A new Joe Biden presidency will likely result in trillions of dollars being printed! Do you think a Joe Biden presidency will be obliged by the Federal Reserve Banks?
During summer Biden announced “a new plan to spend $2 trillion over four years to significantly escalate the use of clean energy in the transportation, electricity and building sectors, part of a suite of sweeping proposals designed to create economic opportunities and strengthen infrastructure while also tackling climate change.”
The two trillion is on top of a “Buy American” plan that aims to spend at least $700 billion dollars.
While both are worthy goals, the spending combined would cost nearly as much as the American Government receives in total taxes for 1 year.
This debt level is not being felt due to debt monetization, however. The Federal Reserve just prints money and buys government debt with it – with interest rates near zero, it isn’t out of the realm of possibility that we could be staring at negative rates like Greece has done.
The feds are likely to accelerate the spending instead of finding some breaks in the spending. The Fed said:
“Staff members throughout the Federal Reserve System continue to research the relationships among climate risks and economic and financial risks and, ultimately, to better identify the transmission channels through which climate risks could affect the financial sector. This work is conducted in close consultation with other U.S. agencies and international groups in an effort to strengthen the knowledge and understanding of this growing economic and financial stability issue. The Federal Reserve is evaluating and investing in ways to deepen its understanding of the full scope of implications of climate change for markets, financial exposures, and interconnections between markets and financial institutions. It will monitor and assess the financial system for vulnerabilities related to climate change through its financial stability framework. Moreover, Federal Reserve supervisors expect banks to have systems in place that appropriately identify, measure, control, and monitor all of their material risks, which for many banks are likely to extend to climate risks.”
Biden does plan to increase taxes on those earning $500,000, but that’s unlikely to make a significant difference to the huge and growing pile of debt. This will likely devalue the dollar.
For everyone else, there’s cryptocurrency, mainly Bitcoin. Bitcoin is arguably the best hedge against significant devaluation – after all, it’s coded to be capped at 21 million.
The effects of this fixed limit on devaluation can be seen in Brazil, Argentina, Iran, and other places. Bitcoin has reached an all time high in terms of use and value in those countries.
It’s likely that we will see the same effect upon the dollar and euro if central bankers continue to devalue their own currencies by printing and buying their own debt with aforementioned currency. Bitcoin, as we’ve seen all year long, will naturally be looked upon as an investable savings and as a hedge against devaluation.
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