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(Mises)—Global liquidity is expanding. In the past three months, the global money supply has soared by $4.7 trillion. This rapid increase started when the Federal Reserve panicked the first time and delayed the normalization of the balance sheet in June.
Since then, we have seen a chain of fresh stimulus policies implemented by developed economies, adding to the large fiscal packages already in place. Multi-trillion-dollar investment packages like the EU Next Generation Fund now include massive deficit spending plans. However, money velocity is not rising. All these programs only lead to secular stagnation. Government projects and current expenditures are consuming money at an unprecedented rate.
Developed economies cannot live without new and larger spending plans. The result is more debt, weaker productivity growth, and declining real wages.
In a recent report, Bank of America showed that the rise of unproductive debt has created a significant problem for the United States economy. For every dollar of new government debt, the gross domestic product impact has slumped to less than fifty cents. The United States is drowning in unproductive debt. However, at least the United States has some productivity growth. If we look at the euro area, the negative multiplier effect of new government debt is extremely evident. Despite enormous stimulus plans and negative nominal rates, the euro area has been stagnating for years.
Many of you may believe that bad policies and careless government spending are to blame, but I think this is intentional. It is a slow process of nationalizing the economy. Slowly depleting the middle class’s savings due to consistently declining real wages, the government expands its influence in the economy, garnering support from a substantial portion of the populace.
Market participants love this. A new stimulus plan means more money printing, which will bring more liquidity to markets and fuel multiple expansions regardless of weak economic figures. However, my esteemed colleagues should be wiser when hailing the next stage of financial repression. Discontent is rising among citizens, and one way or another, this will end badly.
Debt crises may not appear the same way as they used to. It is not a cataclysmic event but a slow boiling that leads to the same impoverishment.
Neo-Keynesians look at the past four years of the United States economy and claim victory. However, for many in the United States middle class, their impoverishment over the past four years has been like that of Greek citizens in 2009.
When central banks think of a soft landing, they are looking at a gradual erosion of the purchasing power of salaries and deposits. This is precisely what we are experiencing, compounded by the additional burden of higher taxes. There is no such thing as a soft landing. Only government bureaucrats and those who can conceal their wealth from money destruction can benefit from a soft landing.
This new increase in money supply may not bring a fresh burst of inflation because money velocity is not rising as well. However, that means lower investment, lower growth, and lower productivity. Market prices, multiple expansions, and bubbles may appear again, while families and small businesses find themselves in a tougher spot.
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The back-to-back chain of stimulus plans shows the failure of Keynesian policies. We used to witness the introduction of a new spending and rate-cutting program a few years after the previous one. Now, governments simply add new programs on top of each other and claim that the economy is about to turn the corner.
Government spending consumes the majority of newly created money, leaving the productive economy with decreasing access to credit, declining currency purchasing power, and wealth confiscation through taxes and currency printing.
According to the most recent OECD report, inflation will be 3.5% with a global growth rate of 3.3% in 2025. The introduction of massive new spending and financial repression programs has resulted in 80% of OECD countries experiencing annual inflation that exceeds their central banks’ target. There is a global policy of absorbing productive and private sector wealth. A few years ago, someone dared to say, “You will not have anything, but you will be happy,” and most people understood the dangers of that promise. Nowadays, no one says it anymore. They’re just implementing it slowly. You will be poorer. Protect yourself from inflation and financial repression, or you will be a dependent subclass.
Jack Smith’s 165-Page Motion Arguing Against Presidential Immunity in Trump J6 Case Unsealed
by The Post Millennial
District Judge Tanya Chutkan unsealed on Wednesday a 165-page filing from Biden-Harris administration special counsel Jack Smith regarding upcoming presidential immunity proceedings in the January 6 case against Trump. Smith argued that Trump did not have presidential immunity for the crimes the DOJ alleges Trump committed, as “his scheme was…
Dr. Robert Malone Sounds Alarm on Self-Replicating RNA Vaccines: ‘Japan is the World’s Guinea Pig’
by RAIR Foundation
At the “Rescue the Republic” rally in Washington, D.C., Dr. Robert Malone delivered a sobering message about a new medical development that he reports could have dangerous consequences for global health freedom. Just returning from Tokyo, Dr. Malone warned of the imminent deployment of self-replicating RNA vaccines in Japan. These…
Launching the RIGHT REPORT to Fight the Real Enemies
by Publius
According to Ecclesiastes 10:2, A wise man’s heart inclines him to the right, but a fool’s heart to the left. The implications are stunning when we consider society today. That may not be the original intent of the verse but it clearly applies to the modern world. But what is…
Do You Want Your Prepper Bar Shipped to Your Home or Added to Your IRA?
by Sponsored Post
The massive shift of money being exchanged for physical precious metals started in 2022 with Central Banks across the globe breaking records. The frenzy caught on with large investment firms and financial institutions like BlackRock and JPMorgan in 2023. 2024 has been the year of regular citizens making the same…
No, Endorsing Kamala Harris for President Isn’t What Jesus Would Do
by The Federalist
Christians should reject the backward theology of teachers who twist the character of Christ to punish their political enemies. “Never Trump. This time Harris. Always Jesus.” These were the words not of Taylor Swift or Pete Buttigieg but of Ray Ortlund, a card-carrying member of “Big Eva,” in a recent…
The New Data on Illegal Alien Crime Is Shocking
by John R Lott Jr
(RealClearWire)—The new data on all the criminal noncitizens coming into the U.S. is shocking. The U.S. Immigration and Customs Enforcement (ICE) checks the background of illegal aliens they have in custody. But, the administration’s letter to Rep. Tony Gonzales (R-TX) shows that as of July 21, 2024, ICE let 435,719…
Antony Blinken’s Op-Ed Got Obliterated in Real-Time
by Townhall
For some reason, Joe Biden has been seen as a foreign policy guru, despite everyone thinking he was a clown. Former Defense Secretary Robert Gates was apt in his observation, noting that Biden has been wrong on every major foreign policy initiative over the past 40 years. He’s been rolled…
4% of Haiti’s Entire Population Has Entered U.S. Under Biden-Harris – And That’s Not All
by Woke Spy
President Joe Biden and Vice President Kamala Harris have been importing an astonishing number of third-world Haitians into the country. That’s right. The administration has been actively arranging and paying for Haitian “migrants” to fly into the U.S. More on this below, but first, we need to prepare the ground….
Meat Substitutes Still a Tiny Sliver of Us Meat Market
by Zero Hedge
Over the past few years, plant-based meat substitutes have come closer and closer to mimicking the real thing, with brands like Beyond Meat having even sussed out how to create fake meat that “bleeds”. But, as Statista’s Anna Fleck details below, after an initial boom, the company has rapidly come…
Box Office Bomb: Netflix Cancellations Explode After Co-Founder Gives Huge Donation to Kamala
by Red State
I admit it, I like Netflix. During the pandemic, when our Overlords here in California demanded we stay in our living rooms for two years, I watched countless terrible movies as well as some quality entertainment—it’s always hit or miss with the streamer. But I may soon vote with my…