My wife and I spend some time each winter in southwest Florida. Recently she asked if I would drive her up to the new Costco store in Sarasota. I agreed if we could stop at the antique show in Venice. As we crossed the causeway from Gasparilla Island to the mainland the overpowering smell of dead fish wafted into the car. Red Tide had swept down our coast killing thousands of fish. As we drove through Cape Haze, buzzards by the thousands filled the air and sat in clusters along the road fattening on the rotting fish. Red Tide makes you cough and plugs your sinuses. Apparently it is caused by agricultural runoff into the ocean. Hopefully the smell would abate as we drove north.
A quick trip through the antique show found nothing worthwhile and we were back in the car heading for the new Costco. “Aren’t you excited?” queried my wife. I couldn’t affirm that I was. The new store was on the south side of Sarasota in a big mall. Soon we were filling our cart with groceries and other economy size necessities. We had my wife’s relatives coming so we needed to stock up. The bill was $699. “And there is no inflation,” I said to the cashier.
As we pushed two carts out to the car my wife asked if I enjoyed Costco. I told her I wasn’t too happy about spending $700 bucks in a store where one of the founders was a big political fundraiser for the left. I won’t go into a Starbucks if I can help it because the founder is also a big lefty. I like to boycott liberal stuff, especially movies.
Nevertheless, I was impressed with Costco. The store carries an unfathomable variety of first class merchandise. Such a rich bounty set me to thinking: Here am I preaching gloom and doom in my newsletter and the stores are overflowing with goods that could only be available in a rich and successful country. What’s to worry say the progressives, things will be fine. The thought made me uneasy. What if I’m wrong? As we drove back to the island I was checking my premises.
One of the reasons we have so much in America is because for years the dollar was as good as gold. The rest of the world wanted our dollars and we could print enough to buy whatever we needed from around the world. A lot of the produce, sea foods and manufactured goods wouldn’t be at Costco if it wasn’t for the high standing of the dollar. Now we are monetizing our debt by blatant money creation. The more dollars we print the less will be their value. It has to catch up with us. The goods won’t disappear from Costco but they are likely to get so expensive most people can’t afford them. Inflation reduces living standards. The end of the dollar as the world’s reserve currency would throw a monkey wrench into American prosperity.
I suspect we are going to have hyperinflation. Runaway inflation doesn’t last long. Wealth gets reshuffled and a lot of people lose their money. People with tangible assets can survive and even do well. Foreign currencies, hard assets and money with gold backing replace the dying dollar. That’s the way it went in Weimar Germany. It would be painful but not terminal for those who prepared for it.
Too terrible to contemplate is the fate of half our population that’s on the dole. If the dollar doesn’t buy anything what happens to them? What kind of threat do they represent to the rest of us? No country has ever subsidized so many and no country has ever suffered hyperinflation because of it. This is a mess of our own making and the outcome will fill the pages of history. Get ready for national convulsions.
When my wife and I returned to our island the wind had come up from the east and was blowing hard into the Gulf. In a day the red tide would blow out to sea and the fish kill would end. The stench would vanish. Sad to say the intractable financial and economic problems facing America will not disappear with such swiftness. First we will have a worsening of the current crisis that leads to runaway inflation, then the inflation itself followed by depression. Costco won’t be gone but they may be looted.
The negative history of fiat money, the teachings of classical economics, the miserable record of interventionism all go to support my conclusions. My 1998 novel Full Faith and Credit accurately predicted the following ten years. Please think deeply and carefully about my argument and if you agree at all then take a measure of preparedness.