Inflation!

That is the brand new phrase driving the markets.  In fact all this freshly-printed cash was ultimately going to spill out into the economic system however, abruptly (after strategy meetings at Davos) all of the prognosticators are actually spinning inflation as the brand new motive the markets will go increased and better.  And it is a good motive, as you possibly can see from this chart of the M1 Cash Provide (bodily cash), which has jumped from 4Tn to six.8Tn (70%) in 2020.

Have in mind it took the USA of America 244 years to get to $4Tn and we simply added $2.Tn in a single yr.  As Admiral Farragut stated: “Full pace forward and rattling the torpedoes” and that sums up the Fed’s technique fairly properly as they’ve FLOODED the World with {Dollars} previously 12 months however these {Dollars} aren’t transferring – as a result of we’re all locked in our homes.  They’re transferring to Amazon and Ebay and just about each streaming sevice on the planet and to ISPs and, after all to Apple and to Grub Hub and Door Sprint and Cloud Servers – the stuff we’re doing inside however think about what is going to occur after we go exterior and spend 70% more cash than we had in 2019?

In fact there’s going to be inflation and, relying on the way you mannequin it, there could possibly be MASSIVE INFLATION forward as 70% more cash in circulation can result in 70% extra spending and a 70% enhance to our GDP, from $20Tn to $34Tn and that would scale back our debt to GDP ration again under 100% (barely).  We have carried out this earlier than, after all.

After World Warfare 1: