Go Read

I'd planned to write an entirely different piece this week but then I came across this article and I knew I had to flag it for you.  Everyone should go read "The Stimulus Package Won't Cut Povety, It Will Accelerate It".  Politicians like to believe throwing money at the problems caused by the pandemic will solve its issues.  Instead they will create inflation.  See below for an excerpt.

So why exactly {does the author} believe this stimulus package is a net negative for the bottom 50% of Americans? Simply, the benefit of a stimulus check and unemployment insurance is drastically outweighed by the negative impact of inflation, both in consumer goods and asset prices.

All the academics, millionaire bloggers, and wealthy hedge fund managers get real mad when you start to disprove their narrative that the government is cutting poverty and showering money on people. Here is a generalized view of the problem:

1. Each socioeconomic class experiences different levels of inflation. The richest hold investable assets and are less likely to purchase consumer goods most affected by inflation. The lowest socioeconomic classes hold no investable assets and are more likely to purchase inflationary goods.

2. The official inflation numbers are widely inaccurate. The official data says less than 1.5% inflation, but the Chapwood Index claims 7-12% depending on the city and Shadow Stats claims over 6% inflation as well.

3. These large stimulus packages flood the system with liquidity, which drives asset prices much, much higher. (Zero interest rates help significantly here too).

4. Those holding investable assets get wealthier and those not holding investable assets become poorer.

It is that simple. The purchasing power of the U.S. dollar is being eroded away based on historical trends, but these massive stimulus bills (which now total almost $6 trillion in a year) accelerate the problem. As I said, the second the Senate voted positively for this bill, the government is further enriching the wealthiest people in America, while simultaneously pushing the bottom 40% of Americans into a worse financial situation.

There's a lot more to the article than what I've shown above, including some proposals that I think make a ton of sense so I'd encourage you to go read the whole thing.  

We are doing a few weeks out of state and next week I'll give you my impression on some of what I've seen and heard as we've made the move south.