Donald Trump wants the Federal Reserve to pay our bills.

On October 13th he tweeted that he wanted stimulus and on October 21st he tweeted that Biden would raise our taxes if he won the election.[1][2]

Stimulus payments without an increase in taxation means that the Federal Reserve will be used as the lender of last resort, since they have the power to create dollars, (Federal Reserve Notes).

The Federal Reserve owns $4.5 trillion of US government debt (future taxes), after not even owning $1 trillion from 1913-2008, and only owning $2.1 trillion in September 2019.

The Federal Reserve owns a total of $7.2 trillion assets.

No wonder that International Monetary Fund Managing Director, Kristalina Georgieva, wrote on October 15th,

“Today we face a new Bretton Woods ‘moment.’”[3]

Bretton Woods was the 1944 agreement between the victorious powers of WWII to use the US gold backed dollar to replace the British Pound Sterling as the world’s reserve currency because the British had destroyed their economy with war, regulations, debt, and inflation.

Bretton Woods lasted until Nixon defaulted on gold payments in 1971 because the US had destroyed their economy with war, regulations, debt, and inflation.

The paper dollar still remains the world’s reserve currency. This has allowed the US government to afford the stimulus payments and the historic debt of $27 trillion.

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” -Former Federal Reserve Chairman Alan Greenspan, Meet the Press, August 7, 2011.

“We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power.” -Fed Chairman Alan Greenspan, US Senate Committee on Banking, Housing and Urban Affairs, Feb 16, 2005.

“Gold is a currency. It is still by all evidences the premier currency where no fiat currency, including the dollar, can match it.” - Alan Greenspan, in an interview for the Council on Foreign Relations, Nov 2014

What’s in your wallet?

“But then finally the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against ‘real’ goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.” -Ludwig von Mises, Human Action (1949), page 428.

[1]https://mobile.twitter.com/realdonaldtrump/status/1316031426618327040?lang=en

[2]https://mobile.twitter.com/realDonaldTrump/status/1318898380421083137

[3]https://www.imf.org/en/News/Articles/2020/10/15/sp101520-a-new-bretton-woods-moment