There are times in American history where inflation is a structurally obvious measure of monetary and price appreciation and the government logically reports the data that the American people have endured and witness thus verifying current events.
Then there is the past twenty plus years.
The unfortunate side of the post-1987 world which so many felt was the apocalypse for financial markets forever was that moral hazard was slowly phased out by socializing risk, while the acceptance of data for political convenience became the new normal.
The inflationary data and situation for consumers is undeniable, but because the 20% of the 80/20 economy can absorb higher prices, the media and political elites would rather focus on the “lifestyles” of those and who individuals should aspire to be rather than the reality of the situation for the masses.
On Sunday morning Scott Bessent stated the following regarding inflation (via Bloomberg):
Bessent Says Housing Will ‘Unfreeze’ in Weeks, Sees 2% Inflation
Excerpt:
“The housing market is stuck now, but I would expect that the housing market, sometime in the next few weeks, is going to unfreeze,” Bessent said.
I guess we’re all getting DOGE checks increasing our income by $30,000 per household annually so the affordability issue goes away in the next two weeks, right?
The truth is that things are far worse than the Trump administration can admit and while Biden’s clown show created many of the problems they are inheriting, it started with Trump’s inflationary Covid policies in 2020 that were only doubled and tripled down upon during the previous regime’s four years of inflationary terror.
To add to the fervor, President Trump actually posted the following on Truth Social this morning:
I am totally agnostic towards cryptocurrencies but this one takes the cake.
This executive order President Trump refers to carries no weight in law, does nothing to introduce a cryptocurrency reserve beyond studying the feasibility of such, and appears to be nothing more than a promotional move to pump up flailing prices on speculative assets for some of the administration’s friends; especially the second tier cryptocurrencies.
The reaction today was obvious and immediate as someone who is a FoD (Friend of Donald) got an immediate bailout:
Ignore USDC in the chart above as it too shall pass, like a Fartcoin.
What is the purpose of all of this?
Politics my friends, pure and simple.
On Tuesday March 4th, President Trump will present is non-State of the Union speech to the Congress in a sort of State of the Union format. Democrats will boo, Republicans will cheer, platitudes and promises will be made, and the previous administration rightly admonished.
Yet the speculative casino America’s economy and markets has been become has done nothing to relocate sustainable manufacturing back on our shores nor a base for permanent economic expansion.
The dependency on third world nations for basic inputs plus finished goods and our country’s ability to project power and protect them has been cast into doubt; not because the angry midget from Kiev stormed out of the Oval Office but due to twenty-five years of neglect to America’s logistics capacity which is sadly starting to impact our military’s ability to project power around the world. A perfect example of that idea is what is happening in the Democratic Republic of Congo where supplies of rare earth metals are actually at real risk. should the situation continue to deteriorate further.
Logically, one can only draw the conclusion is that until real inflation can be sustainably reduced via deflation not only in consumer goods, but major capital purchases like homes and cars without an economic and market crash the United States economic model will be one of speculation inflation. The masses will be led to believe that the costs of goods and services are dropping relative to their incomes because the earnings based on speculative investing will raise all boats and offset a crash.
Stagflation will never be mentioned as an aspect of this administration’s policy decisions however it is the only solution to service the national debt and theoretically allow at least half of the consumers to maintain and service their personal credit obligations. Degradation of real estate values of 10% to 20% would be considered as acceptable losses to Bessent and company as that would increase affordability while not destroying the so-called “generational wealth” generated since the Great Financial Crisis ended.
Trump had best hope that splitting twos works in this scenario, or the US could be well on its way to the hyperinflationary solution which ends in tears for everyone involved.
(Title picture via Grok/AI Beta3.0)
Views: 80
