The Debt Fueled Economic Apocalypse People Have Been Predicting for Decades May Be Just Starting
People have been talking about the potential consequences of our nation’s irresponsible accumulation of debt for almost as long as I’ve been alive. Every person reading this has heard some variation of, “If we keep borrowing all this money, people will lose faith in the dollar, quit buying our bonds, and it’ll cause us to go bankrupt!” Then, someone usually chimes in with, “HA! America can’t go bankrupt because we can always print our own money!” Next, the response to that is something like, “Yes, we can print our own money, but it’ll lead to hyperinflation like Weimar, Germany and you’ll need a wheelbarrow full of cash to buy a loaf of bread! You can say that isn’t bankruptcy, but it sounds like it to me!” On and on it goes… and it makes perfect sense, right? We all understand on a very fundamental level that we can’t keep borrowing ever-increasing amounts of money or at some point, we won’t be able to pay it back and everything will fall apart.
The problem is that human beings as a general rule and politicians, in particular, tend to be highly focused on getting pleasure and avoiding pain in the short term while ignoring that there will potentially be severe consequences for our actions later. This is how people get in debt, get hooked on drugs, drink and drive, and do a thousand other dumb things that we human beings do. It really is human nature for people to put all of that out of their minds until something horrible happens and we get shocked back into reality. Someone quits smoking right after they get a lung cancer diagnosis or drops 50 pounds to get a “revenge body” after their husband leaves them. Didn’t they know there was a problem before? Of course, they did, but until they actually burned their hand on the hot stove, it didn’t truly sink in. Americans have never had that kind of experience when it comes to government spending.
Sure, on an intellectual level they may understand that every taxpayer owes almost a quarter of a million dollars in debt, but isn’t the government still able to print and borrow as much money as it needs? Aren’t there politicians suggesting insanely expensive new programs all the time? Sure, the politicians in DC are jackasses, but someone there knows what they’re doing, right? They wouldn’t let us get in way over our heads, would they?
What people forget is that politicians, especially the sort of soulless narcissists and sociopaths who tend to succeed in DC, operate just like every other human being. They tell people whatever they want to hear to get reelected today and figure that by the time things get really bad, it’ll be someone else’s problem. Granted, they may hope that the big economic nightmare scenarios are way down the line, but they’re just as much in the dark as the rest of us about when the bill is ultimately going to come due for America’s financial idiocy.
Wholesale Inflation Rises More Than Expected
Wholesale prices rose more than expected in September despite Federal Reserve efforts to control inflation, according to a report Wednesday from the Bureau of Labor Statistics.
The producer price index, a measure of prices that U.S. businesses get for the goods and services they produce, increased 0.4% for the month, compared with the Dow Jones estimate for a 0.2% gain. On a 12-month basis, PPI rose 8.5%, which was a slight deceleration from the 8.7% in August.
Excluding food, energy and trade services, the index increased 0.4% for the month and 5.6% from a year ago, the latter matching the August increase.
Food prices helped boost the increase in goods inflation, with a 1.2% monthly increase. Energy rose 0.7% after posting massive gains the previous two months.
JPMorgan Chief: Inflation, QE, Could Bring Down Economy
BREAKING: JPMorgan Chase CEO Jamie Dimon tells CNBC that the U.S. is likely going to tip into a recession in the next 6 to 9 months t.co/2xMnmlj1ZD pic.twitter.com/JvFgWmnXd6
— CNBC Now (@CNBCnow) October 10, 2022
U.S. MORTGAGE Interest Rates to Highest Level since 2006
(Reuters) – The average interest rate on the most popular U.S. home loan rose to its highest level since 2006 as the housing sector continued to bear the brunt of tightening financial conditions, data from the Mortgage Bankers Association (MBA) showed on Wednesday.
Mortgage rates have more than doubled since the beginning of the year as the Federal Reserve pursues an aggressive path of interest rate hikes to bring down stubbornly high inflation.
Ray Dalio: US Faces ‘Perfect Storm’ of Problems, Fed Hikes Will Hurt