Trump Goes Federal Government Spending Insane

President Trump on Tuesday said a significant investment in infrastructure should be part of a fourth congressional coronavirus relief package.

“With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill,” Trump wrote on Twitter. “It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country!”

Of course, a primary reason interest rates are near zero is because the Federal Reserve Board is pumping out newly created money in mad amounts to drive interest rates down. And buying Treasury securities is a key part of the Fed money pump.

At the end of February, the Federal Reserve owned $2.47 trillion or 14.6 percent of all Treasury securities outstanding– making it, by far, the largest single holder of U.S. Treasuries anywhere in the world.

But this number will no doubt be dwarfed by the end March number given the money pumping the Fed has done in March to "rescue" the economy.

I am warning in the EPJ Daily Alert that on the other side of the current COVID-19 panic, there is going to be a very strong acceleration in price inflation.

There is never a good time to expand government spending but certainly not when some $6 trillion in new rescue money is already floating around.

To add an additional $2 trillion to this is irresponsible and mad.

-RW