How Bad Might Biden’s Inflation Get?

4
1031

Why is no one asking what will happen as inflation increases? The Feds have a terrible track record managing inflation and debt. And now, they are trying to use the same monetary policy they used in the 1980s when we didn’t have enormous debt. Economist Peter Schiff thinks we could end up in an inflationary depression.

Schiff presents a few of the scenarios we could face.

The inflation is likely over 15%, but even if you believe it is 7.9%, inflation can’t likely be extinguished with a one-quarter of a percent interest rate. Why is no one asking what if it doesn’t work? There is no historic record of inflation this high being extinguished with interest rates this low.

What if after rate hikes, inflation goes up? Nobody is asking these questions. No one is asking if what happens if the Feds have to raise interest rates to 10% or what if that isn’t high enough? This could be “catastrophic”.

What would happen if we raised the rates to 10-12% in an over-leveraged US economy?

If we had to raise the rate to 10-12%, the real estate market would crash. What about all this debt in corporations if they have to roll it over at 10% or more? Their profits would have to go to debt service. And who will be able to afford their products?

The stock prices are a function of interest rates. It will devalue their stock.

Banks would fail. If they suddenly had to pay 10% or more, they couldn’t pay it off. The FDIC doesn’t have any money to save these banks.

We have a $30 trillion debt, financed with T-bills and if interest rates go to 10%, interest rates would be 3 trillion a year.

He said the 20% interest rates in the ’70s would not be as bad as 10% now because we were still a creditor nation with little debt in the ’70s. We had trade surpluses. We are a complete basket case today and couldn’t handle even 5%. In 2018, we couldn’t handle 2.5% interest rates. The economy was imploding.

Watch:


PowerInbox
0 0 votes
Article Rating
Subscribe
Notify of
guest
4 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Too Little Too Late
Too Little Too Late
2 months ago

Rumor has it USA cannot pay their debt. Pension benefits will disappear, currency will be gone, hence digital currency will be in play and government will give you a digital spending card, IF YOU COMPLY….Nero fiddles while Rome burns

Anonymous
Anonymous
2 months ago

Nero IS NOT fiddling….He is conducting an entire orchestra…or have you not noticed. Covid Psych Ops was used to ‘steal an election’ and keep everyone ‘on edge’…a little ‘dementia role’ was thrown in to add spice…and now a war which they would like to get VERY hot to finish the job that started way back with GW…or even before that…the Demoncrapicshariachicomrinos KNOW that they cannot carry 2022…and if the war is ‘hot’ enough there will be NO election…giving the politicians time to complete their ‘agenda’…

Love Of Rhetorical Questions
Love Of Rhetorical Questions
2 months ago

Depends on if Iran closes the Strait of Hormuz and China dumps all of the debt.
No more petrodollar means instant Zimbabwe but isn’t that what the Long Marchers want?

huapakechi
huapakechi
2 months ago

Study the history of the Weimar Republic. That’s how bad it will get.