That is, hoarding silver and fighting inflation!
Faced with the expanding fiscal stimulus of the US government and the endless printing of money by the Federal Reserve, European and American retail investors believe that an epic inflation will inevitably occur, and then it will inevitably flood. And silver will become Noah's ark of self-redemption.
As for why epic inflation is inevitable, one inference is as follows:
A. The fiscal deficit in the United States continues to rise, which is the most serious in 70 years. In March last year, the US Congress passed the CARES rescue bill of 2.2 trillion US dollars (US dollars, the same below), and in February 65438, it approved a 90 million stimulus plan, which added up to 3. 1 trillion, but at the same time, the US government's tax revenue was decreasing, and in addition to other 788 expenditures, the US government increased its debt by 4.4 trillion in 2020.
B 54% of the 4.4 trillion new national debt, or 2.4 trillion bonds, is paid by the Federal Reserve. In other words, the Federal Reserve will buy19.7 billion bonds every month in 2020. This year, the Federal Reserve said that the monthly bond purchase will remain at $80 billion, which is equivalent to a decrease of 60% compared with last year! Can such restraint really be achieved?
C.of course not! According to Biden's plan, the US government will launch two rounds of stimulus plans this year: one is to launch a 1.9 trillion "bailout" stimulus plan, and the other is to launch a "recovery" stimulus plan that is likely to be as high as 3 trillion. The sum of the two is 4.9 trillion, which is higher than the total stimulus scale of 3. 1 trillion last year10.8 trillion!
D. Looking at the revenue and expenditure of the US federal government again, in June+10 this year, the federal government revenue decreased by 3% year-on-year. In other words, while the US government is expanding its loan scale, its own income is decreasing, and its solvency is weakening step by step.
E. So, the question is, in this case, who will buy American bonds? Foreign investors? Looking at the situation last year, foreign investors only bought 5.2% of US Treasury bonds, while Bank of America only bought 17% of US Treasury bonds. The biggest buyer of US Treasury bonds is of course the Federal Reserve.
F. Not only that, the Fed must also help reduce bond yields so that the already heavily indebted US government can continue to borrow. In this process, the market value of the stock market and the bond market will continue to hit new highs, and inflation will intensify. But the Fed has no choice but to firmly play the role of lender of last resort, start the printing press and continue quantitative easing.
According to this deduction, an epic inflation is inevitable, so it seems not so absurd to hoard gold and silver in European and American leeks, right?