The Moment Jon Stewart Woke Up To The Danger of America’s Money Printer! Brrrrrrrrr!

February 20, 2022 7:29 pm

What does the fox say?

Remember that super annoying song?

Well, we never learned what the fox says but I do know exactly what sound the money-printer makes:  BRRRRRRRRRR!

And it never stops.

Just runs and runs and runs going BRRRRRRRR as it cranks out more and more money into the economy.

A literal money tree.

What’s the big deal you ask?

Well, for each new dollar printed (or each new trillion of dollars printed, which is how we count them now) the dollars in your pocket and in your bank accounts become less valuable.

Your purchasing power goes down fast.

The stats are horrendous: 40% of US dollars in existence were printed in the last 12 months.

Now read that again.

Dating back to the 1700s, we suddenly printed 40% of all dollars in just the last 12 months.

And that’s not all, here’s one more: 80% of all US dollars in existence were printed in the last 22 months (from $4 trillion in January 2020 to $20 trillion in October 2021).

For the visual learners out there, here’s what that chart looks like:

Folks, this is Weimar Germany bad, where they eventually took to using wheelbarrows full of cash just to get a loaf of bread, because their currently had been printed into worthlessness.

From TechStartUps, read this:

Is Federal Reserve repeating the same mistakes of 1921 Weimar Germany?

So if history is any guide, what the Federal Reserve is doing now has been tried throughout history. As Federal Reserve continues to print trillions of dollars out of thin air with no productivity to back it up, at some point down the road, the world will finally lose faith in the US dollar as a global currency and conclude that it no longer makes sense to store their wealth in US dollars.

Today, the Federal Reserve appears to be following the footsteps of 1923 Germany’s Weimar Republic shortly after World War I. The country has often been cited as a classic of unending money printing. Between June 1921 and November 1923, the highest monthly inflation rate rose by over 30,000% in Weimar Germany.

It all started around 1921 when Germany stopped backing its currency with gold and instead fired up its money-printing machine (similar to what the Federal Reserve is doing today) in order to finance the war. Then the money-printing machines continued printing after the war to help pay for reparations imposed upon Germany by the Allies.

In closing, below is a video from our friend, Jake Tran, about how Nixon’s 1971 decision because a turning point for the United States, and how 1971 marked the year humanity became enslaved.

I also have to share this next horribly-misguided article trying to explain why it’s not really a problem.

Oh my…

But the explanation is the best part.

“It’s ok this time!” (isn’t that what they always say?)

“This time is different!”

Well check out this take from Sohit Miglani on Medium who says it’s not a problem this time because they didn’t literally “print” the dollars, they just injected them into the economy.  Facepalm.  Take a look:

Firstly, let’s get some facts straight – The US government didn’t print 40% of the circulating USD in the last 12 months. In fact, most of that money wasn’t printed at all. The US government approved massive stimulus funding ($6.55 trillion in 2020) that was used to keep markets afloat and prevent the economy from a severe crash. But where did all this money go? Well, most of it is still with the government but in different forms. The government used this money to buy back assets and treasuries from banks that they wished to sell. This helped the banks remain afloat and escape massive losses. It is important for the banks to escape these losses or else we’re looking at a wide-scale deflation of the value of the US dollar and potentially the crash of banks with not enough liquidity (available cash at hand).

But the US government technically owns these assets/treasuries and they can always sell them back to the banks when the current prices match those of pre-March 2020. Hence, the money was created as a way of making a buffer that allows the economy to absorb losses while it recovers. Most of this money doesn’t exactly go into circulation within the public and remains electronic.

Don’t believe me? Go ahead and check the print order archive from the Federal Reserve. They only printed notes worth $146 million in 2020 (https://www.federalreserve.gov/paymentsystems/2020_currency_print_orders.htm). For comparison, the Treasury printed $206 million in 2019 and $233 million in 2019 (more than 2020).

What are the outcomes of this effort by the US government? This article by William Meehan in Forbes puts it very succinctly:
“In short, the Fed’s “excess reserves” became new and high-quality assets of the banks. The popular term for what the Fed is doing is “printing money,” and at a rate rarely seen before; in fact, most of this printing is by the banks.

“This process repeats itself; every time this happens the banks are able to purchase the unwanted assets of other market participants, using their money creation powers to do so, backed by their ‘excess reserves” with the Fed. In turn, the Fed purchases these assets in return for providing further increased “excess reserves” to its banks.
“The effect of the Fed’s actions has been to keep interest rates lower than they would have been, benefiting all borrowers, including the Government, in the process.
But if you prevent the deflation, it would create inflation like we’re seeing now. Then why is it not a big deal for the US government to keep printing money? There are two answers to this question:

The first answer is covered by Meehan’s article and largely focuses on the fact that the USD is a global reserve currency and has a very strong position in the global economy. Most countries actually buy the treasuries of the US Federal Reserve in order to make transactions since it’s the central currency of transactions across the world. Hence, the USD is not at the risk of a strong deflation or inflation in the near future. The US government still holds the treasuries that it bought back from the banks and has a strong capability to sell them in the future.

The second answer is informed by socio-economics and the basics of investment. By creating a stimulus and providing money to its citizens and banks, the government is technically ‘investing’ in them with a hope that the people and the banks can recover from their losses and create an economic output that matches that of the stimulus (or more). Without the stimulus, recovery is harder and more time-consuming, possibly leading the US economy into a long-term recession since the output is less.

I agree with many people’s opinions that this stimulus creates social inequity and is not fairly distributed across the economy. But then, without the stimulus, the social inequity would deepen even more since a middle-class American is unlikely to be able to take a hit from the recession, unlike rich people. So it may not be the best solution but it is a solution.

Now let’s go to Jon Stewart, who seems to be taking a lot of red-pills in the last few years.

I always found him very funny and very witty, unlike someone like, say, Colbert who I just don’t find funny at all.

But to each their own.

Here is the moment when Stewart (unlike Sohit) realizes in realtime during the interview what is going on and he nearly loses it.

Stewart gets it.

This is bad, very bad.

Watch here:

The solution?

I’m not a financial advisor, but if we’re in for inflation and hyper-inflation then you’re gonna find me in assets that are going to inflate.

And to me that’s cryptocurrencies, gold, silver, real estate and maybe even the stock market.

How about you?

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