Peter Schiff: Fake Economic Growth And Stealthy Government Default

https://www.nationandstate.com/2021/08/03/peter-schiff-fake-economic-growth-and-stealthy-government-default/
Peter Schiff: Fake Economic Growth And Stealthy Government Default Via SchiffGold.com, Inflation continues to run rampant and it’s distorting the entire economy. In a recent podcast, Peter Schiff explains how rising prices create the illusion of economic growth. And they are also allowing the US government to stealthily default on its massive debt. This is […]

Living with high inflation and zero interest rate.

Living with high inflation and zero interest rate

by tonytran2015 (Melbourne, Australia).

Click here for a full, up to date ORIGINAL ARTICLE and to help fighting the stealing of readers’ traffic.

(Blog No. 3xx).

#inflation, #zero interest,

Citizens of Western countries are used to real money like gold, silver or stable fiat moneys. They became so much confused when their fiat moneys became no more stable while their inflation evolved into hyperinflation. They were further fooled by their entrusted leaders that their fiat moneys would some day regain their stability.

Citizens from developing countries have been more familiar with high inflation from their former homelands and are thus more adaptable in facing again with such type of situations. Their experience should be quite appropriate to the current situation.

This blog shows how to live with high inflation as well as zero-interest rate based on the experience of people who had lived under communist regimes.

1. Do NOT mistake fiat money for real money.



This is the most important rule in living with high or hyper inflation.

1a. Fiat money should be thought of as EXPIRABLE certificates to receive goods and services at government depots or stores.

1b. The holders of fiat moneys should arrange with their workmates to send one representative to the stores with a combined shopping lists to buy goods for the whole group right after receiving their salaries. Late buyers may lose his chance of buying goods for the period and may need to buy on the black market at much higher price.

1c. Fuels should be stocked up for use until next pay period.

1d. There will be black markets. Do not complain on their high prices. Black market operators also have their living expenses and have to pay for their operations.  Black markets are not inherently criminal, they are only the mechanism to deal with scarcity arising in main markets. Black markets complement main markets to  supply scarce goods.

2. Be prepared for  scarcity of goods and

their higher prices.

2a. Since the universal medium for exchange such as gold coins no longer exist, double coincidence exchanged are required (A happens to need to change some food into a hammer, B happens need to change a hammer into food, A meets B). The exchange of goods is thus slower and is less often. Wholesaling is almost disbanded and each person is his own buyer and retailer.

2b. Goods are so scarce that there would be no opportunity for mass production and transaction. Therefore costs per item have to increase.

3. Be ready to participate in black markets. Engage in bartering.


As black markets complement the now infrequent, sporadic main markets, citizens should not have any conscientious objections to black markets.

People who are fortunate to have goods in high demand should try their best to exchange them for the most amount of goods for regular consumption or for some high value productive goods.

Bartering is a good way to swap goods without using the annoying depreciating fiat money.

4. Have a clear distinction between productive, consumption and luxury goods.


In hard time, it is essential to distinguish between many types of goods. The main types are:

4a. Long Lasting Productive goods, such as home repair tools, wood working tools, a fishing net, a cooking device, which bring in good stream of incomes when you lend or hire them out. Income can be either in goods or in depreciating fiat money.

4b. Productive goods or stocks which require regular material and labour input and maintenance like hen cages, egg laying hens, milk cows, electric generators, trucks,…

4b. Expense saving goods such as a cooking tool, a sewing kit or a sewing machine which reduce your living expenses (by providing low cost meals, by supplying,  mending your clothes).

4c. Long lasting consumption goods such as rice grains, sugar, salt, alcohol, vinegar, firewood, charcoal, fuel, dress fabrics. They can be stored for few years, swapped for other goods, until finally consumed.



4d. Highly exchangeable goods such as eggs, fruits, seeds, dried foods, preserved foods, medication (both pharmaceutical and traditional), which can be used as a form of real money and can be quickly changed into fiat money when it is time to pay taxes or passport fees, emigration fees, bribes (This is the concept of liquidity.).

4e. Very high value, compact  goods such as gold that can be secretly kept but can also be quickly turned into any other types of goods in an emergency (This is the concept of reserved liquidity).




4f. Highly productive but immobile goods such as houses, shops which bring in high incomes but cannot be readily moved.

4g. Luxury goods such as perfume, designer clothing which are good at impressing acquaintance but rarely can be swapped back to other goods at reasonable rate. Luxury goods are really only for the very top people in such a situation.

As all main and black markets are at slow pace, it is really costly to reverse any unsuitable acquisition. People have to be very careful in their acquisition of goods. The slowness of trade feeds on itself.

5. Be wise in acquiring, owning goods.


People should acquire only productive goods and avoid luxury goods.

Eastern Europeans and people living in Europe during the depression of 1938 do have valuable experience to pass on. We need to learn more from them.

Only the most productive goods should be kept, non-productive goods should be swapped/sold for more productive goods or for fiat money to pay taxes and charges.

Immobile goods such as houses, shops should be swapped for other types of goods if there is a risk of wars or forced migration.

6. Give no loan, demand immediate payment after any work.


Any of your borrowers may go bankrupt any time. You should not take the risk of leaving your earnings with them.

Any big work must be finely divided into many small contracts to be finalized upon seperate completion. In this way, any loss will be smaller than the income of one day.


7. Living with zero interest rate.

Zero interest is the message from the government that savings will not give owners any benefit when kept in banks, public companies. The message also imply that everyone should try his best to obtain low interest loans from government whenever they are available.

Savings left in banks are paid an interest rate linked to the official zero interest rate.

Their real earning is equal to
“Nominal interest rate” Minus “Tax on interest earning” Minus “Actual inflation rate”.

So the real earning is usually a negative number meaning the savings are quickly losing their values.

Public companies are for the welfare of their management class rather than the benefit of shareholders. Returns from owning shares in public companies will only be slightly better than returns from bank savings.

Superannuation and pension funds have their incomes derived mostly from bank interests and dividends from shares in exchange traded public companies. They will  earn little or even have loss.



The implication is: Do NOT leave your money in banks. Do NOT leave your money/entitlement in superannuation or pension funds.


The government may to try to save its reputation by injecting printed money (under fancy names such Quantitative Easing) into over-reaching banks, Stock Markets to keep superannuation/pension funds temporarily solvent but such a situation is unsustainable and the economy may collapse suddenly bringing with it over-reaching banks, companies and their investing superannuation funds.



Try your best to obtain any available government loans, grants to buy productive goods to set up your life. The repayments will vanish very quickly due to the combined effect of zero interest rate and high inflation.

8. Do not fall for any pyramid scheme.


During hard times, pyramid (Ponzi) schemes often pop up (https://survivaltricks.wordpress.com/2021/07/30/as-incomes-fall-russians-are-once-again-falling-for-pyramid-schemes-ukraine-today-org/).

Do not trust promoters, set up your own small, controllable family business/enterprise instead.

References:

1]. Your fiat money (Part 2), posted January 12, 2017.

[2]. Your fiat money, posted January 9, 2017.

[3]. Why does the Federal Reserve aim for 2 percent inflation over time?, Board of Governors of the Federal Reserve System,https://www.federalreserve.gov/faqs/economy_14400.htm, updated January 26, 2015, accessed 03 Mar 2017.
[4]. Neha Sharma and Shalu Yadav, The Indian village that has returned to bartering, BBC News Services,http://www.bbc.com/news/world-asia-india-38180075, 5 December 2016.

[5]. Patrick Bodenham, Will Spain’s coal belt survive through online barter?, BBC News Services,http://www.bbc.com/news/world-europe-38731808, 2 February 2017.

[6]. James Melik, Haggling and bartering gain appeal, BBC News Services,http://news.bbc.co.uk/2/hi/business/7883050.stm, 12 February 2009.

[7]. Mark Lowen, Greece bartering system popular in Volos, BBC News Services,http://www.bbc.com/news/world-europe-17680904, 12 April 2012.

[8]. Dallas police fire pension board ends run, bank stops 154m withdrawals. http://www.dallasnews.com/news/dallas-city-hall/2016/12/08/dallas-police-fire-pension-board-ends-run-bank-stops-154m-withdrawals
[9]. Joseph Goebbels quotes, azquotes.com, http://www.azquotes.com/author/5626-Joseph_Goebbels.
[10]. https://www.moneymetals.com/news/2017/05/04/higher-inflation-consumer-prices-001061, (added on 10 May 2017).
[11]. http://www.zerohedge.com/news/2017-05-13/arizona-passes-bill-end-income-taxation-gold-and-silver

[12]. http://www.gold-eagle.com/article/deepening-crisis-hyper-inflationary-venezuela-and-zimbabwe
[13]. https://us-issues.com/2017/11/21/social-security-inflation-lag-calendar-partial-indexing/

[14]. http://www.silver-phoenix500.com/article/fed%E2%80%99s-%E2%80%9Cfrankenstein%E2%80%9D-policies-are-about-turn-their-master

[15]. https://mises.org/wire/dollar-dilemma-where-here

[16]. https://straightlinelogic.com/2018/08/04/how-inflation-destroys-civilization-by-nick-giambruno/

[17]. https://www.silver-phoenix500.com/article/anatomy-hyperinflation

[18]. https://us-issues.com/2018/08/19/anatomy-of-hyperinflation/

[19]. https://akahinews.com/2018/07/29/venezuelas-bolivar-currency-worthless-as-inflation-hits-1-million-percent/

[20]. https://dailyarchives.org/index.php/history/1046-ben-bernanke-says-hitler-was-the-guy-who-got-economics-right-in-the-1930s

[21]. https://yapaholic.com/2018/08/19/us-national-debt-heres-what-you-need-to-know/

[22]. https://www.caseyresearch.com/how-inflation-destroys-civilization/

[23]. How Venezuela’s crisis developed and drove out millions of people, https://www.bbc.com/news/world-latin-america-36319877



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Inflation Ate Their Lunch: Consumer Income & Spending amid Red-Hot Inflation | Wolf Street

https://wolfstreet.com/2021/07/30/inflation-ate-their-lunch-consumer-income-spending-amid-red-hot-inflation/
Without government transfer payments, such as stimulus & unemployment, “real” personal income was below where it had been in February 2020...

Biden Admin Targets New Homeowner Aid That Could Reduce Mortgage Payments By Up To 25%

Comment by tonytran2015: This is a blatant a communist show. If the government worries about renters not being able to pay rents why doesn’t it directly pay rents for them? If the government worries about buyers not being able to pay installments why doesn’t it directly pay installmentts for them?

https://www.nationandstate.com/2021/07/29/biden-admin-targets-new-homeowner-aid-that-could-reduce-mortgage-payments-by-up-to-25/

As if the ongoing moratorium on evictions (which shows literally zero signs of ever going away) wasn’t enough government “relief” for those suffering , the Biden administration is now going to be implementing a policy to reduce monthly payments by up to 25% for borrowers

Let’s Compare The U.S. Economy Before The Pandemic To The U.S. Economy Today — The Economic Collapse | Truth2Freedom’s Blog

https://truth4freedom.wordpress.com/2021/07/27/lets-compare-the-u-s-economy-before-the-pandemic-to-the-u-s-economy-today-the-economic-collapse/

… Our leaders created, borrowed and spent trillions upon trillions of dollars in a desperate attempt to get our economy back on track, and it turns out that all of that money didn’t really have the enormous impact that they had hoped. On the other hand, inflation is now beginning to spiral out of control, and many are comparing this time in our history to the Jimmy Carter era of the 1970s.

In this article, I would like to compare the state of the economy today to the state of the economy just before the pandemic started sweeping across the country.

As you will see, it appears that a tremendous amount of long-term damage has been done…

$4.6bn in JobKeeper went to businesses that increased their turnover at the height of the COVID-19 pandemic – ABC News

https://www.abc.net.au/news/2021-07-22/4-6bn-in-jobkeeper-went-to-businesses-increased-turnover/100316010

  • Business and charities were eligible for JobKeeper if their turnover fell to certain levels, or was predicted to
  • Of
    the businesses and charities that got JobKeeper from April to June last
    year, 365,477 had a turnover that did not drop below threshold levels
  • 157,650 JobKeeper employers had turnover rise during that period, compared to the same time in 2019.

Top Tips For Saving Money As A Student ⋆ simple Ula

https://simpleula.com/2021/07/21/top-tips-for-saving-money-as-a-student/

Many people mistakenly believe that being a student entails very little responsibility other than being successful academically.

What they do not realize is that one of the main concerns and struggles of students, particularly those who are financially insecure, is how to save money efficiently. After all, everyone wants to learn how not to have student debt when they leave college or university and go out into the real world….

This “Temporary” Inflation Is Turning into an Inflation Spiral, by Wolf Richter | STRAIGHT LINE LOGIC

Comment by tonytran2015: Inflation of fiat money is a stealthy way of taxing people. All fiat money issuers are tempted to enjoy their power of taxation by stealth and cannot resist it (, The lesser-known costs of inflation).

https://straightlinelogic.com/2021/07/15/this-temporary-inflation-is-turning-into-an-inflation-spiral-by-wolf-richter/

The inflation won’t be temporary because the fiat debt creation that’s fueling it hasn’t been. From Wolf Richter at wolfstreet.com:

Get Used to Higher Inflation. My Thoughts on the Biggest Mess I’ve Seen in Decades.

his year, inflation blasted off with a vengeance, and the last four months have seen the hottest pace of inflation since the 1980s.

The consumer price index – the CPI – rose 5% year-over-year for May. The June reading will come out in a couple of days [update: June CPI came in at 5.4%]. 5% of annual inflation is bad enough. But the pace of inflation over the past four months has been much higher, clocking in at over 8% annualized.

Surely, some inflation measures will tick down in the near future, giving everyone false hopes, before rising again. The first bout of inflation always looks temporary. But during those first bouts of inflation, that’s when the triggers of “persistent” inflation – namely the inflationary mindset and inflation expectations – are being unleashed.

So now the Fed keeps repeating time after time that this is temporary and that it will go away on its own because it was caused by temporary factors, namely a demand shock that occurred because the government spread $5 trillion in borrowed stimulus money since March last year; and because the Fed printed $4 trillion over the same period and repressed interest rates to 0%.

Continue reading→

Why wouldn’t 82% of Survey Respondents blame Buyers from China for our High House Prices?| COMMUNITY ACTION ALLIANCE FOR NSW (CAAN): HOUSING INEQUALITY WITH AUSSIES LOCKED OUT!

https://caanhousinginequalitywithaussieslockedout.com/2021/07/08/why-wouldnt-82-of-survey-respondents-blame-buyers-from-china-for-our-high-house-prices/

APART from the very low interest rates, the Morrison Government First Home Buyer and Home Builder Grants, and the short supply of housing, Australians have witnessed the high immigration from China, and many have been outbid at auctions …

WITH more than 80% of Australians knowing that foreign buyers particularly from China have driven up house prices … does ‘the Truth hurt’? Namely, those who benefit most?

We suggest the survey and data Naaman Zhou is basing his report:

‘More than 80% of Australians mistakenly believe Chinese investors are driving up house prices’

is now out of date!

Because Monika Tu, founder and director of Black Diamondz Property whose clients are mainly Chinese citizens with Australian residency working and living abroad predicts that when the borders open they will flood back in … some are seeking $10M plus homes, but will they be seeking our detached homes with large land lots in green suburbs too? Hm … .

Not only will they continue to come from China but Singapore, Hong Kong, the United States (Canada too?) and the United Kingdom. 27 of the 29 Sydney properties listed by Black Diamondz sold recently.

Once again the ‘exchange rate’ is in their favour! With Australian housing more reasonably priced than Japan, London, New York, Beijing and Shanghai!

These $20 – $30M buyers having made their offers are holding off to exchange when they can return to see the property.

The pattern is repeated in Melbourne’s eastern suburb of Box Hill, where sales and marketing director, CBD Development, Ricky Chen is seeing enquiries pick up again for a mixed-use high-rise development with hotels and retail space.

They are seeking larger apartments to live in, to retire in Australia or to send their children to study.

Martin North, principal of property research firm Digital Finance Analytics, also notes ‘there’s been a swing away from foreigners looking to invest to people wanting to move here.’ And that they are more interested in buying land and larger properties!

Read more!

https://www.abc.net.au/news/2021-07-02/chinese-overseas-buyers-australia-property-housing-investors/100259470

Have our politicians including Premier Berejiklian been promoting our success in fighting Covid-19, and our beautiful country to entice foreign investment with its many added benefits of a Permanent Resident Visa following purchase?

Many Chinese have previously purchased an apartment as a ‘new home’ through which purchase they gained a ‘Permanent Resident Visa’, and this Visa has allowed them to buy our established housing. Which explains how they can overcome the FIRB restriction of only being able to buy a ‘new home’!

They can ‘lay-buy’ these homes through Juwai until the borders open, and fly in as ‘Permanent Residents’

OBVIOUSLY these overseas buyers have led to even more competition for our housing, and further reducing the supply!

The property industry, and the Law Council backed by the Morrison Government exemption for the Real Estate Gatekeepers to the second tranche of the Anti-Money Laundering Laws in October 2018 has meant ‘black money’ continues to be awash in our real estate.

Many properties, we have learnt, do not reach the real estate websites, but are sold online to these overseas buyers sight unseen!

It is not only First Home Buyers but all Australian Buyers have been impacted as prices escalate daily!

CONTRARY to Eliza Owen from CoreLogic, and Elena Collinson these reports reveal the return of Chinese property buyers to our housing market:

From the ABC The Business: ‘Chinese Property Buyers Return’ as recently as 1 July 2021.

And ‘US Buyers lead a 15.5% surge in Foreign Investment in Aussie Houses’

‘ … trailed by Singapore with $9.5 billion and mainland China in third place with $7.1 billion. However, China’s overall value rose to just shy of Singapore’s when combined with that of Hong Kong.’

And ‘Cashed-up Chinese Buyers swarm Australia’s Housing Market with their sights set on major East Coast suburbs’!

‘Interest in real estate from China has skyrocketed by 51 per cent over the past year, according to a study by Chinese investment website Juwai – identifying Melbourne as the best market for buyers.’

In Australia previously we have lost many of our Heritage Homes because wealthy foreign buyers bought them while on a temporary visa to then demolish them for a ‘new home’, and gain a PR Visa.

They are able to increase Australia’s housing stock by adding a granny flat, and enticing family members through a number of other visas e.g. Family, Guardian, Parent, Grandparent …

AUSTRALIANS, it appears, are aware now of what has been happening having witnessed enormous development in their midst along with a huge influx of Visa holders particularly from China. Their concerns have been confirmed not only by these changes, but Geopolitical Strategist David Lee confirms why:

‘If you get on the hill, and you film down into Chatswood – it’s like this city in the middle of nowhere called Chatswood … it is just northwest of the Sydney CBD.

It is being built by the Chinese Communist Party.

All the money has come from China. It’s not from Hong Kong people … they speak Mandarin (in Chatswood; previously it was Cantonese)

A lot of money comes into Chatswood, and it’s effectively the Shenzhen/Hong Kong to Sydney CBD of Australia.

This is the most wealthiest couple of kilometres in the entire of Australia! … This city has happened out of nowhere … massive high-rises … it looks like Hong Kong … it’s a city being built ostensibly with China’s money … ‘

Read more!

A GEOPOLITICAL STRATEGIST ON THE MK, HONG KONG, THE U.S. and AUSTRALIA …

It is indeed surprising that as much as 33% of those surveyed would believe that Chinese investment in our real estate market would benefit Australians when 100% of the dwellings in these precincts are sold to Chinese buyers and are constructed by largely overseas workers particularly from China!

It is surprising that as much as 33% of those surveyed would believe that Chinese investment in our real estate market would benefit Australians when 100% of the dwellings in these precincts are sold to Chinese buyers and are constructed by largely overseas workers particularly from China.

Delta Could Disrupt Emerging World’s Post-COVID Recovery, Goldman Warns

https://www.nationandstate.com/2021/07/08/delta-could-disrupt-emerging-worlds-post-covid-recovery-goldman-warns/
Now that the Delta variant has revived fears about renewed COVID outbreaks from the US to Europe to Asia, a team of analysts at Goldman Sachs has published its analysis of the risks posed by the mutated strain. The conclusion: since full vaccination remains effective at […]