Economists warn big wave of ‘Biden inflation’ coming, say high govt. spending devalues U.S. dollar
UPDATED 7:34 AM PT – Friday, May 28, 2021
Economists are warning the U.S. will see rising inflationary pressures in the coming few months.
According to the Competitive Enterprise Institute, the Biden administration is trying to hyperstimulate the U.S. economy after it was ravaged by COVID-19 lockdowns. However, the combination of ultra low interest rates and elevated federal spending leads to a depreciation of the U.S. dollar.
Experts from the Heritage Foundation agreed and said money is losing its value, in turn, pushing consumer prices higher. As a result, consumer spending, the main driver of the U.S. economy, is already faltering.
“It sounds like a wonderful idea, right? The government owes money, they print money, they service debt, there’s no consequence,” stated Phillip Patrick, analyst at Birch Gold. “Sadly money doesn’t work like that…the more money you print, the more you throw into the system, it dilutes the potency of that currency and it ultimately fuels inflation.”
Analysts have said U.S. central bankers understand this problem, but they can not raise interest rates to prevent it without risking the sustainability of U.S. national debt.