With so much news about the pandemic, social justice, and the upcoming elections, no one’s paying much attention to macroeconomics.
But while you weren’t looking (or maybe you 𝘸𝘦𝘳𝘦), the Federal Reserve’s balance sheet has ballooned to more than $7.2 trillion, up from $4 trillion at the start of the year. That’s an 80% increase in seven months! Meanwhile, gold and silver prices are hitting multiyear highs, at $1,875 and $21.43 per ounce, respectively.
Well, hiding behind these numbers is a sharp decline in the U.S. dollar. In the past three months the greenback has fallen more than 5% against a basket of six major currencies. That’s a big move in the usually sleepy currency markets.
So what’s going on here? And who cares?
Well, remember that $1,200 “stimulus” check you received from Uncle Sam? Where do you think that money came from? Increases in productivity? Higher tax revenues?
No. That money was printed out of thin air, through the smoke and mirrors at the Federal Reserve. And there’s more to come. Even as I write these words, Congress is preparing another massive stimulus bill, including another round of checks. The House version of this bill, called “The Heroes Act,” will spend another $3 trillion that we don’t have. (In case you’ve lost track, that’s a 3 followed by 12 zeroes.)
So why am I dumping this gloomy news into your lap this morning?
First, because the dollar’s decline is going to impact our future in a very big way, long after the coronavirus is gone. Second, because Trump and Biden will ignore this issue. And third, because the truth might help you plan your finances.
Personally, I think it’s a great time to get real. That is, put your money into something tangible. Things like real estate, precious metals or (proceed with utmost caution!) digital currencies like bitcoin. Maybe a milk cow, a collectable, or a case of motor oil.
As usual, my advice is free … and worth every penny!
BONUS STATS: In the last 12 hours the population of the U.S. increased by 755. At the same time, we added $745 million to the national debt. (Source: https://www.usdebtclock.org/)
POSTSCRIPT: My hope is rooted in Christ, not the greenback …
