By Michael Snyder – Originally published over at TheEconomicCollapseBlog.com, republished here with permission
If you are enjoying the ride on the highway to hyperinflation, then you are going to absolutely love Joe Biden’s new budget. Instead of realizing the mistakes that he has made and reversing course, Biden has decided that now is the time to push the accelerator to the floor. That means that a lot more inflation is on the way, and I am encouraging all of my readers to do what they can to get prepared for that. In my latest book, I sound the alarm about what hyperinflation will eventually do to our economy. We are literally in the process of becoming Venezuela, and most Americans have absolutely no idea how horrific that will be. In Venezuela today, almost everyone is a millionaire, but just about everyone is also living in poverty because the money is absolutely worthless. We don’t want to end up like that, but that is the road that we are on.
While he was still in the White House, President Trump’s proposed budget for 2021 was $4.8 trillion. That is an extremely high number, but Joe Biden’s new budget for 2021 is actually 25 percent larger…
The proposal represents a 25 percent increase over what former President Donald Trump proposed in his final budget – in a year that would be upended by the coronavirus.
The spending levels would continue on an upward trajectory, hitting $8.2 trillion at the end of a decade, according to detailed top-line numbers leaked to the New York Times.
I could sit here all day and still probably not be able to come up with sufficient words to describe how insane it would be for the U.S. government to spend 6 trillion dollars in a single year.
According to Biden, his new tax increases will offset part of the new spending, but even his own projections show us running trillion dollar deficits long into the future…
The budget would have the nation continue running deficits of more than $1 trillion, a level it already topped with the onset of the pandemic – with estimated annual deficits of $1.3 trillion amid enacted and proposed federal programs.
Of course these sorts of projections are usually way too optimistic.
In my estimation, Biden’s plan would have us facing deficits of at least two trillion dollars per year throughout his presidency and beyond.
We can’t keep doing this to our children and our grandchildren. Already, borrowing and spending giant mountains of money that we do not have has resulted in the worst stretch of inflation since the Jimmy Carter years of the 1970s.
Larry Summers was the former director of the National Economic Council under Barack Obama, and even he is warning that big time inflation is coming…
He told a CoinDesk conference: ‘We’re taking very substantial risks on the inflation side.
‘I think policy is rather overdoing it. The sense of serenity and complacency being projected by the economic policymakers, that this is all something that can easily be managed, is misplaced,’ he added.
When even Larry Summers is sounding the alarm, you know that it must be really late in the game.
As I have detailed in numerous recent articles, prices are absolutely exploding all over the nation right now. And today we learned that one prominent analyst is claiming that “US inflation data surprises are at their highest in the 20-year history of the series”…
As we noted over the weekend, positive US data surprises seem to be normalizing (i.e. the Citi US econ surprise index has flatlined) due to a combination of analysts catching up with the prior stronger pace of growth, and also due to some evidence that the rate of change of US growth is peaking out (JPMorgan disagrees).
However as DB’s equity strategist Parag Thatte points out in his latest positioning piece, “US inflation data surprises are at their highest in the 20-year history of the series with the last 10 data points almost ‘off the chart’.“
We should be taking emergency measures to get inflation under control, but instead Joe Biden has decided that this is the perfect time for a spending spree.
Inflation is one of the hallmarks of a socialist economy, and another thing that we commonly see in socialist systems are shortages.
At this moment, we are witnessing the most severe shortages that the U.S. has experienced in my entire lifetime. As I discussed the other day, Bloomberg is reporting that “the world economy is suddenly running low on everything”.
When there are way too many dollars chasing way too few goods and services, it is inevitable that shortages will happen. And we are being told to expect that some of the shortages will get even worse in the months ahead. In fact, CNN is telling us to expect very serious gasoline shortages this summer…
And that could be the least of the problems for the those taking to the highways for summer vacations. The gas shortages experienced earlier this month when a key pipeline shut down could once again be on the horizon, according to experts.
This time, the squeeze could be triggered by the lack of tank truck drivers to deliver the fuel, and a repeat of panic buying by travelers topping off their tanks.
Meanwhile, economic conditions continue to deteriorate for those at the bottom of the food chain.
Earlier today, an article about current economic conditions in New York City really struck an emotional chord with me…
In Times Square, the most densely tourist-populated place in the United States, a mentally disturbed man known as Mr. Kim begs cops to kill him. ‘I want to die. You have a gun? Shoot,’ he pleads. After the officers demur, he picks up a plank of wood and starts smashing it against the Pele soccer shop.
On Sutton Place, one of the most affluent residential areas in the city, a lone man squats on the sidewalk, intently reading a paperback novel next to a shopping cart that contains his worldly goods. He begs for cash with a sign saying he has lost everything. ‘Trying to survive,’ it adds.
Joe Biden may think that he is going to bring the U.S. economy back to life with all of the borrowing and spending that he is doing, but the truth is that it is just going to make our long-term problems even worse.
Unfortunately, a lot of our long-term problems are rapidly becoming short-term problems, and that is not good news for any of us.
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