And it begins.
Yesterday we talked about the real threat of war… especially wars on multiple fronts. Now we have confirmation that it’s happening.
The US just committed troops to the Middle East. And US Treasury Secretary Janet Yellen publicly stated that she believes the US can afford to aid the war efforts in both the Ukraine and Israel. By the way, I pulled back the curtain on Yellen’s motivations and her allegiances in my new book Beyond the Nest Egg.
As we discussed yesterday, governments can only finance wars by printing money.
Technically, that means Yellen is right. The US can afford to support both war efforts. They can just create new dollars out of thin air to do so. But this is going to further erode the dollar’s purchasing power… which will drive our cost of living higher and higher.
So ultimately it’s the average person who must pay for these wars. But we don’t pay for them directly. Inflation is a stealth tax that steals our purchasing power away from us.
This chart tells the story perfectly:
Continue reading “War and the middle class”