Get ready to pay much more for groceries. I have been warning that the flood of new money that the Federal Reserve and Congress have been pumping into the system would have very serious consequences, and I have also been warning that food prices would be shooting higher. When things start getting really crazy, demand for food and other basic essentials goes way up, and meanwhile this pandemic has significantly disrupted production of certain products. So even though most of the economy is currently still in a deflationary phase, food prices are beginning to spike. In fact, the U.S. Labor Department says that we just witnessed the largest one month increase since February 1974…
The Labor Department reported Tuesday that prices U.S. consumers paid for groceries jumped 2.6% in April, the largest one-month pop since February 1974. The spike in supermarket prices was broad based and impacted items from broccoli and ham to oatmeal and tuna.
The price of the meats, poultry, fish and eggs category rose 4.3%, fruits and vegetables climbed 1.5%, cereals and bakery products advanced 2.9%, and dairy goods gained 1.5%.
Sadly, this is just the beginning.
Prior to this pandemic, Americans spent about 10 percentof their incomes on food.
As this new economic depression deepens, expect that number to eventually more than double.
We live at a time when global food supplies are becoming increasing stressed for a variety of reasons. In wealthy countries this is going to force food prices aggressively higher, and in poor countries this is going to mean that a lot of people simply will not have enough to eat.
Already, we are seeing some crazy prices for certain items here in the United States. King Arthur Flour is very popular these days, and because supplies have become so tight a single bag is now selling for more than 26 dollars on eBay…
Five-pound bags of King Arthur Flour have been so hard to score that they were selling this week on eBay for $26.49, five times the store price.
If you planned on stocking up on flour, hopefully you did it ahead of time.
Many out there are suggesting that the best thing that we can do during an economic environment such as this is to keep showering the American people with more government checks.
In fact, Democrats in Congress have just introduced a new bill that would borrow and spend an additional three trillion dollars that we don’t currently have…
State and local governments would share nearly $1 trillion in federal aid to cover their coronavirus-related costs and families would get another round of direct payments under a stimulus bill House Democrats unveiled Tuesday.
The more than $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, also would expand unemployment assistance, boost food stamps, increase emergency grants to small businesses trying to weather the COVID-19 pandemic that has slammed the economy and upended daily life in the U.S.
Without a doubt, millions upon millions of Americans are deeply hurting right now. Just about everyone has been thrilled to receive the first round of “stimulus checks”, and certainly very few people would complain if another round was sent out.
But if sending everyone a thousand dollars is good, wouldn’t sending everyone a million dollars be even better?
Needless to say, throwing giant piles of money around recklessly is not a good idea, because it destroys the value of our currency.
Venezuela tried that, and at this point almost everyone in the country is a millionaire…
What if I told you that in the socialist paradise of Venezuela, everyone’s a millionaire?
The Bolivarian Revolution has raised the minimum wage over 50 times throughout the past 20 years. As of May 2020, it’s been set at 400,000 bolivars, plus a 400,000 socialist food ticket bonus, bringing it to an astounding total of 800,000 bolivars per month.
But even though there are so many “millionaires” running around, almost everyone in Venezuela is living in deep poverty because the money has become virtually worthless.
Do we really want to become just like Venezuela?
Because that is the path that we are currently on.
Every time a new dollar is created, every existing dollar that you currently hold declines in value.
And every time a new dollar is created, the value of your paycheck goes down if your employer doesn’t give you a raise to match the increase in the money supply.
But the mainstream media continues to be enamored by the Federal Reserve’s ability to “solve our problems” by creating trillions of dollars out of thin air. Just consider the following quote from a recent USA Today article…
It works like magic. With a few strokes on a computer, the Federal Reserve can create dollars out of nothing, virtually “printing” money and injecting it into the commercial banking system, much like an electronic deposit. By the end of the year, the Fed is projected to have purchased $3.5 trillion in government securities with these newly created dollars, one of many tools it is using to help prop up the ailing economy during the COVID-19 pandemic, according to Oxford Economics.
“It works like magic”?
You can probably imagine how I responded when I first read that.
They make it sound like some sort of Disney production, but in reality what the Federal Reserve is doing is slowly but surely turning us into the Weimar Republic.
Unfortunately, the mainstream media will continue to cheer the Fed on as they steadily kill the U.S. dollar, but none of us will be cheering when a loaf of bread costs 5 dollars and a gallon of milk costs 10 dollars.
A torrent of newly created money is not going to fix our economy. What we really need is for the American people to be allowed to go back to work, but quite a few states are indicating that some restrictions may not be lifted until August or later.
And even if all of the restrictions were lifted immediately, fear of COVID-19 is going to keep many Americans from resuming normal activities for the foreseeable future…
Most Americans say they would be uncomfortable returning to their regular routines today, even as they are increasingly leaving their homes to visit others, according to a new CNN Poll conducted by SSRS.
The 58% who say they are not comfortable returning to their routines today is similar to the 60% who said last month that they would be uncomfortable doing so if guidelines on social distancing expired on April 30. On the other side, 41% say they would be comfortable resuming their regular routines now.
What all of this means is that we are going to be dealing with an economic depression for a long time to come, and every new crisis that erupts during this period of time is just going to intensify our problems.
For a long time, I warned that an economic collapse was coming, but I don’t have to do that anymore because the economic collapse is here.
Now the value of our currency is being absolutely destroyed by our authorities as they respond to this economic collapse, and that is going to have very serious implications for our future.