Twenty More Years of Inflationary Hell

Post-pandemic inflation has created a combustible combination of demoralization and short fuses. [Gilder's Daily Prophecy] April 07, 2022 [UNSUBSCRIBE]( | [ARCHIVES]( Gilder: “The Internet Is Cracking.” [Click here to learn more]( As you know, “The Cryptocosm” will eventually replace the current architecture of the internet… …and trigger one of the greatest technology disruptions of our lifetime. That’s why George writes, [“The Internet Is Cracking”]( But here’s the thing… This epic disruption – and the [profit opportunity]( at hand -- may be coming to a head much faster than any of us expected… [Here’s why…]( Twenty More Years of Inflationary Hell [Jeffrey Tucker]Dear Daily Prophecy Reader, Before we get to our daily issue... There is something urgent I’m asking you to take a look at. One of my colleagues just made a rather interesting discovery regarding the future of “The Cryptocosm.” Specifically, he’s pinpointed a handful of [tiny investment speculations]( that are poised to ride alongside an exponential growth curve over the coming years. (According to his research, he’s projecting a 9,900% industry boom by 2026). George even recorded a short video clip explaining everything. [[You can watch it here.]( It’s not long. Maybe three minutes or so. I hope you take a moment and watch it at your earliest convenience. After you take a look, read on below… How is the money looking? Not good, it would appear. The Fed’s just-released minutes admits that we’ve gone from “transitory” to “accelerating” while even the central bank’s biggest doves have pivoted toward tightening. They are all doing their best to convey an air of confidence that it is possible to tame inflation while avoiding recession. But the likelihood is extremely low. No amount of tightening will be enough to calm down the inflationary fires at this point, and any serious attempt risks major problems. And the truth is that a half percentage point move in the federal funds rates is not serious. It’s cosmetic at this point. Since 2008, the Fed has experimented with a novel idea: drive interest rates to zero. You can observe just how unprecedented this is. When J.M. Keynes first called for the “euthanasia of the rentier class” in the 1930s, it was seen as dangerous socialistic. Then the Fed tried it out, all in the name of saving the financial system. [chart] The idea is just as experimental as “zero covid,” only less obviously coercive. The US got away with this for 14 years, more or less, which only tempted the monetary central planners to overestimate their own prowess. They pushed this whole model too far in 2020 and now they face the grim reality. In order to really fight inflation, the Fed would have to slam markets extremely hard, not with half a point but with a dramatic shift, which would certainly cause other forms of chaos in all markets. Meanwhile, during the long period of crazy, the Fed’s balance sheet holdings of assets went from $1T to $9T, half of which occurred since 2020. Where does the Fed get this kind of cash to accumulate this much stuff? Let’s put a fine point on it: the Fed’s checks don’t bounce. That’s the core of the problem. Now the Fed is talking about off-loading some or much of this, which will cause further pressure on all rates which are already responding with the expectation of tightening. The bottom line is that things could get really messy really quickly, even with only minor changes in policy. President Trump’s Secret In his final year of office, President Donald Trump did something that could transform America. And create trillions of dollars in new wealth for everyday Americans. [You won’t hear this anywhere else – get the full, uncensored story here.]( Public Anger All the polls show that inflation is very easily the #1 issue facing Americans. It is the one issue that does not divide people along political lines. That means that Washington must pay attention. Nor is it enough to tell people that the high prices of just about everything are totally worth it to defend the rights of the Ukrainian nation. Even for Americans who believe anything, that’s a bridge too far. It’s all the more infuriating that the news media is very obviously trying to calm public anger and fear, to an equal degree to which it attempted to stoke fear and panic for a virus. The virus however one cannot see. Prices on food one can see and feel. We can look back at history at many great turning points and find a monetary/inflationary environment at work. It’s true for the American, French, and Bolshevik revolutions, Weimar and the rise of totalitarianism, and countless upheavals in Latin America and Africa. People take the money for granted when it is more or less sound, but when it goes belly up, the regime loses credibility. And so too for Biden today. His partisans say he inherited the problem. Fine, he did, and then contributed nothing to fixing it and much to fueling it. There is plenty of blame to go around here. It just so happens that the hot potato is in the hands of the political party that controls the entire executive state plus Congress. That’s the kind of power you want, until things go wrong and you find yourself wishing it were someone else. Tucker Carlson believes that the D.C. establishment is ready to throw Biden overboard. And this is what accounts for the sad party scenes from the Beltway in which the US president can’t really find anyone to talk to. Yep, that’s extremely strange, but I cannot really see what the end game here could be. This guy has 2.5 years remaining in office. Kamala is not a viable replacement. The problem for the US establishment right now is actually more far reaching. Distrust is high and growing. The panic in the beltway to cover up and scapegoat for two years of disaster is roiling and boiling, as Republicans plot their strategies for a November takeover of Congress. Along with that comes the power of committees and investigations plus the subpoena power. We will see many retirements and other vanishings before that dreaded date. Even More Anger Have you been to an airport lately? Here you get a sense of the cacophony of American life today. You can see mask requirements that nearly everyone knows are ridiculous and stupid, plus preposterous signs demand that we all stand 6-feet apart, even as people are crushed together in lines and mobs everywhere. How can anyone take the “authorities” seriously under these conditions? Meanwhile, prices for food and drink are completely eye popping. And infuriating. This is a country of angry, cynical, exhausted people. It’s a combination of demoralization and short fuses. It’s utterly combustible. What most people do not understand is that there is nothing temporary about any of this. Sure, the preposterous masks will go away and eventually even the “social distancing” signs and stickers will be taken down. But we will still live amidst the carnage. Here is a paragraph buried in the WSJ yesterday: Veteran British finance official Charles Goodhart believes that this debate is missing a larger reality. As the pandemic raged in the spring of 2020, he predicted that inflation would rise to between 5% and 10% in 2021—and then remain higher than in recent decades. “The coronavirus pandemic will mark the dividing line between the deflationary forces of the last 30 to 40 years and the resurgent inflation of the next two decades,” he said in an interview with the Journal. He cites a momentous demographic shift from the labor surplus of the past generation to the labor shortage we will face as populations age and the population share of working-age people declines in the West and in China. Workers will push for and receive higher wages, which will drive up prices. Did he say next twenty years? Absolutely. Perhaps this helps account for the record attendance at the Miami Bitcoin Conference this week. Those crypto heads are among the few who feel a sense of vindication for their judgements over the last several years. Meanwhile, I need to close this letter, as I’m about to board a plane, and the loudspeakers are still screaming at me “The CDC recommends social distancing to stop the spread of germs.” There truly is no reason to wonder why incredulity is the dominant cultural trait of the whole of the US today. Regards, [Jeffrey Tucker] Jeffrey Tucker P.S. If you have questions or comments about this e-letter or our services, please email us at askgeorge@threefounderspublishing.com. New “WiFi Crypto” Token is Going NUTS! Only a handful of crypto investors know about this… But there’s a tiny, affordable device… That’s paid investors real crypto – every day, with zero work… Just for having a working WiFi connection! It sounds crazy, but it’s true… And [this 3:28 video]( explains everything. [Click here to view it NOW](. [Three founders Publishing]( To end your Gilder's Daily Prophecy e-mail subscription and associated external offers sent from Gilder's Daily Prophecy, feel free to [click here](. 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