Who produces the world’s gold?
Gold production fell again in 2020. According to the World Gold Council, gold production came in at 3,478 tons last year. That compares with mine output of 3,597 tons in 2019.
President Biden has proposed a borrow and spend “to infinity and beyond” budget featuring $6 trillion in government spending. That’s the largest amount of spending ever proposed in a presidential budget. In the following podcast clip, Peter Schiff argues it’s not accurate to call it a “budget.” The federal government has given up on actual budgeting.
Federal Reserve Chairman Jerome Powell testified before Congress on Tuesday and continued to peddle the “transitory” inflation narrative.
Keeping with the dovish tone set after last week’s FOMC meeting, Powell reiterated that the central bank is not going to rush to raise interest rates, and he said the Fed would not hike rates merely in response to inflation worries.
Central bankers at the Federal Reserve are talking a lot about what’s going to happen in the future. But what do they really know about what lies ahead?
The fact is, they don’t know a whole lot. But we do know one thing for sure – the debt in the US isn’t going away. It’s only going to increase.
Peter Schiff talked about it in his podcast.
3 Key Takeaways
- The US Government has over $28 Trillion in Debt
- Much of the debt is short-term, making it extra sensitive to higher rates
- Higher Interest Rates would immediately start putting strain on the Federal Budget
Introduction
The US has over $28 Trillion dollars in debt and it continues to grow at an alarming rate. Even before COVID-19, the problem was becoming unwieldy. Ironically, despite adding $4T+ in debt over the last year, the pandemic may have given the US Government a short-term reprieve as it gave the Federal Reserve a green light to drop rates back to zero.
The US government continues to borrow money at a frenetic pace in order to cover its massive spending spree. It runs huge deficits month after month and there is more spending coming down the pike. The national debt is over $28 trillion and it is about to begin surging upward again. But with the exception of a few contrarians, most people don’t worry about the national debt. The conventional wisdom seems to be that since none of the doomsday predictions about skyrocketing debt haven’t come to pass, there’s nothing to worry about.
Of course, nothing is a problem until it is. And even if the borrowing and spending don’t ultimately precipitate a crisis, it is undermining the economy. The bottom line is more debt means less growth.
Is inflation “transitory,” the result of a quickly recovering post-pandemic economy as Jerome Powell insists? Or is it a long-term phenomenon resulting from loose monetary policy that’s not about to abate anytime soon? Peter Schiff recently participated in the “great inflation debate” on RT’s Cross Talk with Peter Lavelle, along with American Institute for Economic Research economist Pete Earle and Renaissance Capital economist Sofia Donets.
The markets reacted fiercely to last week’s Federal Reserve meeting even though the central bank didn’t do anything. Fed Chair Jerome Powell called it the “talking about talking about meeting.” But even as the so-called “dot-plot” indicated the Fed might raise interest rates for the first time in 2023 instead of 2024, the central bank held rates at zero and took no action to taper quantitative easing. The rhetoric might have changed, but the actual policy continued unabated.
The markets reacted to last week’s Federal Reserve meeting as if the central bank was about to embark on a major monetary policy tightening spree. But as Peter Schiff discussed in his podcast, the Fed is all talk. It can’t possibly do what the markets think it might do. In effect, the central bank is running a “no stick” monetary policy. The Fed talking but it’s not carrying any kind of stick to back it up.
A guy made a comment about my article highlighting Chipotle’s recent decision to raise menu prices in order to cover some of the cost of higher wages, pointing out that the CEO made some $38 million last year, noting “I doubt he needs it.”
The first thought that popped into my head was, ‘how exactly do you know what Brian Niccol needs?’ My second thought was, ‘what does that have to do with anything?’ And my third thought was ‘dude, you don’t have a clue how business works.’
