Why central bank wont stop printing money
How does it affect you and what you need to do to be prepared
Nick has worked closely with Doug Casey for many years and was previously Editor in Chief here at International Man.
He’s known for spotting Big Picture geopolitical and economic trends ahead of the crowd and seeing crises before they come.
Nick has been to countless countries that have experienced hyperinflation and financial crises… including Zimbabwe, Lebanon, Haiti, Turkey, Argentina, Syria, Nicaragua, Bosnia, Colombia, Ukraine, Kazakhstan, Iran, and many other volatile places most people wouldn’t dare go to.
He knows what really happens during a monetary “reset”… and what you should do.
Nick’s insights are particularly urgent today…
That’s because the US is on the cusp of its worst crisis in nearly a century.
You’ll find all the details in the discussion with Nick below.
Intercontinental Man: The US government has printed more money recently than it has for its nearly 250-year existence.
The trend doesn’t seem to be letting up.
So, does the US government have no other choice but to continue printing more money?
Nick Giambruno: What will the Fed do when it can no longer maintain the charade that inflation is under control?
That is the $64,000 question.
The Fed has already printed trillions — and shows little sign of slowing down — which means much higher inflation is already baked into the cake. The only question is how the Fed will respond to it.
Ludwig von Mises, the godfather of free-market Austrian economics, summed up the Fed’s dilemma:
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
The Fed has two choices: 1) keep printing trillions and let inflation skyrocket or 2) tighten monetary policy and watch the markets crash.
In other words, it can sacrifice the stock market or the dollar.
When faced with the choice, politicians usually choose the most expedient option. Therefore they are likely to choose the easy option — keep printing money.
Further, unless Congress makes some politically impossible decisions to cut spending, the US government will have endless multitrillion-dollar deficits that ever-increasing money printing will have to finance.
The Congressional Budget Office estimates the total deficit between now and 2031 will be close to $20 trillion, but that will almost certainly understate the actual numbers.
Who is going to finance this, conservatively, $20 trillion shortfall? The only entity capable is the Fed’s printing presses.
But there’s another compelling reason the US government won’t tone down the printing presses. That is because inflation reduces the real debt burden. It allows you to borrow in dollars and repay in dimes.
Inflation is a boon to debtors, and there is no bigger debtor in the history of the world than the US government.
Here’s the bottom line. The US government is incentivized to continue creating enormous amounts of inflation.
That’s terrible news for anyone who holds their savings in the US dollar.
So, yes, the US government has no choice but to continue printing. That is the undeniable long-term trend — even if they make meaningless gestures to the contrary in the short term.
Max Keiser summed up the situation best, “you can’t taper a Ponzi scheme.”
A brief look at how the US government finances itself reveals that it is, without a doubt, running a giant Ponzi scheme. And like other Ponzi schemes, if they stop pumping fresh money into it, the whole thing will collapse.
The big difference, of course, is that unlike private Ponzi schemes, the US government can continue to pump new money into its scam by printing money. So that is exactly what I expect them to continue doing because if they stop, the whole house of cards will collapse.
That’s the Big Picture everyone should keep in mind.
That’s not to say that the Federal Reserve won’t make some token moves to tighten in the short term. They probably will. But I expect they will quickly resume the exponential money printing once the markets start to tank and institutions fail.
There’s another important reason why any real monetary tightening is off the table. That’s because the US government couldn’t afford the interest on the federal debt if rates came anywhere close to their historical levels.
When you put it all together, the long-term trend is clear.
The US government has no choice but to continue printing increasing amounts of currency — notwithstanding any token moves to tighten. It’s a doom loop from which they cannot escape.
It’s that fundamental view that informs my investment decisions. I am more interested in getting the Big Picture right than gambling with short-term trades in rigged markets.
Intercontinental Man: Inflation hit record highs in the US recently.
Initially, the Fed, the mainstream media, and the Biden Administration tried to ignore its existence, then they said it was merely “transitory,” and now some of them are claiming that “inflation is good.”
What’s really going on here?
Nick Giambruno: For the reasons I described above, the US government — and those connected to it — are the biggest beneficiaries of inflation. It’s the reason why you hear all these ridiculous things from the Fed and its apologists in academia and media about how “inflation is good.”
What kind of person thinks higher grocery, gas, clothing, rent, and medical care costs are a good thing?
The only ones who do are fools or those who benefit from lowering the standard of living of everyone else. It’s like saying America needs more tapeworm infections. It’s repugnant.
Please don’t believe this absurd gaslighting deception.
They’re spitting on your boots and telling you it’s raining.
The reality is that inflation is out of control, there’s nothing that can stop it, and it’s poisonous for individuals and the economy.
Here’s the ugly truth the government, the mainstream media, and academia don’t want you to know…
The Federal Reserve and other central banks only exist to steal money from you through inflation and redirect it to the politically connected. That is their primary purpose, and it always has been.
Money represents your time and energy — your life. So they are, in fact stealing your life via inflation.
Any honest assessment of the situation reveals that it’s a tyranny of historic proportions — like feudalism and slavery.
That’s why they go through such lengths to propagandize and confuse you about inflation. They know the truth is ugly, and they don’t want you to know about it or their role in it.
Intercontinental Man: We’ve seen what happens when governments print their currency until it’s worthless throughout history. Argentina, Venezuela, Zimbabwe, and many others have tried this. And the outcome is always the same.
Nonetheless, the US government seems to think its immune from economic reality.
What other tricks or cards do they have to play at this point?
Nick Giambruno: Whatever they call it and whatever form it takes, you can be sure the net effect will transfer more money and power to the government.
They are proposing patently ridiculous policies like taxing unrealized capital gains and a wealth tax, which shows they are getting desperate.
But unfortunately, I think the Clown World is just getting started.
Out-of-control inflation is also a common excuse for governments to implement capital controls, price controls, wealth confiscations, and all sorts of other nasty measures.
For example, in Argentina, where prices regularly rise 40% or more each year, they made it illegal to publish inflation statistics that differ from the official government numbers.
I wouldn’t be surprised in the least if the US government did something similar. At a minimum, discussing inflation statistics other than the government’s rigged official numbers might be deemed “disinformation” and cause you or your business to be de-platformed.
Perhaps the most terrifying item on the menu is central bank digital currencies (CBDCs), which would enable an Orwellian surveillance system that monitors and controls every penny you earn, save, and spend. CBDCs are an important topic; we should dedicate our next conversation to them.
Intercontinental Man: What can savvy individuals and prudent investors do to profit and protect themselves from all of this insanity?
Nick Giambruno: Inflation has financially wiped out countless millions throughout history. But you don’t have to be one of them.
The good news is that you can turn lemons into lemonade. By making the right financial moves, you can not only avoid crippling losses but actually benefit from inflation.
