The Government “Plan” to Fight Inflation

Orwell Would Be Proud Were you forwarded this email? [Sign-up to The Daily Reckoning here.]( [Unsubscribe]( [Daily Reckoning] The Government “Plan” to Fight Inflation - The government plan to stop inflation by spending $750 billion… - “The current plan seems to be to wreck as much as possible before they are all swept out of office”… - Then Jeffrey Tucker shows you how the government and its central bank have instilled in people a fear of risk… Recommended Link [URGENT: Drug Stock Could End Arthritis?]( [Read more here...]( Will This Company’s Breakthrough Give New Hope To Millions? If You Or Somebody You Know Suffers From Arthritis, Pay Close Attention [Click Here For The Urgent Details]( West Hartford, Connecticut July 29, 2022 Editor’s note: Do you think the government can end inflation by spending even more money? Well, Congress seems to. Today, Jeffrey Tucker exposes one of Congress’ “greatest scams” to date. [Jeffrey Tucker]Dear Reader, If you have been on vacation for the last week, good for you. But you missed one of Congress’ greatest scams. They just approved some $750 billion (do these numbers even mean anything anymore?) to “transition” us from fossil fuels and coal over to reliance on the wind and sun, and also to subsidize a bunch of chip manufacturers because American companies screwed up their inventory control two years ago. Get this. The worst of the two bills is called the Inflation Reduction Act. Shameless! Actually, it is worse than that. What Congress is doing today with its out-of-control trillions in spending is robbing future generations of a chance for prosperity. We will be left holding almost nothing to hand on to our kids and grandkids. Most of all, what’s being stolen is hope for the future. The last two days have been consumed with a discussion about whether we are in a recession or not. They want to change the conventional definition, just as I predicted. The only piece of data to which they can point is the low unemployment rate while failing to point out that labor participation itself has not recovered from 2020 and continues to fall dramatically. It appears as if we’ve lost 40 years of progress in a mere 2½ years. Also this week, the Fed raised rates again, all in the name of controlling inflation. But the damage to the dollar is already done: Since lockdowns, we’ve lost some 14% of domestic purchasing power. This has been devastating for savings, the rate of which has fallen to half what it was 10 years ago. In real terms, wages and salaries are falling fast. Fed policy has also locked up the consumer end of the housing market. People only a year ago were flipping houses like crazy, driving up prices as never before and absorbing vast amounts of upside inflationary potential. But now 2% rates on 30-year mortgages are soaring to 6% and higher, meaning that no existing owner can afford to sell and buy without taking a huge haircut. As a result, we are facing a massive supply-curve shift to the left: soaring prices plus falling demand. But that’s just the start of it. Credit card debt and defaults are up as real incomes are falling dramatically. Business investment is down. Consumer confidence has crashed to lows never before seen, even as trust in government will soon be in the single digits. Very crucially: The last time the Fed squeezed the life out of easy-money policies in the late 1970s, we also had a new emphasis on economic growth. That is NOT happening now. On the contrary, the Fed is driving the recession at a time when the ruling class has decided that the rest of us SHOULD be poor and hungry, driving Flintstones cars and foraging for food. The result, for now, is shocking stagflation. But we don’t even have a word yet for what might be coming. “Depression” is already used. How do you describe high inflation plus a manufactured depression? Let’s go with the White House term: “transition.” The New York Times assures us that this massive spending bill will help the government achieve its great climate goals. After all, they say, the average temperature has risen by 2 degrees Fahrenheit over the last 100 years, which, they further assure us, is the fault of industrial prosperity. To be sure, the average person only lived 30–40 years in 1800. During the same century that these people claim we’ve been burning up the planet, our average lives lengthened from 40 to 75 years. Even granting the sketchy claim that your day trip and barbecue grill are causing the planet to overheat, one might suppose that life extension would be celebrated as a good thing rather than a climate catastrophe that cries out for the wholesale dismantling of industrial civilization. But truly, there is no making sense of these people anymore. They are ready to shell out hundreds of billions to take over arable acreage with solar panels even as we face a food crisis and festoon the countryside with bird-slaughtering windmills rather than permit more pipelines and refineries to open. The emergency of our times is undeniable as is the solution of putting a hard stop on the insanity of government spending, money printing, controls and impositions that are killing economic growth and shortening life spans. But it is no longer clear whether the current regime has a connection to reality at all. The current plan seems to be to wreck as much as possible before they are all swept out of office. And it’s looking very successful. Below, I show you how governments and central banks are trying to stop reality by resorting to means that have never once worked in the past — and the damage it’s doing. Read on. Regards, Jeffrey Tucker for The Daily Reckoning Editor’s note: Yesterday’s economic data showing that the economy is already in a recession came as no surprise to Jim Rickards. He’s been warning that we’re already in a recession. This has serious implications for your money. So Jim and his team [just released an urgent, actionable message]( fresh off the presses, that gives you a critical update. We strongly recommend that you take a look in light of the latest economic data. [Go here now for the critical details.]( Recommended Link [Biden to Replace US Dollar?]( [Read more here...]( Thanks to President Biden’s Executive Order 14067, a former advisor to the CIA and Pentagon predicts the 3rd Great Dollar Quake has begun. The first was Roosevelt confiscating private gold in 1934. The second was Nixon abandoning the gold standard in 1971. Now, Biden’s plan could pave the way for “retiring” the US dollar. Your dollars could soon be confiscated – or made worthless. See how to save your investment and retirement accounts. [Click Here Now]( The Daily Reckoning Presents: “A life without what we call ‘failure’ is a life without adventure, even without meaning at all”… ****************************** The Dangers of a Risk-Free Life By Jeffrey Tucker [Jeffrey Tucker]Every major investment banking house has sent out communications to its clients to provide a real-time assessment of why so many people have lost so much money. These are interesting to read. They are perhaps more truthful than one would expect, in fact. The latest is from Goldman Sachs. It fascinates me how the economists there do their economics. They work not from theory, not from fundamentals, but purely from probabilities based on history. Based on this, Goldman has discerned a 30% probability of a near-term recession. That seems low, but at least they are admitting the incredibly obvious point that the whole economy is slipping into the territory of doomed. If you believe yesterday’s negative Q2 GDP figure, we’re already in a recession. Where to Invest Your Money And Goldman adds reasonable speculation that the money in the next few years will be made in energy, food and commodities: generally, the stuff the people need to live. Think about what people have to consume and there’s your answer to what one of the world’s largest investment banking firms thinks will be the highest-performing assets. But the whole topic also gives rise to a different issue. It concerns the efforts on the parts of governments and central banks to stop the inevitable by resorting to means that have never once worked in the past. Governments don’t work based on probability theory; they work based on keeping danger to themselves at bay. No way will they just let the recession unfold naturally, shake it off and move on. Instead, they will sling around every conceivable policy “fix” from their grab bag to stop it, same as with the virus they could not control but tried to control anyway. And over the last decades, this general ethos of safety first seems to have become the entire prevailing philosophy of the West, afflicting generations of people under 40 years old. Never Take a Risk The whole subject occurred to me when reflecting on this new policy ethos and how pervasive it is in the culture. It is likely a product of prosperity. Probably one-third of the public has been raised without the usual risks and stresses that defined life in previous generations. The trouble is that this is not real. The illusion of a risk-free and still happy life is a myth, created by adults who want to make the best possible world for children. The trouble starts as this same ethos continues to shape parental habits as children get older. Then the birthday parties start. You know this if you have kids: Classic competitive games are practically banned now. No more musical chairs. No more pin the tail on the donkey. Everyone has to be a winner all the time. It’s true even in sports for kids. Everyone has a chance. No strikeouts allowed. No one is better or worse than anyone else. And don’t get me started on the participation trophies! It Doesn’t End There It continues throughout education, in which now the curriculum is adapted to the students rather than the reverse. This is because trying and achieving have been deemed too stressful and impactful on delicate young psyches. The issue continues through college, which has turned into a four-year vacation from reality, paid by someone else’s credit card. Then they hit the workplace and bring the same now-deeply embedded fear of discomfort, complaining to HR about every not-safe thing that happens. Recommended Link [Trump’s Final Gift To America]( [Read more here...]( There’s a little-known way Trump could – one day – have his revenge. It involves a Federal Ruling he oversaw in the final year of his Presidency that could change America forever… unleash an estimated $15.1 trillion in new wealth… and create countless ways for everyday Americans to benefit. What is this little understood decision? And how will it impact you? All the important facts are here. [Go Here Now]( And then the same people bring this attitude to politics, voting only for candidates that promise to continue giving the same safety priority to everything, from climate to disease to economics. This ethos creates safety and assuredness, to be sure, but also boredom and dependency. It also instills an allergy to all risks. That is not friendly to capitalism. In fact, it leans people toward socialism. Ironically, the impulse toward socialism comes not from the working class and poor but from the privileged and rich. They are the ones seeking the safety of despotism over the riskiness of freedom. How to Fix This The trouble is profound and pervasive, which we discovered during the pandemic when the most masked and afraid were 20-somethings who hail from financial privilege and for whom the stress of the traffic of driving to work was the most intense they had ever faced. So staying home and staying safe worked just fine for them. This is a deep philosophical problem that afflicts the West today, that longing for a world of maximum comfort, high income and as little work as possible. Lockdowns were a perfect world for them. How to fix this? Well, the problem might fix itself in time. The truth is that the real world cannot be forever made safe. To live means to accept danger to some degree. And we are likely to be surrounded by it very soon, as all the systems designed to promote infinite prosperity with no work or sacrifice are all failing. Inflation is a virus that is eating paychecks and has a whole generation panicked about the future. Rightly so. Parenting If you are a parent of young children, I have a suggestion. Put them to work. Help them experience discomfort and difficulty early on. As they get older, resist the temptation to coddle them forever. Let them fail. Consider even the most difficult thing of all: a straight-up financial cutoff. No more co-signed notes. No more paying the cellphone bill. No more endless access to the family funds. Yes, this can create loathing but it is short-term. They will thank you in the end. The systems of safety built up over decades will not protect people for much longer. We are headed to a world that restores the natural order of things, one in which those who dare gain the reward. And those who do that must also experience failure too, and all the pain that comes with that. In Praise of Failure There should be another word besides “failure” to describe what I’m talking about. When business doesn’t go as one hoped, when plans don’t turn out, when you have to take lumps and learn to adapt to new realities, that is just part of life. A life without what we call “failure” is a life without adventure, even without meaning at all. That’s what so many have tried to manufacture, but now we see how this vision is running against the brick wall of reality. The reality is hitting oddly quickly, with something most living people have never experienced: both inflation and recession. Staying ahead of this vise grip is not easy. No system we can construct can provide perfect protection. It will be this generation’s crucible. Maybe it ends with the realization that there are just some forces at work in the world that not government nor central banks nor parents can control. Not even Goldman Sachs. Regards, Jeffrey Tucker for The Daily Reckoning Ed. note: Yesterday’s economic data showing that the economy is already in a recession came as no surprise to Jim Rickards. He’s been warning that we’re already in a recession. This has serious implications for your money. So Jim and his team [just released an urgent, actionable message]( fresh off the presses, that gives you a critical update. We strongly recommend that you take a look in light of the latest economic data. [Go here now for the critical details.]( --------------------------------------------------------------- Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Jeffrey Tucker]( is an independent editorial consultant who served as Editorial Director for the American Institute for Economic Research. He is the author of many thousands of articles in the scholarly and popular press and eight books in 5 languages, most recently Liberty or Lockdown. He speaks widely on topics of economics, technology, social philosophy, and culture. Add feedback@dailyreckoning.com to your address book: [Whitelist us]( Additional Articles & Commentary: [Daily Reckoning Website]( Join the conversation! Follow us on social media: [Facebook]( [LinkedIn]( [Twitter]( [RSS Feed]( [YouTube]( The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. To end your Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [unsubscribe here.]( Please read our [Privacy Statement](. For any further comments or concerns please email us at feedback@dailyreckoning.com. 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