2020 $10+ Trillion Hyperinflation Stimulus Package - Perspective View
$10.5 Trillion is over 30% of U.S. GDP and more than twice the U.S. government yearly budget.
$10 Trillion is more than twice USD M1 money supply (cash & bank account deposits @ $4 Trillion @ end of 2020).
$10 Trillion is $30,500 for each person in the USA. Did you get your share? We know corps & banks will get theirs.
Question: What is the end game?
Answer: First deflation (quarantine lock-down), then hyperinflation.
Why hyperinflation? Because the interest rate is the value of money itself, and is set to zero. Interest rate is the opportunity cost of lending the money- risking not getting money back and deferring current spending power until later. Money is the most capitalistic thing in existence, but paradoxically the value of money is centrally controlled by the central banks of the world; not controlled by the free market. You may not decide what value (interest) money in your bank acct carries; the central banks decide.
The interest rates are now set to ZERO. In many countries. This implies that the value of money is ZERO, meaning there is no risk or deferred opportunity cost when lending out money. Some countries even have NEGATIVE interest rates, something that was considered fringe conspiracy theory just 10 years ago is now the new normal.
The USA can't ever go back to normal interest rates. US Debt is at $25+ Trillion as of May 2020. [me: It's 29 trillion now]
With normal interest rate of 5% the US Government debt service cost would be $1.25 Trillion per year. Tax revenue is at $3.5 Trillion. When one pays 35% of one's yearly revenue to service debt interest, everyone knows one is bankrupt. With 0% interest rates this can go on for much longer. This is one of many reasons for low rates.
There are two ways to default on government debt. First option is to tell creditors they get nothing, which is a painful process with many repercussions. Another option is to just print cash and give creditors newly created devalued cash. Problem is that the financially responsible hard-working savers are punished as their savings fall in purchasing power, while in-debted spenders are highly rewarded as their debts devalue.