“Our income is falling even as the thieves who took away our prosperity continue to masquerade as people we can trust to solve the problems that they created,” Jeffrey Tucker observes soberly about America’s economic and monetary situation.
Tucker, Brownstone Institute founder and president, wrote an op-ed that was published Friday in The Epoch Times. He noted that the inflation problem continues and the dollar is likely to lose half its value by the 2030s. Basically, Biden’s economic policies and the Federal Reserve created a crisis, and it’s not getting any better.
“The Consumer Price Index came out this morning and it showed no improvement over last month,” Tucker wrote. “It is still rocking at 3.2 percent with new strength in food and medicine. The sticky index is frustratingly high too at 5.4 percent.”
As we face the 31st month of “transitory” inflation, we’ve also have almost that long a period in the Federal Reserve’s “war on inflation by raising rates higher and faster than in the whole history of the institution,” Tucker continued. “That said, in real terms, federal funds rates are still barely above zero. That’s because inflation is still rocking and eating away the dollar’s purchasing power.”
The purchasing power of the U.S. dollar is declining at a somewhat less rapid rate than it was as of a year ago, Tucker noted. But the dollar is still declining, not hitting the Fed’s target. “Prices are nowhere near going back to 2019 levels but instead it all keeps getting worse,” he wrote. “We have now lost 16 cents from its value at the start of Trump’s last year of his presidency. The mad money printing has taken a terrible toll. All of the value of the transfer payments from 2020 and 2021 have completely vanished.”
According to Tucker, “the Fed has done everything it knows to do in order to bring this under control,” although the Fed also created the problem to begin with by “enabling” a Congressionally-authorized spending spree. And the “clean-up” after the “fire” didn’t go particularly well; we all know that from our own experience. Tucker gave a technical explanation of velocity, or “a measure of the pace at which money is spent,” and how the pace of spending now is fueling inflation and is not likely to improve soon. But velocity isn’t under the Fed’s control, either.
Tucker insisted, “If velocity continues to increase like this, we are looking at years of price increases at 3 percent and higher. And that is presuming no sudden surprises.” Unfortunately, he noted, Americans seem to be getting used to the inflation pain. It hurts, but we’re starting to accept it as normal. That’s how “transitory inflation” turns into a permanent state of affairs, Tucker stated:
At the current pace of decline, we can expect the 2020 dollar to keep falling in value, so that it will be worth half its value by the time we reach the 2030s. Keep in mind that this is a tax that wrecks the standard of living of the middle class and the poor while enriching the people and institutions that can afford to endure the storm…
This is exactly what has happened to gas prices. In the long sweep, it has only increased in price but right now it feels not so bad. This is entirely in your head. The reality is that you are being pillaged.
Gas prices could eventually reach their old highs but by this time, you will have been so bruised and bloodied that you will be no longer screaming in pain. In short, our masters are trying to acculturate us to suffering so that we will no longer have the strength to protest.
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One thing Tucker does not address is how the dollar is weakening internationally even as the Chinese yuan rises, and multiple countries start to turn from the U.S. dollar as standard world reserve currency. Could that “de-dollarization” pushed by Communist China also spell serious trouble for the future value of the dollar? Probably.
Ultimately, however, the conclusion is the same: it’s ordinary Americans who suffer most from inflation and the dollar’s loss of value.
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