The Federal Open Market Committee’s unanimous decision on Wednesday not to raise the federal funds rate, which banks charge each other for overnight loans, has champagne corks popping in some quarters, where it is hailed as evidence of the long-in-coming conquest of inflation; while others see Federal Reserve Chairman Jerome Powell turning chicken in the face of a long-term price problem that needed far more drastic, sustained measures than ten consecutive months of Fed funds rate increases totaling 500 basis points.
The Consumer Price Index may have dropped every month for almost a year now, sinking to its current 4 percent. But core inflation—which excludes the volatile, and therefore sometimes misleading, categories of food and gasoline—rose another 0.4 percent in May, as it has on average during the preceding months of this year. It remains at a year-over-year high of 5.3 percent. Both that and the 4 percent CPI are far above the Fed’s target of 2 percent inflation.
Until President Joe Biden’s arrival in the White House nearly two and a half years ago, inflation of any consequence was unknown in America for decades. In the 1980s, Fed Chairman Paul Volcker wrenched the curse of persistent high inflation out of the economy, and President Ronald Reagan, while providing Volcker with all-important political cover by withholding any real criticism of the Fed, immediately ended the long-standing price controls on domestic oil within weeks of his taking office—an intrusion by government that had been diverting global supply and causing lines of cars at gas stations.
Reagan also demonstrated that Big Labor’s power was on the wane by firing illegally striking federal air-traffic controllers. And his massive 25 percent income tax rate cuts, attacked at the time by establishment economists as inflationary, proved that allowing Americans to keep more of their wealth does not aggravate prices.
The Reagan-Volcker low-inflation legacy withstood a lot over three-plus decades but it has not been able to take the punch of Biden’s and ever-more-radicalized congressional Democrats’ spending spree. He and a Congress controlled by his own party set in motion well over $3 trillion in additional spending, while the Fed, fearing COVID-spurred economic collapse, deployed its prodigious lending powers “to an unprecedented extent … forcefully, proactively, and aggressively” in response to COVID, buying hundreds of billions of dollars in Treasury securities and mortgage-backed securities guaranteed by the federal government.
Since the beginning of last summer, the Fed has shifted gears violently from its previous strategy of excessively loose policy. But the upshot in light of the Fed’s Wednesday action, absurdly characterized as a “hawkish pause,” is that inflation is far from cured, and the economy can’t depend on long-term Volckeresque help from Jay Powell. His comments on Wednesday, that not a single FOMC member supported easing at any time in 2023 and that there would two more Fed funds increases later in the year, amount to touting the strength of the aspirin being prescribed for a debilitating illness.
And for what? There is no avoiding economic downturn. Not only does the Conference Board forecast three quarters of negative GDP on the horizon, but simultaneously, “Asian economies are expected to drive most of global growth in 2023, as they benefit from ongoing reopening dynamics and less intense inflationary pressures compared to other regions.”
In the wake of the federal government handing out spending money to employees rendered idle by the lockdowns, credit card debt now actually stands at a higher level than before COVID—nearly $988 billion. Meanwhile, the Consumer Financial Protection Bureau is going to force credit card lenders to increase rates, and yank away some customers’ credit by regulating new restrictions on the ability to charge late fees—which are a disincentive to the over-extending of credit card use.
Then, there is the federal government’s own taxpayer-financed credit card. The Congressional Budget Office determines that Social Security spending will overtake revenues to the program in less than a decade, in 2033, while the same fate awaits Medicare.
Indeed, Powell admitted once again on Wednesday that the country is on an “unsustainable fiscal path.” But Biden’s glee earlier this year in attacking Sen. Rick Scott, the Florida Republican, for proposing a universal five-year sunset on federal spending legislation, including entitlements, points to the Democrats’ wish to wait and wait until the last possible minute before reducing Social Security and Medicare benefits on their terms, i.e. paired with tax increases that will bring the private sector job environment more in line with socialist-leaning Europe.
Recession is not the only trouble ahead for the private sector. Far under the radar is deep blue New York State’s ongoing crusade against business—with national consequences—under the assumption that the 10 percent of the nation’s Fortune 500 companies based in New York will put up with anything the state and city governments can throw at them, rather than relocate to somewhere where you can’t find a good bagel or with inadequate museum and theatre life.
Under the pretense of fighting monopolies, the State Senate has passed a bill that would slap corporations with a fine of as much as $100 million for, truth be told, simply being too successful. A State Assembly committee is now examining the proposed law. Both chambers are dominated by left-wing Democrats.
In its twisted, anti-free market thinking, the legislation considers a company that controls only 40 percent of the market to be a monopoly. New York State already suffers from the highest combined income tax rate in America, and even has the shameful distinction of being the only state to have increased income taxes during the COVID lockdowns. If there is a sizable exodus from the Empire State of major businesses in the financial and other sectors, it could mean the forced geographical upheaval of this country’s financial establishment, with unpredictable impacts.
Underlying all of this—from a long too-powerful Fed incapable of managing inflation properly to spending-induced inflation, to the political hazards of fixing entitlements, to the left’s unquenchable hatred of the private sector—can be found apparent immoral governmental overreach.
Exposing the ubiquitous, poisonous tentacles of the state wouldn’t make a bad theme for a presidential candidacy.
Article cross-posted from our premium news partners at The Epoch Times.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
