"The president is so focused on fighting to bring down costs for hard working Americans. For instance, the president believes it just isn't right that prescription drugs are practically unaffordable for many Americans, and that's why he's fighting to lower health care costs. He got great legislation to cap insulin costs for seniors at $35 a month."

— Lael Brainard, National Economic Council Director

The government needs to show that it is fighting inflation but to do so, and to do it honestly, the government would need to admit that they are the cause of inflation. That the gravy train that is the federal budget is the cause of inflation.

And they won't do that. So they pretend to fight inflation.

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Pretending to fight inflation

Ms. Brainard, the top economic advisor to the Biden administration, recently gave an interview to NPR that can be summarized as "We are posturing that we're fixing the economy even though we are not and we can't believe that people are not falling for it".

The government needs to show that they're doing something but they don't really want to reduce the debt and the current spending, actions that would actually reduce inflation, because that would put their re-election at risk.

So instead they take token actions around insulin for medicare and fees by airlines or banks.

What do these industries have in common? They are highly regulated. What do they don't have in common? They cause inflation.

These actions will never have a major impact on inflation. Unless they "gerrymander" the inflation basket items even more and make these three items the key items that supposedly Americans are buying every month.

Actually fighting inflation

The Federal Reserve is not stupid. They know that the money supply, all the money printing to buy things we can't afford, is what is causing inflation.

Since August 2022, the Federal Reserve has quietly tried to reduce inflation for real by reducing the money supply but in April of this year they reversed course and started adding more money again in the economy.

Money supply M2 since 1959 Money supply M2 June - 2022 to today

Who asked the Federal Reserve to add more money to the economy? The answer is obvious: the Biden administration.

The governments don't want to fight inflation because that will require sacrifices. It will require admitting that we maxed the credit cards and that now we need to tighten our belts to pay them off. How many politicians in power do you know who are ready to say so openly?

You will only hear this message from politicians who are running for office: I've only heard this message from Vivek Ramaswamy (republican) and Robert Kennedy Jr. (independent).

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Notable notes

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Recommendations

Preston Pysh

Preston Pysh is an investor and Bitcoin educator. You can listen to his podcasts at The Investor's Podcast Network.

You can follow him here.

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This newsletter is for educational purposes. It does not represent financial advice. Do your own research before buying Bitcoin.