In the winter of 1980, a gentleman from Tampico, Illinois sat down and recorded 44 seconds worth of video footage. It was a profound insight into what is the real cause of inflation and monetary instability. Only 9 years earlier our nation had made a decisive and tragic move to unsound money. So as the lights glared and the camera rolled, Reagan calmly explained the single greatest threat this nation has ever faced. Unfortunately, this Ad was never aired, but it is surely prescient for our day and for what is sure to come.
But the ramifications of unsound money are more extensive than the 70’s price inflation that Reagan referenced. U.S. government fiat money was to create more widespread havoc than consumer price instability. Washington and the Federal Reserve have colluded to create a succession of stock market crashes, an explosion of government debt, suppressed interest rates that have gravely injured savers and retirees, exploding household debt, loss of manufacturing jobs accompanied by trade deficits, and the finance of American interventionism abroad.
In my previous blog I outlined in ore detail these ramifications of bad money.
Read it here: The Overwhelming Problems that Donald and Congress Will not Solve
So – consider Ronald Reagan’s words from 1980.
– Will
P.S. A related prediction of coming events….
In mid December the Fed will once again consider raising interest rate. They will feel comfortable doing this because of a ” healthy and improving economy” as evidenced by a positive jobs and and unemployment report that we just saw this week. Raising the rate also enables the Fed to have more control as it gets them away from the lower bound of zero and thus enables them to react to future unemployment with added stimulus and reduced interest rates. Consequently. the Fed will likely raise the prime rate this month, but by a small and cautious amount, such as a quarter point (0.25%).
. . . . Being deep into Fiat la-la land, the reaction to such a move will be severe. Watch the stock market react to even a quarter point rise and throw a reactionary tantrum – falling significantly and quite possibly decisively (as it did the last time the Fed dared to pull away the cheap fiat money punch bowl in late 2015). This will likely fully undo the recent post election surge and more, likely much more.
. . . . Don’t think 2008 can re-occur? I hope you are right. But I sure wouldn’t plan on it. My advice: right now – only bet on the stock market going up at your own peril. Be in cash and other asset classes rather than equities.
