If you haven’t been badly harmed by rising inflation yet, consider yourself lucky. But make no mistake, inflation will impact you. And for many Americans it could eat significantly into their incomes, lessen their ability to save, and erode the value of their investments.
President Biden, unfortunately, is trying to place the blame everywhere but where it belongs, with the Federal Reserve System. He could very well blame the Fed for more than doubling the size of its balance sheet, adding nearly $5 trillion worth of new money to the financial system. He could blame President Trump’s Treasury for embarking on massive stimulus spending to combat COVID lockdowns. But if he were to do so, he would implicate his own continuation of those policies for contributing to rising inflation.
Instead, Biden is going the route traveled by numerous regimes throughout history, blaming rising prices on greedy businessmen. And as a result, Biden is ignoring the monetary roots of inflation and will instead initiate antitrust action against large companies in order to deflect blame away from the Fed.
Biden’s Allies Aren’t on Board
Even Democrats who should be natural Biden allies, like former Treasury Secretary Larry Summers, are warning that Biden’s actions will be counterproductive, and could actually lead to higher prices. That’s because taking action against large companies under the guise of antitrust enforcement will likely lead to reduced output, thus causing shortages that will further boost prices.
This isn’t the first time Biden has come in for criticism from people who should be his natural allies. But in all likelihood Biden won’t listen to the criticism. No President will criticize the Fed too severely, because doing so would undermine his own authority.
The likely result, then, will be that antitrust actions will go ahead. And they’re going to take place in the industries whose prices are already affecting your pocketbook.
Which Industries Could Be Affected?
Biden has made much of the fact that over 80% of the meat industry is controlled by just four large companies. But antitrust action isn’t going to bring down prices. With rising prices coming as a result of excess money creation, the prices of feed for cattle, fuel to transport them, and other input factors are rising as well. Throw in periodic plant shutdowns due to worker sickness and you have a recipe for significant price volatility.
The fossil fuel industry is another area in which the Biden administration is thinking about throwing around its antitrust power, in a bid to lower the prices that Americans are paying at the tank. Yet Biden’s policies toward oil and gas production have thus far had the effect of boosting prices even if inflation weren’t already a problem.
One of the first things Biden did after taking office was rescind permission for the Keystone XL pipeline to be constructed. That alone significantly reduced the amount of oil coming into this country. And the administration could shut down even more pipelines around the country, which could cause oil and gas prices to surge.
In response to political developments in Europe, Biden is encouraging exports of natural gas to Europe to help bring prices down there. But that of course reduces supply and raises prices here. No matter which way you slice it, Biden’s policies are calculated to please environmentalists among the Democratic Party’s base, not average Americans who want to see lower energy prices.
Antitrust actions against gasoline producers and oil giants could have similar effects to taking on the meat industry. Expect to see lower production and higher prices at the pump. And expect the administration to try to deflect blame away from its actions and blame various other bogeymen.
In short, don’t expect the Biden administration to actually do anything that will combat inflation or make the inflation situation any better. And don’t expect Biden to take on the Fed either. After all, if the economy slows down next year like many people expect, he may very well lean on the Fed to restart its printing presses to try to restimulate the economy.
Protect Yourself Against Inflation
Knowing that the administration’s efforts to combat inflation are little more than lip service puts you ahead of the game, ahead of those who actually think that Biden could do something that would lessen inflation or its impact. That buys you time to protect yourself, your assets, and your way of life from the effects of rising inflation.
One time-honored way of doing that is by buying gold and silver. Over the centuries, millions of people have trusted gold and silver to protect their savings. When paper money starts losing its value, people flock to the safety and stability of precious metals.
That was the case during 19th century financial panics, during the 1920s Weimar hyperinflation, and remains the case today. And an increasing number of people are turning to gold and silver to protect their savings and investments right now.
Gold and silver can even play a role in protecting your retirement savings, through a precious metals IRA. A gold IRA or silver IRA can allow you to invest in physical gold or silver coins or bars while still giving you the same tax advantages as a conventional IRA account. And you can even roll over or transfer assets from an existing 401(k), IRA, 403(b), TSP or similar retirement account into a precious metals IRA tax-free.
If you have cash or cash equivalent holdings such as bank savings accounts or money market funds, you can protect those assets through direct purchases of gold or silver coins. Remember that cash holdings lose value to inflation every year, and the higher inflation gets, the more purchasing power you lose.
Contrast that with gold and silver, which made average annualized gains of over 30% throughout the 1970s. Or look at their performance in the aftermath of the 2008 financial crisis, when gold nearly tripled in price while silver more than quintupled.
Gold and silver have a strong track record of protecting wealth during times of economic turmoil and rising inflation. And now is your chance to put them to work for you.
Don’t let your hard-earned savings fall victim to rising inflation. Call the precious metals experts at Goldco today to learn more about how you can benefit from gold and silver.