There is No Inflation - What? - So Says Powell at the Fed

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Powell says there is no inflation. I guess he hasn't tried buying real estate recently. Just for the record, the Fed changes what is in the Inflation Index whenever it suits their needs. There is nothing so dishonest as changing definitions on people without telling them you are doing that.

If anyone here thinks real estate is cheaper today than it was a few years ago, have a nice glass of wine, relax and get a grip.

Why does this blatant dishonesty matter? 

1. Because the Fed can't print more money if the inflation rate or if interest rates get too high. 

2. Without more printed money, people don't get stimulus checks, and the political elite can't reward their high dollar donors with very large contracts.

3. When people don't get stimulus checks they have to go back to work to eat and that causes discomfort. People who are in discomfort are not easily controlled by the government and they riot for food. Take your pick.

4. So, the inflation is passed on to the real estate, gold, silver and asset sectors. Which personally I have benefited big time from. 

5. But it causes a huge gap between the "haves" (those who are asset based), and the "have nots" those who try to save in 401k's, IRA's and other cash based "investments" like the stock market. I know, I know, the market will always go up, until it doesn't.

6. The Dodd-Frank law allows the government to take your money in a "bail in" if it is in savings, a 401k, IRA or any electronic transferable condition. Take Greece for example, they closed the banks on a Friday, did a "bail in" on people's accounts over the weekend and people lost a LOT of money over the weekend. A "bail in" is used to pay off Government debt. Remember that stimulus check you got? It's borrowed money and it has to be paid off. No free lunch here.

7. To keep that from happening to you, it's best to store your wealth in assets. Sell the assets to buy other things when you need to. 

8. "Bail Ins" happen quickly and without warning. 

So, maybe according to Powell there is "no inflation" (except in hard assets) but there are other, more obscure things at play. And it isn't good for your pocket book. 

Oh, and there is no medically provable benefit to closing down the economy. Look at Florida.

[Jim K.]

@Account Closed

Good for you. I don't like Greek walnut baklava much, because the Turks and the Lebanese make it better than we do with pistachios. OK, you're really talking about Cyprus. I have no real clue how Cyprus handled its mess.

In any case, a much better example of the possible outcomes to all the "stimulusing" is what happened with small gold holdings in the USA during the Depression, as well as what is happening to us, the gym owners, the restaurant owners, and the bar owners right now with the COVID moratoriums against eviction and mandatory closings. The gubmint has massive power and they can impose it on us, and we will always be shocked and dismayed when the state reveals it is essentially a repressive institution and doesn't really give a damn about anything other than maintaining its power over us.

Sooner or later, the free money giveaways are going to going to screw us but good, no matter how much the gubmint try to hide away the real inflation happening.

I'll tell my story on the podcast, but do you know what it's like to arrange with your cousin in Athens for her to fly to Rome to pick up Western Union money and fly back so your aunt can buy groceries and not eat at a church soup kitchen? You know what it's like to be on the other end of that call from your aunt when she gets the money? Every Greek family in the USA was having war councils in 2015, trying to figure out who could mortgage what so we could keep our people going back in the old country.

It was that experience that made me give up on teaching and go whole hog into real estate. The next time the wolf comes howling to the door for the blood of my family in an economic conflict, I'm gonna be behind that door with a money howitzer.