The US is hooked on fiat debt and the newest budget debt adds still more. From Bill Bonner at bonnerandpartners.com:
Yesterday, the House voted to go along with the budget deal, providing more money (more inflation) to just about every cockamamie scheme the feds can come up with.
The Washington Post:
The House passed a sweeping two-year budget deal Thursday that increases spending for military and domestic programs and suspends the debt ceiling through mid-2021, sending the White House-backed legislation to the Senate.
We pause to remind readers that “inflation” means an increase in the amount of money available. It can show up in consumer prices… or in asset prices.
The important thing is that once you inflate (stimulate with money and credit) an economy – either Main Street or Wall Street – people adjust their behavior. They pay more. They spend more. They borrow more.
Then, their livelihoods, their wealth, their reputations – and the entire economy – depend on more inflation. So, you’ve got to continue inflating… or go into rehab.
Inflate or Die. There’s no third choice.
In the meantime, strange and remarkable things happen. Inflation changes markets, economies, and even the way people think. The longer it goes on, the more distortions, perversions, and curiosities it brings.
Yesterday alone brought news from Oddity Central that…
A 20-year-old woman was recently arrested in Germany for walking into a car dealership and trying to buy a €15,000 (roughly $16,700) car with fake banknotes printed on a cheap inkjet printer using regular printing paper.
One employee told German media that he literally asked the woman if she wanted to play Monopoly or buy a car, but after seeing that she was serious, he called the police.
And this headline from CNN:
Nike’s rare ‘Moon Shoe’ is sold for $437,500, shattering the auction record for sneakers
And a tweet arrived with this shocker:
#Switzerland’s #yieldcurve is now negative for all maturities, hence anywhere between 3 months and 50 years.
All over the news spectrum, weirdness prevails. Comets shaped like dollar signs are seen in the night sky. Elvis is spotted in a mall in Kansas City. An egg is laid, etched with the Federal Reserve’s formula for the neutral rate… Surely, the second coming is at hand.