True. The right fix out of this ever growing stagflation is to produce more and not merely more oil and more natural gas, but more everything.
The problem is too many dollars owing to Biden's, Pelosi's, and Schumer's America Rescue Plan.
The problem is not an increase in bank credit that would accompany an expanding economy. The economy has been contracting for awhile, since 2008 in true terms. Federal Reserve Board of Governors papered over that contraction with more than a decade of QE and ZIRP.
See my works:
- Booming Biden Economy? Oh Really? Likely the USA Has Remained in Economic Depression Since 2008.
- Federal Reserve Continues Hashtag Fake Central Banking into 2022
QE was high for years, but after a small sell down of QE instruments, FR BoGs took QE hyperbolic over politicians' Covid lockdowns to pay for Congress' debt.
Those stimmy dollars went into the hands of the people rather than into stonks, into which previous QE had been sloshing.
The Simplest Model of the U.S.A. Economy
If the right side grows faster than the left side, prices "fall," that is, the left side has rising buying power. If the left side grows faster than the right side, prices "rise," that is, the left side has falling buying power.
Right now, the left side is too high relative to the right side. Unless one robs the people and destroys much of the left side, the only other way to fix this is increasing massively, the right side. If dollars and checkable deposits can not be retired permanently from the economy, i.e., destroyed, the only way things get fixed is if the right side grows faster than the left side until there is high efficiency in the circulation of dollars and checkable deposits.
Instead, the Federal Reserve intends to slow the economy with Fed Funds Rate (inter-bank lending rate) hikes. That will kill borrowing by banks from other banks somewhat as well as raise the Prime Rate and from that all lending rates to corporate entities and individuals. Hence, that will kill growth. Said another way, FR BoG will try to engineer what they call and what every egg head Ph.D parrots, a "recession".
But since there has been no sustained recovery since 2008, all they will do is push Americans further into economic depression. During Trump's presidency, a recovery began to take hold, but that recovery was short-lived. The politicians' mandated lock downs killed that Trump recovery.
You should be readying yourself for the inflationary depression phase of the Super Depression in which you are living. Products will be hard to come by as it is now along with high prices for those products.
The European Union and Russia
It will only get worse as Europeans screw themselves by cutting off themselves from Russian natural gas and Russian oil. Europeans will produce less. That will cause the EU to produce less. Lower production will mean fewer exports to the USA. Right now, the EU member states combined are the second biggest trading partner with the USA.
Until at least 2020, EU Europeans had been running a massive trade surplus with Americans. Expect that to shrink significantly now. That will mean even fewer products for Americans to buy.
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| The largest USA partners, total trade in goods in millions of USD, 2017 |
There is much upside for Southeast Asian exporters and India if they can get the energy they need to fuel production. Prospects are good for non-aligned exporters from India, Vietnam, Malaysia, Thailand and Indonesia.
Stupidly though, the Japanese and the South Koreans have joined in the G7 / WEF / globalist sanction regime against Russia. Otherwise, they could increase their share of luxury car sales to Americans.
Gab It
