Inflation Could Soar; If It Does, It Won’t End Well

Higher Inflation Will Have Dire Consequences

Higher-than-normal inflation is coming to the U.S. The writing is on the wall. Be very careful. High inflation will have dire consequences and may not end well.

You see, over the past decade or so, the U.S. The Federal Reserve was printing money and that money was going to the banks, just sitting there. has been printing money and keeping interest rates low. This has created all sorts of monetary inflation. The money supply has gone through the roof. In 2020, the Federal Reserve increased the pace of its money-printing further. In fact, it wouldn’t be wrong to say the Fed’s actions were like throwing gas on a fire.

financial crisis

As the Federal Reserve was printing money, the U.S. government was spending without remorse and racking up immense budget deficits. In 2020, the government accelerated its spending. That spending was needed because there was a pandemic, and if nothing was done, we would have had an absolute economic collapse.

Inflation Follows When Money Moves Around

So, where does inflation fit in here?

Economics 101: Inflation happens when there’s a lot of money in the economy and it moves around.

Over the past decade, there was one thing missing: money was not moving around. Why? Even though the Federal Reserve was printing money, that money was going to the banks, just sitting there. It was not moving around.

Now the situation is completely different. During the COVID-19 pandemic, the money has actually gone into average Americans’ hands. This did not happen after the financial crisis of 2008–2009. Plus, there’s a chance that even more money will flow to them as part of the stimulus package from the Joe Biden administration.

When Americans have money in their hands, they go out and shop, and this moves the money around. In turn, we could get higher-than-normal inflation.

Look at the Bond Market to See Where Inflation Is Headed

Dear reader, inflation may not be talked about much in the mainstream media these days, but it shouldn’t be overlooked.

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