Wednesday, December 30, 2020

The Second Super Money Pump of 2020 Has Begun

Treasury Secretary MNuchin and his wife.

The US Treasury has issued a statement that includes:

Today, the Treasury Department and the Internal Revenue Service will begin delivering a second round of Economic Impact Payments to millions of Americans as part of the implementation of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021.  The initial direct deposit payments may begin arriving as early as tonight for some and will continue into next week.  Paper checks will begin to be mailed tomorrow, Wednesday, December 30...

Eligible individuals will receive an Economic Impact Payment of up to $600 for individuals or $1200 for married couples and up to $600 for each qualifying child. Generally, if you have adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the second payment.  For filers with income above those amounts, the payment amount is reduced... 

The swift issuance of this second round of payments follows the successful delivery of more than $270 billion in CARES Act Economic Impact Payments earlier this year, providing crucial economic support to nearly 160 million Americans.


Later this week, you may check the status of your payment at 

Once again I make a loud objection. This is money being printed by the Federal Reserve out of thin air. It is not the handing out of more products or services. The lockdowns are preventing increases in productivity---all to "battle" a virus that is not a threat to 99.9% of the population.

The country should be opened up and the lockdowns ended. The money printing of 2020 has done nothing but increase the threat of a substantial acceleration in price inflation in 2021. It is extremely irresponsible policymaking.

The chart below shows the Federal Reserve money supply pump over the last 5 years and the explosion of the money pump in 2020. Nearly $5 trillions dollars have been pumped in on a money supply base of  $14 trillion:

This money pump is behind the explosion in stock prices and housing prices. Eventually, the money flow will push consumer prices much higher and be a burden on those who can least afford it, those on a fixed income.

When the price inflation accelerates, just remember that it started in 2020 under Jay Powell at the Federal Reserve and Steve Mnuchin at the Treasury. They should be considered responsible and condemned by future historians.


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