Max and Stacey talk about the latest financial absurdity as it relates to mounting debt in the U.S. From the $1 trillion dollar coin to rampant inflation, their observations are never dull.
In the face of too much money printing or inflation, Max Keiser believes each successive Fed Chair going back 30 years has failed in their duty.
“Since they never raised rates, what they did was, they transferred trillions of dollars to a few oligarchs in America, and they took the entire country, and they threw it under the bus.”
Inflation Shows No Signs of Slowing
Inflation in the U.S. is running near a 13-year high. Canada is faring even worse, with inflation at its highest levels since 2003. The loss of purchasing power is squeezing those with no assets as the cost of living increases.
U.S. Annual Inflation Rate Hit 5.3% in August
Gold Bugs vs. Bitcoin
The second half of the Keiser Report focuses on the debate between gold bugs and Bitcoin.
Bitcoin is back in the news as the price per digital coin has skyrocketed in recent weeks.
Billy Bambrough, senior contributor at Forbes reports that,
“The surge higher comes after some of the world’s biggest banks renewed their bullish bitcoin and crypto calls, led by Wall Street giant Bank of America BAC +0.9% , which said bitcoin and crypto have now become “too large to ignore.”
Max is quick to note that,
“Recently, Morgan Stanley pointed out that Bitcoin has replaced gold.”
Max puts that statement to Lawrence Lepard, who responds with,
“Bitcoin is a really sound form of money, and it’s a digital form of gold, in my opinion. I call Bitcoin digital gold. It’s limited in supply. It’s actually deflationary. You know, the supply of gold will double in the next 40 years. It grows at about 1.7% a year, and so Bitcoin as we all know, the supply is fixed or approaching a fixed number.”
However, he doesn’t think Bitcoin will replace gold and explains his reasons why.
Crimes Against Economics and Capitalism
Lepard explains that,
“Zero interest rate policy is really a crime against economics and capitalism.”
“Money is supposed to have value right, and time has value. And so, the notion is when you have money, you would get paid interest by loaning it out over time, but if the interest rate is zero… by definition, the money has no value.
“And in turn, it implies that everything that earns money, every business that’s profitable… has an infinite value.”
Finally, Lepard concludes,
“When you give free capital to people and allow them to buy yielding assets, guess what – they end up rich.”
Keiser talks about a lack of savings and easy credit. And about the mentality in Washington that ‘debt doesn’t matter.’ Lepard summarizes why Keynesianism is wrong and where we might be heading.