President-elect Joe Biden unveiled his massive stimulus plan last week touted as the “American Rescue Plan.” In his podcast, Peter Schiff said it was more like throwing a drowning man an anchor. Before Biden announced his stimulus plan, Jerome Powell spoke and reassured everybody that the Fed will continue with its loose monetary policy. He emphasized that the central bank will hike interest rates “no time soon.” He also pushed back against some of the other Fed presidents, particularly Atlanta Federal Reserve President Raphael Bostic, who hinted the central bank might consider “pulling back” on asset purchases in the near future. Powell seems to sincerely believe that the Fed can stimulate economic growth and create jobs by printing money.
You have the power to print all this money and you think that if you exercise that power you’re doing good. “Powell talked about how much the government is helping during the pandemic. “ Peter said if the government really wants to help, it should get out of the way. The government needs to lighten the burden that it places on the economy.
The US government set an all-time record high December budget deficit of $143.6 billion last month. In just the first quarter of fiscal 2021, the federal government spent $1.3 trillion. Last week, Joe Biden unveiled plans for a $1.9 trillion stimulus bill. So, it’s not a stimulus.
“In a nutshell, Biden wants to “stimulate” the economy with a bunch of government spending paid for by more Federal Reserve money printing. “ .
They don’t have to start looking for jobs because they got a better deal on unemployment than anything they can hope for in the employment market. Biden also included a proposal to increase the federal minimum wage to $15 an hour. Peter said that will make the unemployment benefits an even bigger deal. “Biden’s plan is effectively to incentivize people not to work by paying them more money to stay at home, and to make it more difficult for them if they actually do want to go back to work by making it harder for people with low skills to get a job because they’re not legally employable given their relatively low productivity. “
So, Biden’s plan to revive employment is going to achieve the opposite result. “All of this stimulus spending will be almost entirely financed by the Federal Reserve. “ All this money — the $1.9 trillion — is going to be printed and spent into circulation.
Source: Peter Schiff | SchiffGold
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