Fighting COVID with Monopoly Money

The House and Senate have both passed their versions of the economic stimulus package. Joe Biden has already said he will sign it into law.

While both sides of Congress hash out how the money the nation does not have will be spent, it’s clear that most of the funds will not go directly to Americans. It will instead go to interests the Democrats favor. Americans, especially fiscal conservatives, should be outraged. We’ve gone from proudly ending the “era of big government” to spending more money than anyone can imagine, and despite the questionable effects, “stimulus” spending by the government even has in stimulating economic activity and growth. Over the past year as COVID killed hundreds of thousands and lockdowns ravaged our economy, the government has now spent more than $4 trillion in money borrowed from other countries and from the future. 

One only needs to look at what’s happening in Venezuela right now to understand the risks this borrowing and spending spree poses to the economy. Bloomberg reports that hyperinflation has struck the socialist nation hard. 

“Venezuela said it will introduce new large-denomination bolivar notes as hyperinflation renders most bills worthless, forcing citizens to turn to the U.S. dollar for everyday transactions,” the financial news outlet reports. “The country’s central bank posted a statement on its website Friday saying it would begin circulating the new 200,000, 500,000 and 1,000,000 bills to “fulfill the current economy’s requirements” without providing further details. The 1,000,000 note -- the largest in the nation’s history -- is worth only $0.53 cents.”

Venezuela was once one of the most prosperous and stable countries in the world. Socialism took the third-most prosperous country in the Americas, with the world’s largest proven oil reserves, and turned it into a basket-case that’s now printing staggeringly large currency denominations. Compared to the dollar, the Venezuelan bolivar is practically worthless. Its nationalized oil companies struggle to produce. Jobs and food have become scarce. 

But the United States isn’t socialist, you say. That’s true. The United States is still nominally a capitalist country. But the combination of COVID shutdowns which quickly increased unemployment, the higher costs of goods production due to sanitization costs COVID imposes, the administration’s tightening of the fuel supply through canceling oil and natural gas leases on federal lands which is pushing fuel prices higher, and nearly unrestricted money printing may be fundamentally altering the American economy with effects that will be with us for decades if not permanently. The risk of inflation and even hyperinflation is real. The Democratic Party, which long billed itself as the party of the working class, is more and more under the sway of socialist Bernie Sanders and his allies, one more ominous sign of where events may take us.

The signs of inflation are already here: Gas prices are on the rise thanks to demand increasing as states reopen their economies and the fuel supply tightens. The Chicago Tribune reported in 2020 that grocery prices were already rapidly increasing. Harrison Swartz thinks inflation is already here, while JP Morgan’s Karen Ward wrote in May 2020 that “Coronavirus will awaken inflationary forces before the year is out.”

As the dollar weakens and Congress prints more of them, its value will likely fall. The question shifts from whether inflation will hit to when it does, where is it wise to invest to hold or grow value?

Gold is one of the world’s fundamental commodities. Ask the kings of old. 

It has many uses and intrinsic value. Long seen as a hedge against inflation, gold may be the place to park today’s value to see it grow. Gold hit a record high per ounce in 2020 while many other investments suffered from COVID’s economic instability. 

Inca One Gold (OTC: INCAF), an American gold royalty and mining company with significant operations in Peru, is very bullish on gold’s prospects in 2021 and 2022. Inca One CEO Edward Kelly sees reasons gold may outpace the most modest forecasts for 2021, which call for about 11% growth, to go above 20% over the year and top $2,500 per ounce. Inca One itself is well-positioned to see the future for gold, operating under Peru’s new permitting while the country is poised to grow from the world’s 8th largest gold-producing country to the 6th. 

The dollar remains the world’s reserve currency and there are no reasons to expect that to change. This should protect the dollar against extreme hyperinflation at least over the short term. But over the longer term, the United States cannot go on printing funny money without consequences, while millions remain unemployed and fuel prices rise. This is a potentially toxic brew that could combine into inflation. Gold, civilization's originally currency may be the sound, reliable safe bet to store value while the economy weathers the COVID storm. 

A.J. Rice is CEO of Publius PR, a premier communications firm in Washington D.C. Rice is a brand manager, star-whisperer and auteur media influencer, who has produced or promoted Laura Ingraham, Donald Trump Jr., Judge Jeanine Pirro, Newt Gingrich, Monica Crowley, Charles Krauthammer, Alan Dershowitz, Pete Hegseth, Steve Hilton, Victor Davis Hanson, and many others. Find out more at publiuspr.com

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