This article was written by Brandon Smith and originally published at Birch Gold Group
In recent economic news, headlines are being dominated by concerns over rising bond yields. Increased bond yields are a sign of a possible spike in inflation and, logically, they call for the Federal Reserve to raise interest rates in order to prevent that inflation.
Higher bond yields also mean there is a competitive alternative to stocks for investors – both factors that could trigger a plunge in the stock market.
If one studies the real history behind the stock market crash during the Great Depression, they will find that it was the Federal Reserve’s interest rate hikes that caused and prolonged the disaster after they had created an environment of cheap and easy money throughout the 1920s. Former Chairman Ben Bernanke openly admitted the Fed was responsible back in 2002 in a speech honoring Milton Friedman. He stated:
“In short, according to Friedman and Schwartz, because of institutional changes and misguided doctrines, the banking panics of the Great Contraction were much more severe and widespread than would have normally occurred during a downturn. Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”
This then raises the question – inflation or deflation? Will the Fed “do it again?”
Probably not in exactly the same way, but we will see elements of both inflation and deflation soon in the form of stagflation.
It’s a Catch-22 that the central bank has created, and many (including myself) believe that the Fed has created the conundrum deliberately. All central banks are tied together by the Bank for International Settlements (BIS) and the BIS is a globalist institution through and through. The globalist agenda seeks to trigger what they call the “Great Reset,” a complete reformation of the global economy and capitalism into a single one world socialist system… managed by the globalists themselves, of course.
In my view the Fed has always been a kind of institutional suicide bomber; its job is to self-destruct at the right moment and take the U.S. economy down with it, all in the name of spreading its cult-like globalist ideology.
The only unknown at this point is how they will go about their sabotage. Will the central bank continue to allow inflation to explode the cost of living in the U.S., or will they intervene with higher interest rates and allow stock markets to crash?
Either way, we face a serious economic crisis in the near future.
Increasing Inflation Means Economic Recovery?
Mainstream economists will often argue that rising yields and inflation are a “good thing.” They claim this is a sign of rapid economic recovery. I disagree.
If “inflation” was the same as “recovery,” then there would not have been total economic collapses in Argentina in 2002, in Yugoslavia in 1994, or in Weimar Germany in the early 1920s.
I do not see recovery. What I see is the rapid devaluation of the dollar’s buying power due to massive fiat printing through stimulus measures. The Fed and the U.S. government are buying a short-term surge in economic activity, but at a hidden cost. This is a condition that the Dollar Index does not even begin to address, but obvious in prices of necessary goods and commodities.
Keep in mind that all of this is being done in the name of responding to the pandemic. The pandemic is the ultimate excuse for the active destruction of the U.S. economy. Stimulus measures have devolved into helicopter money being thrown about haphazardly as billions are siphoned primarily by major corporations and through fraud. People who are clamoring for a $2,000 relief check from the government have no idea that corporate welfare has been ongoing for the past year along with billions in retroactive tax refunds. All of that money printing is going to cause damage somewhere. It cannot be avoided.
It’s Not About The Pandemic
Let’s make something clear first: The pandemic is NOT the reason for the stimulus flood. The pandemic did very little to hurt actual business in the U.S. Rather, it was the lockdowns that did most of the damage.
Think about that for a moment – federal and state governments crushed the economy through lockdowns, then offered the solution of vast stimulus measures. This in turn is destroying financial stability and generating rapid price inflation.
Conservative states and counties that refused to shut down are recovering at a much faster pace than leftist states which imposed draconian restrictions on citizens. Yet, the lockdowns did nothing to stop the spread of COVID-19 in blue states. So, the lockdowns accomplished no discernible advantage for the public, but they did give the central bank a perfect rationale to further erode the dollar.
This resulting price inflation is something that not even the red states can escape.
For example, home prices are rapidly expanding beyond the market bubble of 2006. This is partially due to millions of people participating in perhaps the largest migration in the U.S. since the Great Depression. Anyone who is able is moving away from major cities into suburban and rural areas. But, home prices also have a historic habit of inflating along with currency devaluation. The cost of maintaining and remodeling an older home, or building a new home, rises as the prices of commodities like lumber inflate.
And lumber prices are certainly inflating! Softwood lumber prices are up at least 110% from a year ago, and are climbing as much as 10% in a week.
Home rentals also do not escape inflation, as the rising cost of maintaining properties forces landlords to increase rents. The only places where rents are decreasing are major cities that Americans are seeking to flee, such as New York and San Francisco.
Inflation In More Than Just Housing
The majority of commodities continue to see price inflation across the board. Food and energy prices have been creeping higher for the past year. Governments are once again blaming the pandemic and “stresses on the supply chain,” which may have been a believable claim nine months ago, but not today. Anything to hide the fact that all that stimulus has inflationary consequences.
Dollar devaluation is the most visible in terms of imported goods. In other words, it costs more dollars to buy goods outside the U.S. as the value of the dollar falls. And since the majority of U.S. retail is supplied by foreign producers, this means that average American consumers will suffer the brunt of inflationary consequences. Public stress and anger will be high.
Pandemic Lockdowns Are Just An Excuse
This is why the COVID-19 lockdowns must continue and the pandemic fear factory must remain active. The globalists need a cover event for the Reset and they need to keep the citizenry under control, and the pandemic can be blamed for just about anything. I think this is why we are already seeing the media hyping the existence of “COVID mutations.” Do not be surprised if the Biden Administration tries to implement a national lockdown sometime this year in the name of stopping the spread of a “more deadly” COVID-19 variant.
It won’t matter that the previous lockdowns were useless and all the data shows that keeping the economy open is a superior policy. It might seem like logic is going completely out the window, but there is a very logical reason for what is happening in the minds of globalists.
Stagflation comes into play through losses in certain sectors of the economy, high unemployment and the inability of wages to keep up with costs.
There is the continued dismantling of the small business sector, which, again, I believe is being destroyed deliberately. It’s not a mistake that small businesses were predominantly targeted as “non-essential” during the lockdowns. It’s also not a coincidence that the majority of COVID-19 PPP loans went to big box corporations while small businesses received almost nothing. The small business sector is being erased, leaving only the corporate sector to provide for consumers.
This may be why Democrats are so adamant about raising the federal minimum wage to $15 an hour. Wages are already rising according to market demand and region. The average non-skilled worker in the U.S. is making around $11 an hour. There is no need for the government to interfere, unless they have ulterior motives.
A $15 minimum wage would likely crush what’s left of small businesses, and only corporations that are receiving the bulk of stimulus dollars will be able to afford to pay workers the higher rate. On top of that, years from now the government could claim they “took action” to front-run stagflation by increasing people’s pay. But a $15 minimum wage is most useful to the establishment in the short term because it muddies the waters on the inflation issue.
Prices will continue to rise due to dollar devaluation, but the media and government will say that it has nothing to do with the dollar and everything to do with companies raising shelf prices to offset increased labor costs.
The Biggest Threat In The History Of American Society
I suspect that the establishment will do everything in its power to distract the public from the biggest threat in the history of American society – the stagflationary time bomb.
If they admit to its existence then the public could prepare for it, and they don’t want that. If Americans were to decentralize their local economies, support local small businesses instead of big box retailers, start producing necessities for themselves, and if they started developing currency alternatives like local scrip backed by commodities… then they would be able to survive a national financial crisis.
In fact, I guarantee that any community, county or state that takes these steps will immediately be targeted by the federal government, further revealing the truth: The establishment wants the public to suffer.
They want economic disaster. They do not want people to have the option of taking care of themselves. They need people scared, desperate and malleable, or they will never achieve their Reset agenda.
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Does it seem like our culture is changing organically from the natural progression of ideas or does it seem that some evil external puppet master is leading the change to force acceptance of 2 + 2 = 5 so people can be owned and controlled? Something like 75% of the votes were for Trump, but the CCP had other ideas. Things are not what they seem to be.
“local scrip backed by commodities”
I’d like to read more about how to make that happen. It sounds great.
During the financial crisis a group of people in Summit county started an alternative currency based on barter/trade/labor and services . I was involved whereby I would provide my services, which is septic system maintenance, sewer and drain etc. As an example; I would service a local bagel shop and I earned an agreed upon amount of the alternative script, I could spend the amount earned at any of the participating businesses or individuals associated with the system created. This had very good potential, was exciting to be a part of and things like this will likely emerge again. It didn’t last at the time as things were “papered over” and the Great recovery took hold.
A system like this combined additionally with intrinsic commodities and with real money e.g. gold/silver seems to be the world’s typical solutions to the inevitable collapse of fiat empires. Might as well start organizing alternative financial infrastructure prior to the “great reset” .
Brandon I just realized on top of this article that red states are starting to open up 100% (Texas, Mississippi) and others. This sets the showdown when the Biden administration begins to say there is an “uptick” in cases/COVID mutations. We shall see how red states in general respond afterwards. I don’t think there is any turning back, the base is too strong and moderates are coming around. I think the fight is in our favor.
World annual silver production/mining is 800 Moz,.. if 10 milj people uses relief checks to buy physical silver, 100 oz each, that would be a “great reset” for the banking cartel manipulation.
Start using silver as money. Visit farmers markets, agoras, fleamarkets and buy your needs with silver. Become a vendor as well.. you dont need dollars.. barter instead.. and use silver.
Excellent comment, the yearly consumption is 1.2 billion ozs. The pool of value is 1/200th the size of the gold pool . It is a vital metal for life.it would be the Achilles heel of the whole financial system.
I’m in Miami and my wife is Cuban-Spanish. You should translate your articles to Spanish and reach more people. Some of the best revolutionaries are my neighbors and friends who have escaped Venezuela, Argentina and Cuba and would like to hear what you are saying.
Do you think the republican shift in Miami dade county in 2020 will be permanent?
Whoever wants to do a translation to Spanish is more than welcome to.
I can offer you my dutch translation skills.
No doubt. A Ryan Brooks A.V.C. la libertad website, perhaps?
That might be a positive and meaningful impact upon people.
And that … it’s a great idea!, latinos are the 2nd largest group in America, certainly coming from countries that experienced corruption, decit and lies on a grand scale, the esiest way to reach this group is translating great articles like this and others, for guys that “no habla” this is a huge untapped market, ( sorry for the expresion), most of us don’t trust authorities at face value.
You can also see http://www.globalresearch.ca on the desktop version, on top of the page there’s a translator for various languages.
My experience with the Latino population here in Colorado has always been a positive one. Hard working, strong families, tight communities, shit their more “American” than half the entitled “woke” liberal white-ies I deal with on a regular basis.
All we need is strong, smart organized Americans, who gives a shit what color you are!
True,most libs have never produced anything.a few exceptions. Look at BO pelosi briben waters on and on . They like to steal,mooch and parasite.
Stimulus bill just passed….setting the stage for hyper inflation
Easy money. Just take it, turn around and buy silver and gold. Thank you, Fed!
Local script, backed by local produce and/or service, will require support from local law enforcement to stave off Federal thugs. Sufficient law enforcement support will lead ultimately to a showdown with the Feds. I believe this is where we are heading.
Don’t forget about the community militia; they will also be defending the local trade.
Thinking about which of the two options are more likely..
A. YCC (yield curve control by Feds to knock down interest rates on the ten year): allows gold and silver to rise, draws out the process of inflation over a much longer time, allows everybody to continue to think everything is just fine cause the stock market is doing well, more of the frog in water slowly raising model.
B. No YCC: yields continue to rise, PM’s stay suppressed, stock market crashes, inflationary expectations go up sooner because of interest rate rise and create positive feedback loop of inflation increase.
Do you agree with these descriptions?
Do you think Option B is more likely because it’s got a faster time course towards collapse, since the pandemic hasn’t played out as it might have been expected?
YCC may not be possible under these circumstances, yields are rising despite what the Fed does because of the trillions in stimulus being created. I also think they need a faster crash with Biden in office, then they can place the blame on Trump. If they wait too long, then all the blame falls on Biden and the globalists by extension. Though, metals will not stay suppressed for very long. The physical market will simply decouple from the paper market. It has already happened once this past year.
I was listening to a podcast with Bill Holter and the moderator asked:
Q). Does it make sense to get a fixed rate loan to buy say a house and repay it with currency that’s worth less?
A). In theory yes, that’s what you do. The question is, if you go back to Weimar, Germany, what did they do? The rewrote all the mortgage loans and rewrote them in terms of gold. So what they did was they did not allow the banks to take the losses and they made the borrowers pay more than what they were required to under the original contract.
My question for you is do you see things for the United States going the way of Weimar, Germany?
They did the same thing in Yugoslavia as well; they adjusted existing debts to match inflation rates. The people that think they are going to pay off their debts for nothing using an inflated dollar are kidding themselves. The establishment will NEVER let you escape those debts legally. I see stagflation in the US, as opposed to standard hyperinflation, but the results would be very similar.
Here’s a great site for local currency models we should all try to create soon:
Chinese “experts” urging the WHO to let China build and run a “global database for vaccine passports” that could be ready-for-use until the Olympic Games in Tokyo later this year, according to the Communist state-newspaper Global Times.
Excellent analysis. My comments do not make it here. I hit post an it never goes. Keep the good work
You might want to switch web browsers and see if that helps.
First of all, I agree with everything you say. And predicted it in 8-2020, on the political side,everything that has happen with the democrats, and their virus. It was no accident(bat soup?) as to when it was released. Remember Fauci himself gave that Chinese lab, $7.4M of OUR money, in 2014, under the O’bummer regime.
Now recently release footage of Biden asking for the Chinese to help him become president. But, in 2013 it was ASSumed that Clinton was running.
You are correct, that the lock downs are the most detrimental part of the virus. Did not think of this at that time, but is this ‘plandemic’ a calculated strategy of the democrat party, to inflict long term harm to Americans? Remember, Sweden never shut down. I’m not sure about human behavior, never took a people course, only animal ones( i am a biologist).
If this planned detriment to our country was planned, then dems are incredibly calculating, not just thieves and murderers. Remember, it was the democrat controlled states that chose to shut down, causing the most isolation.
Two articles on the detriments of isolation(might have to copy and paste into browser):
Effect on short term memory:
Slight background research on isolation:
O have many sources for my research, ready to share.
You are right about the browser, I use Mozilla and Duck Duck Go to search.