and not enough to cause devastating damage to society.
The development of imported inflation is followed by a rise in interest rates, which is followed by a contraction in real estate turnover and threatens fiscal revenues, and for those countries whose fiscal revenues are heavily dependent on real estate, the fiscal balance will be ruthlessly broken. The government’s ability to raise funds through debt issuance is constrained in times of hyperinflation. Eventually, the government will be forced to open a fiscal deficit monetization.
Once any country enters the gates of fiscal deficit monetization, what eventually results is hyperinflation! At this point, the wildfire of imported inflation becomes a raging fire ignited by the monetization of fiscal deficits, and this threat is deadly.
So, the Fed’s push for hyperinflation internally aims to dilute the U.S. government’s debt, and externally threatens the fiscal balance of some countries, and fiscal contention is always the ultimate war of confrontation between countries.
Then comes the third step of the “drug effect” of money printing: high speed money printing leads to the concentration of social material wealth in the hands of a very small number of people who belong to the class of vested interests and have the ability to control the policies of a country.
When high inflation threatens the survival of the majority of the underclass, a society becomes like a powder keg, which is a hotbed of revolution. At this point, the minority, in order to avoid blowing themselves up, must transfer the anger of this part of the population, there are two channels of transfer: First, the establishment of an internal “enemy” for this part of the population to vent their anger. So you will find that in the history of most countries there are always periods of chaos and confusion, where two or more factions are fighting with each other and even with their lives, a script directed by a few people. The fight for land and the division of land will also arise in this situation. Second, foreign wars are waged. Of course, the reasons for waging war are always very lofty, in the name of whatever nation, country, and so on. But whether it is to provoke internal strife or to wage war externally, it is still the game of life, and this is the third step of the money-printing machine “medicine”.
The third step in the “medicine” of the money printing machine is to speed up the printing of money, squeezing the living space of the majority of people, the essence is the game of life.
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