{"id":10555,"date":"2020-04-06T04:34:55","date_gmt":"2020-04-06T04:34:55","guid":{"rendered":"http:\/\/emilynews.com\/blog\/?p=10555"},"modified":"2020-04-06T05:30:36","modified_gmt":"2020-04-06T05:30:36","slug":"news-commentary-1028-the-us-multi-trillion-dollar-stimulus-package","status":"publish","type":"post","link":"https:\/\/emilynews.com\/blog\/?p=10555","title":{"rendered":"News Commentary #1,028 – The US Multi-Trillion Dollar Stimulus Package"},"content":{"rendered":"\n

Printing Money from Thin Air!?<\/strong><\/p>\n\n\n\n

People in the US and around the world struggle to understand how governments can \u201ccreate\u201d money as they see fit.\u00a0 And secretly wish they could do this themselves!\u00a0 Of course, this is what\u2019s happening as governments come up with funds in support of programs to counter the adverse effects of the coronavirus pandemic.\u00a0 Here\u2019s an article from Bitcoin dot com<\/em> that offers some thoughts on this.\u00a0 I think you will find it very interesting\u2026<\/p>\n\n\n\n

Printing Money from Thin Air – How the Fed Reduces Purchasing Power and Makes You Poorer<\/strong><\/p>

Unless you have your head in the sand, you\u2019ve probably realized that governments and central banks can print money out of thin air and in unlimited amounts. The United States and the Federal Reserve have been creating money from nothing for years because they had exhausted all their monetary policies. Despite the fact that many Americans will be happy to get a $1,200 check from the Treasury, the move will essentially debase the U.S. dollar, reduce its purchasing power, and make every citizen poorer.<\/p>

The Multi Trillion-Dollar Stimulus Package<\/em><\/p>

The big stimulus package has been approved and the Federal Reserve and the U.S. Treasury have already funneled trillions into the hands of financial incumbents. Further, these entities plan to send direct payments to each American as well. News.Bitcoin.com reported yesterday that a 2 trillion-dollar stimulus plan was in the making and some estimates say the package could end up being upwards of $6 trillion. Essentially, there\u2019s certain criteria Americans have to fit financially and people making $75K or less annually will get a check for $1,200. People with children will also be eligible for $500 per child under the plan.<\/p>

Unfortunately, people who are excited about this money do not understand how destructive it will be to their purchasing power. All the U.S. government is doing is copying the tactics of currency debasement used by every fallen empire before it, like the Byzantines and Romans. Moreover, a number of central banks worldwide are discussing giving checks to citizens. Financial institutions like the Bank of Canada has also promised to give Canadians $2K per resident. Canada\u2019s biggest banks announced last week that they are offering relief to homeowners by allowing deferred payments on mortgages. However, the Canadian banks plan to just tack the deferred payment onto the back-end of the loans and profit with extra interest. U.S. banks are also planning to profit from people who can\u2019t pay their mortgage loans on time as well by simply racking up the loan\u2019s interest.<\/p>

Central banks have several methods when it comes to tweaking the monetary system like increasing the amount available for loans and removing the deposit requirement banks have to hold to remain solvent. The Fed also issues Treasury bonds so private banks and foreign investors can purchase them but this tends to increase interest rates. So instead of having to pay more money back to the lenders, the Fed buys the Treasury bonds itself in order to drop the rate. When the Fed does this scheme (quantitative easing or QE) with securities, Treasuries, bonds, and equities, the Fed is essentially creating money out of thin air to bolster the economy in the short term. This move, in turn, reduces the value of USD because there is more money than the number of products and services. To-date the U.S. government\u2019s deficit is around $23 trillion and the interest owed plus the trillions more created essentially creates an everlasting debt vacuum.<\/p>

How the Money Printing Debases Currency, Causes Inflation, and Reduces Your Wealth<\/em><\/p>

Basic economics clearly shows that the increase of any money supply causes inflation and reduces purchasing power. The reason for this is because a spike in demand exceeds supply causing the prices for everything to jump higher. Every fallen empire and every modern government today has always inflated the money supply and the \u2018just print more\u2019 attitude has been infectious.<\/p>

Unfortunately, scholars and economists understand that today\u2019s financial incumbents and U.S. politicians are addicted to selling debt to generations who are not even born yet. The last 30 years of so-called progress in America has stemmed from the revolving debt machine. Back in 2010, a group of well known economists wrote to former Fed Chair Ben Bernanke and told him how dangerous it was to continue the large-scale asset purchases (QE).<\/p>

\u201cWe believe the Federal Reserve\u2019s large-scale asset purchase plan (so-called \u201cquantitative easing\u201d) should be reconsidered and discontinued,\u201d the economists warned. \u201cWe do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed\u2019s objective of promoting employment.\u201d<\/p>

Raising Taxes, Austerity Measures and the \u2018Biggest Budget Liability\u2019<\/em><\/p>

Politicians think they can cure the disease by just raising taxes on nearly everyone under the sun, but they claim they will take from the rich and corporations. To combat the rising inflation the common solution is higher taxes and increased austerity measures. When people ask why they can\u2019t just print as much money as they want and just remove taxes, the question will not be answered. This is because bureaucrats expect you and future generations to pay for all of the debt with interest. A recent tweet from Coinshares executive, Meltem Demirors, notes how taxation is all part of the plan.<\/p>

\u201cThe U.S. expects to collect close to $4 trillion in taxes in 2021. Over 75% of it comes out of our paychecks \u2013 as individual income tax and payroll tax,\u201d Demirors tweeted on Wednesday.<\/p>

\u201cNow like many people, the U.S. government spends more than it makes,\u201d Demirors added. \u201cBefore the recent turmoil, the U.S. government\u2019s 2021 budget was expected to have a $966 billion deficit. Since we\u2019ve been doing this for a while, the total national deficit is $23 trillion. It\u2019s more than the entire GDP of the US in any given year (the sum of everything produced). If you add in unfunded liabilities, the number is closer to $120 trillion. $120T = $798k per taxpayer.\u201d The Coinshares executive added:<\/p>

35% of the U.S. workforce, boomers, are set to retire in the next decade. They also account for the biggest budget liability \u2013 relying on pensions, social security, medicare \u2013 money that simply ISN\u2019T THERE.<\/p>

After understanding that U.S. politicians and all governments simply print money out of thin air, many bitcoiners have opted out of the insane monetary system. This is because crypto advocates understand the importance of not only censorship-resistant money, but also a predictable, mathematical system that cannot be inflated on a whim. Central banks and the Fed like to keep the inflation rate around 2% but after the whole world just created trillions out of thin air that number is going to be much harder to control. BTC\u2019s inflation rate, on the other hand, will be dropping to 1.8% after the halving in May.<\/p><\/blockquote>\n\n\n