One of the common complaints we hear about American society today is that nobody wants to work hard for anything. Everyone wants to be able to get a six-figure job without having to have any talent or ability, and wants to be able to make lots of money without having to put in any work. People play the lottery to try to get rich quick, spending thousands of dollars in the hope of making it onto easy street. Young people today want to make money by becoming famous through viral videos, hoping to get rich by becoming YouTube stars. It’s enough to make anyone shake their head.
That something for nothing mindset extends to politicians and academics too. Politicians promise the universe if we’ll just vote for them. All they need is a little more power or a little more money and they can bring us heaven on earth. And there are hundreds of “experts” all too willing to provide the intellectual justifications for those promises.
A perfect example of that is Modern Monetary Theory (MMT), which has been brought into the public eye through the publicity surrounding the Green New Deal. The Green New Deal has been derided as being a pie in the sky wish list of everything progressive politicians want: job guarantees for everyone, moving to 100% renewable energy, universal healthcare, etc. And the cost? An estimated $51-93 trillion over the next decade.
The Green New Deal’s proponents don’t bat an eye at that figure, relying on MMT to tell them that massive deficit spending is perfectly alright. Yet we all know better than that. We know that if the government were to actually try to spend that kind of money implementing the Green New Deal it would completely destroy the value of the dollar through inflation. Rather than achieving the paradise Green New Dealers think they can deliver, the country would descend into an inflationary hell of ever-rising prices, falling wages, and a lower standard of living.
Investors should be worried about the growing popularity of politicians who expound economic theories of this sort. If you think the Federal Reserve is bad enough now, having devalued the dollar over 96% since its inception, just wait until MMTers get control of the printing presses.
That’s why all investors who want to maintain the value of their assets need to protect them by investing in gold. No matter how bad inflation gets, gold will always maintain its purchasing power. It can’t be printed or created out of thin air like fiat government currencies can. And when governments hyperinflate their currencies until they’re worth nothing, those who hold gold will still have something.