As many of you know I spoke this weekend in Miami for the Rebel Capitalist event hosted by George Gammon. When deciding what to speak about I took into account George’s saying of “End the Fed.” Sure, that would be great, but it’s not going to happen anytime soon. However, what if instead of ending the Fed, we act like the Fed. We use the same principles they use in our own lives, so when they get bailed out we get bailed out. It sounds perplexing, but I am going to break it down for you.
The Fed keeps printing American Dollars and while we all wish we could do that ourselves, we obviously can not. However, think deeper. What does printing American Dollars do? In this kind of economy it inflates the currency. We keep seeing all of these “temporary” price increases, but let’s be honest with ourselves prices aren’t going all the way back down to where they were prepandemic anytime soon and maybe not ever.
So what does this have to do with you? Well the Fed is getting America deeper into debt and they’re printing money. What’s their exit plan for the debt? Inflation of course. It is beneficial for the government to have inflation. It is going to help them inflate their debt away. Debt during a time of inflation is good for you as well. As they inflate their debt away, it will inflate yours away too.
Now I am not talking about any debt. I am talking about fixed mortgage debt on a cash flowing asset. This is because as inflation goes up then rent goes up, but as long as it’s fixed the payment will stay the same. So stop freaking out that the government is printing more money and start making inflation work for you.