(Mises)—The money supply is rising again, and persistent price inflation is not a surprise. Price inflation occurs when the amount of currency increases significantly above private sector demand. For investors, the worst decision in this environment of monetary destruction is to invest in sovereign bonds and keep cash. The government’s destruction of the purchasing power of the currency is a policy, not a coincidence.
Readers ask me why the government would be interested in eroding the purchasing power of the currency they issue. It is remarkably simple.
Monetary inflation is the equivalent of an implicit default. It is a manifestation of the lack of solvency and credibility of the currency issuer.
Governments know that they can disguise their fiscal imbalances through the gradual reduction of the purchasing power of the currency and with this policy, they achieve two things: Inflation is a hidden transfer of wealth from deposit savers and real wages to the government; it is a disguised tax. Additionally, the government expropriates wealth from the private sector, making the productive part of the economy assume the default of the currency issuer by imposing the utilization of its currency by law as well as forcing economic agents to purchase its bonds via regulation. The entire financial system’s regulation is built on the false premise that the lowest-risk asset is the sovereign bond. This forces banks to accumulate currency—sovereign bonds—and regulation incentivizes state intervention and crowding out of the private sector by forcing through regulation to use zero to little capital to finance government entities and the public sector.
Once we understand that inflation is a policy and that it is an implicit default of the issuer, we can comprehend why the traditional sixty-forty portfolio does not work.
Currency is debt and sovereign bonds are currency. When governments have exhausted their fiscal space, the crowding-out effect of the state on credit adds to the rising taxation levels to cripple the potential of the productive economy, the private sector, in favor of constantly rising government unfunded liabilities.
Economists warn of rising debt, which is correct, but we sometimes ignore the impact on currency purchasing power of unfunded liabilities. The United States’s debt is enormous at $34 trillion, and the public deficit is intolerable at nearly $2 trillion per year, but that is a drop in the bucket compared with the unfunded liabilities that will cripple the economy and erode the currency in the future.
The estimated unfunded Social Security and Medicare liability is $175.3 trillion (Financial Report of the United States Government, February 2024). Yes, that is 6.4 times the GDP of the United States. If you think that will be financed with taxes “on the rich,” you have a problem with mathematics.
The situation in the United States is not an exception. In countries like Spain, unfunded public pension liabilities exceed 500% of GDP. In the European Union, according to Eurostat, the average is close to 200% of GDP. And that is only unfunded pension liabilities. Eurostat does not analyze unfunded entitlement program liabilities.
This means that governments will continue to use the “tax the rich” false narrative to increase taxation on the middle class and impose the most regressive tax of all, inflation.
It is not a coincidence that central banks want to implement digital currencies as quickly as possible. Central Bank Digital currencies are surveillance disguised as money and a means of eliminating the limitations of the inflationary policies of the current quantitative easing programs. Central bankers are increasingly frustrated because the transmission mechanisms of monetary policy are not fully under their control. By eliminating the banking channel and thus the inflation backstop of credit demand, central banks and governments can try to eliminate the competition of independent forms of money through coercion and debase the currency at will to maintain and increase the size of the state in the economy.
Gold vs. bonds shows this perfectly. Gold has risen 89% in the past five years, compared to 85% for the S&P 500 and a disappointing 0.7% for the US aggregate bond index (as of May 17, 2024, according to Bloomberg).
Financial assets are reflecting the evidence of currency destruction. Equities and gold soar; bonds do nothing. It is the picture of governments using the fiat currency to disguise the credit solvency of the issuer.
Considering all this, gold is not expensive at all. It is exceedingly cheap. Central banks and policymakers know that there will be only one way to square the public accounts with trillions of dollars of unfunded liabilities. Repay those obligations with a worthless currency. Staying in cash is dangerous; accumulating government bonds is reckless; but rejecting gold is denying the reality of money.
Bypass Big Tech Censors
Discover the Freedom of True American Healthcare: Why America First is Revolutionizing Protection for Patriots
In a world where government overreach and skyrocketing premiums are squeezing the life out of hardworking Americans, one innovative agency is standing tall for liberty and affordability. Meet America First Healthcare—the private health insurance powerhouse dedicated to putting *you* first.
Founded by entrepreneur Jordan Sarmiento, this isn’t just insurance; it’s a shield for your family’s future, built on the unshakeable belief that private enterprise delivers better results than bureaucratic red tape.
Picture this: Jordan’s own story hits close to home for so many of us. A sudden medical emergency landed him with a staggering $95,000 bill. Under a traditional plan? He’d be buried in debt. But with America First’s patented health insurance, that nightmare shrank to just $500 out-of-pocket. That’s not a fluke—it’s the promise of coverage that works *for you*, from day one.
Breaking Free from the Chains of Conventional Coverage
Let’s face it: The status quo stinks. Marketplace.gov and big-insurance behemoths hit you with sky-high deductibles—thousands you’d have to pay before benefits even kick in—leaving massive holes in your protection. Need a routine mammogram, colonoscopy, or EKG? Good luck without forking over more cash. And don’t get us started on the gaps in dental, vision, or critical illness support when heart attacks, cancer, or kidney failure strike.
America First Healthcare flips the script. As a proud advocate for private solutions over government intervention, they craft custom plans that slash costs by 20% compared to traditional options. We’re talking comprehensive coverage that includes:
- Preventative and Wellness Care: Physical exams, screenings, and EKGs covered right away—no waiting games.
- Telemedicine Access: Virtual doctor visits anytime, anywhere, for that peace of mind.
- Accident and Critical Illness Protection: Real safeguards against life’s curveballs.
- Add-On Boosts: Dental, vision, disability, and supplemental plans to plug every leak.
Whether you’re an individual stepping off your parents’ plan, a growing family with kids in tow, or a small business owner tired of employee headaches, their tailored approach fits like a glove. Small businesses? Unlock group benefit rates usually reserved for corporate giants—without the red tape.
And for those in-between moments? Short-term insurance steps in as an ultra-affordable bridge, while life insurance ensures your loved ones are never left vulnerable.
Real Americans, Real Wins
Don’t just take our word for it. Thousands of freedom-loving families have already ditched the old system for America First. “Finally, insurance that aligns with our values and actually saves us money,” shares one client. Another raves, “Our small team got big-business perks without the hassle—it’s a game-changer.” These aren’t scripted lines; they’re the voices of patriots who’ve reclaimed control over their health destiny.
Your Move: Secure Your Shield Today
Why settle for less when you can demand better? America First Healthcare isn’t about profits—it’s about powering the American dream with reliable, value-driven protection. Plans are available year-round, no open-enrollment nonsense.
Ready to uncover the gaps in your current setup and lock in savings? Schedule your FREE healthcare review today at America First Healthcare. In under 15 minutes, their experts will map out options that fit your life, your budget, and your principles.
America First isn’t just healthcare—it’s a declaration of independence. Join the movement. Your family’s freedom starts now.