| | | I will make the case that inflation is already here, so far it was in assets like real estate and stocks, due to the unlimited QE, now you see it in commodities and it will not subside.
Facts: The US has been running budget deficits since 2002 non-stop and at an increasing rate. Last year alone, income was at $3,5 Trillion with expenses being $8 Trillion! What is more, you now have a "Corona" bill of $1.9 Trillion and an upcoming infrastructure bill, as if we are still in the 1960s and the US needs more roads. These are non-productive use of funds that will not yield something back. The debt accumulated must be already at $30 Trillion. And I do not see the trend changing:
bipartisanpolicy.org
Of equal importance is the US trade deficit here:
tradingeconomics.com
, which currently amounts to $70 Billion per month! Dollars are leaving the country to pay for imported goods.
At some point the creditors will demand a higher yield to keep buying more risky treasuries, but the Fed cannot raise rates much without bankrupting the federal government. The solution? Print more dollars, which will unavoidably lead to very high inflation.
There are very interesting times ahead, but with this thread I am sure we can thrive as investors. |
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