Why Inflation Needs to Remain High

People need inflation explained. Many people don’t understand why inflation needs to remain high. Inflation & economics go hand in hand. The US National Debt cannot be repaid without high inflation continuing. The debt ceiling keeps getting raised as the US debt crisis continues to get worse. If you’re one of the millions of people that need US inflation explained and economics explained in a simple and easy to understand way, this video is for you. Inflation in the US is getting worse, not better, and the government is lying to you about how high inflation really is. And a stock market crash could occur on Wednesday when we get more inflation news as the CPI inflation data comes out on the same day the FOMC June Federal Reserve meeting takes place.

Inflation needs to remain high in order for the US government to pay their debts. Now, some of you already know this, and for those of you who do, I ask you to please help me get the word out, because people need to understand what is going on. They need to understand how they’re being lied to, and they need to understand the truth about inflation. For those of you who don’t understand what’s going on, stay tuned, because I promise you, by the end of this video, it is going to become crystal clear.

Now you already know that inflation is getting out of hand. The prices of gas and groceries is going higher and higher and higher, and everybody is hurting. Every single month that goes by, it becomes more and more difficult just to be able to afford our basic necessities. And even though we are getting pay raises from our jobs, I don’t know about you, but no job I’ve ever had, was the pay raise high enough to keep up with inflation. It seems like the pay raise we get from a job is quite small compared to how much the prices of everything are actually going up. And because of that, we just seem to get further and further behind every month.

This has led a lot of people to find other ways to supplement their income. At the end of this video, I’m going to show you how we are going to turn $2,000 into $10,000 this month. So if you could use some extra cash this month, stay tuned to the end of the video, and I’m going to show you how we’re going to do it. First, let me show you why inflation needs to continue and why inflation needs to remain high.

The US national debt is currently sitting at $34.6 trillion. There are currently around 342 million people living in the United States. That means if you take the US national debt and divide it by every single person living in the United States, it comes out to be $101,000 per person. And let’s just be realistic here, the government is never going to be able to pay that back. Do you honestly believe that politicians are actually going to work together, and balance the budget, and return us to a surplus like we had in the year 2000? Do you honestly believe that they’re going to stop spending money and get us out of debt? It’s a pipe dream. It’s never going to happen.

And to make matters worse, the government is actually going more and more into debt every single year. The US deficit has never been this large in the history of the United States. In 2023 alone, the US government went $1.7 trillion more into debt. That means the US government overspent by $1.7 trillion, and the US government was on track to overspend by another $2 trillion here in 2024. The US government was expected to pull in about $5 trillion in tax revenue, and they were expected to spend about $7 trillion, putting us another $2 trillion into the hole, which would have increased the national debt to $36 trillion.

Now politicians came out and they boasted about the fact that they were able to reduce the deficit by $1 trillion. Well, congratulations. That means that the US government is now only overspending by $1 trillion instead of $2 trillion. So instead of putting us an extra $2 trillion into debt this year, they’re only going to put us $1 trillion into debt this year. It’s absolutely absurd. And I guess it’s helpful, but in reality, it’s really not. The spending problem remains out of control, and there is absolutely no hope for the US government to ever reduce their spending to the point where we have a surplus. And that is why the government’s only hope of ever paying off this $36 trillion worth of debt is inflation.

The government’s best solution to the debt problem is inflation. Inflation makes it easier to pay back your debt. Let me give you an example to show you how this works. Let’s say that you buy a home for $400,000. And let’s say your monthly mortgage payment is $3,000 per month. And just for the sake of this example, let’s say your monthly income is $5,000 per month. And once you add in all of your bills, your utilities, your gas, your food, you’re struggling to pay your bills, you’re struggling to pay your mortgage. In other words, you’re struggling to pay your debts. The exact same situation that the US government is currently in.

Now let’s say inflation goes up by 10% this year. And let’s say your income goes up by 10% this year to match. Now, I know that doesn’t happen in reality. Again, this is just a hypothetical to show you how inflation helps the US government pay off their debt. So let’s say your monthly income increases by 10% this year from $5,000 up to $5,500. Well, your mortgage payment doesn’t go up. It stays the same at $3,000 per month. So now you have an extra $500 per month in income, but your debt stays the same. So every year your income goes up, it gets easier and easier to pay off your debt.

And that is what the US government is hoping for. They’re hoping that high inflation will cause wages to go up, it will cause profits to go up, which in turn will increase tax revenue. And that in turn will increase the income for the government while their debt stays the same, or at least their income goes up by more than their debt goes up. And if that does in fact happen, it will make it easier for the US government to pay off their debts. So high inflation is good for the US government, even though it hurts consumers like you and I.

Now politicians don’t want you to know how high inflation actually is. If you knew how high inflation actually was, you more than likely would not be voting for those politicians. You’d kick them out of office. And because politicians want to win elections, they lie to you about how high inflation actually is. Over the years, the methodology for calculating CPI inflation has undergone numerous revisions. According to the BLS, the changes removed “biases that overstated the inflation rate”. The new methodology takes into account changes in the “quality of goods” and the effects of substitution. That’s a bunch of mumbo jumbo to basically say that the US government fudges the inflation numbers to make them appear a lot lower than they actually are today.

Recently, the US government started using rental rates instead of home price ownership in order to calculate inflation. Why? Well because the average rent cost went below the average price to own a home. And because rental costs are now lower than the cost to own a home, the government simply switched the data point they use from home ownership to rental income. And by doing so, they were able to “lower inflation”, or at least make it appear lower than it actually is. They also do a number of substitutions, such as swapping one vegetable for another, basically picking whichever vegetable has gone up the least, and thereby again making it appear as if inflation is much lower than it actually is.

As you can see on the chart, if we did not use substitutions, the rate of inflation would be much higher than what they’re able to report with substitutions. If you combine all of this together, take the 1980 way of calculating inflation before the government started making a bunch of changes, and you compare it to the way inflation is calculated today, the difference is absolutely staggering. On this chart, the blue line is the 1980 version of how inflation was calculated, and the red line is the way inflation is calculated today. Based upon how inflation is calculated today, the US government is showing that the current rate of inflation is around 3% to 4%. But if we still use the 1980 version of calculating inflation, it would show inflation at around 12%. It would also have shown that inflation was the highest in the history of the United States back in late 2022 and early 2023.

Telling you that inflation is only 3%, when in reality it’s 12%, is a major difference. I mean, that means inflation is four times higher than what the federal government is telling you. They are flat out lying to you about how high inflation is in order to get re-elected. And that really, really hurts US consumers, because a lot of our increases in income with our jobs is based upon how much the federal government claims inflation is going up. Social security goes up by 4%, because that’s what the US government says inflation is at, when in reality, the cost of all of our goods and services went up by 12%. Same with your job. You might get a 5% increase or even a 10% increase. It doesn’t matter. It’s still not high enough to keep up with inflation when inflation is running at 12% to 15%.

And so long as the US government is able to continue to lie to you, they can make you feel good about inflation coming down, when in reality it’s really not. It’s still the worst it’s ever been – much worse than it was in the 1980s. But so long as you’re comfortable being lied to, well, good for you. But let me know in the comments below… Are you really happy being lied to, or does it piss you off that the government is lying to you about how high inflation really is?

Now all of that said, we’ve really got to watch the CPI inflation report coming out on Wednesday. Why? Well, this is a unique one. On Wednesday, not only do we get the CPI inflation report, but we also get the FOMC meeting. While the FOMC is widely expected to not raise or cut interest rates at their next meeting – they’re expected to leave it the same – what Jerome Powell says about inflation and interest rates and the labor market is going to make a huge impact on the overall stock market. Wednesday is going to be a major, major day in the stock market. So keep an eye out for huge volatility spikes on Wednesday, both in the morning after the CPI inflation data comes out, and around 2 p.m. when Jerome Powell starts speaking after the FOMC meeting wraps up.

Now all of that said, I told you at the beginning of this video, I was going to show you how we plan to turn $2,000 into $10,000 this month. And we’re going to do that with something called a Small Account Challenge, affectionately known as a SAC. The Small Account Challenge is going to be run by Ace of Trades. Ace has done 20 of these Small Account Challenges so far, and 90% of them have been successful. Ace is by far one of the most successful traders in the world. He is a multi-millionaire. He makes over $1 million a year trading stocks and options. Over the past year, Ace has made 433 trades. 364 of those were wins for a 75% win rate. And his average profit per trade is an 84% profit per trade.

Now a lot of you have asked me where you can find Ace on social media. You want to follow Ace’s YouTube or Rumble account. You want to follow Ace on Twitter, or X, or Instagram. And I’m here to tell you, Ace is not on social media. You may have heard the old adage that those who can do and those who can’t teach. Well, everybody that knows how to invest in the stock market and are good teachers, we’re all on social media. We’re on YouTube and Rumble and Twitter and X and Instagram. And we’re teaching you how to invest in the stock market. But those who can make millions of dollars a year trading stocks and options, they’re not on social media. They’re trading. They’re sitting in front of their computers trading all day.

So where do you find these people? How do you follow them? Well, you find them in the discord. And the next 200 people that sign up for the discord are going to get the biggest discount we have ever offered. It is 40% off the Stock Dads’s Discord for Father’s Day. All you have to do is enter the code FATHERSDAY at checkout to get 40% off the discord for life. Come join Ace’s Small Account Challenge, where we’re going to be turning $2,000 into $10,000. Get some extra cash that you can use to pay bills and buy groceries. The Small Account Challenge starts on Monday, June 17, 2024. The first trades will be taking place on Monday, June 17th.

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