By Alejandro A. Tagliavini *

                The average weekly earnings of the 104.5 million full-time workers in the US increased more than 10% in the second quarter from the previous year, a record, exceeding US$ 1,000. According to the government, «it reflects the fact that employment decreased more for low-wage workers than for high-wage workers.» As always, the State harms the weakest as this is a consequence of recent government repressions to the markets. In any case, it hides an inflationary component.

               Inflation that has its origins on the US$ 3 trillion that made up the “stimulus” package launched by the Federal Reserve, and US$ 4.5 trillion globally. Which is consistent with the belief that the government must take care of us, guide us and stimulate us in everything as if it were not clear that what arises from violence – of which the State has a monopoly – only destroys, even in the health sector in which the private people in freedom have demonstrated to conduct themselves with much more efficiency.

               And the worst thing is that it seems to have no end since many, like the statist IMF and the World Economic Forum, promote greater progressivity in the role of the State. Supposedly this inflation, this effortless injection of money, without labor and production, Keynesian-style, will lift the economy, yet the recovery slows down.

                  Due to inflationary pressure, the US stock markets remain well above their 2020 lows. In particular, technology companies such as Amazon have benefited, whose share on Monday, July 21 rose 7.9%, adding to its founder Jeff Bezos $ 13 billion to his fortune, making it the biggest jump in a single day for an individual, according to the Bloomberg Billionaires Index. This year, his fortune increased to US $ 189.3 billion, being the richest person in the world, since he owns 11.1% of Amazon shares whose market value has exceeded US $ 1.5 trillion, an absolute record.

                   To top it off, the European Union (EU) has just announced that, for the first time in its history, it will go into debt to finance an economic stimulus with € 390 billion in subsidies and 360 billion in credits and a financial framework for 2021-2027 of more than a trillion euros. The largest financial pact in its history: 1.8 trillion in total, equivalent to 17% of the Gross National Income of the EU, higher than that undertaken by the US (15.9%) or China (4.2% ) to ironically respond to the brutal crisis that these same governments have caused with their recent repressions to the markets.

                  Obviously, as always happens with funds managed by politicians, a lot of corruption is looming, in fact, to approve this plan they have explicitly renounced strict control over community funds.

                   It is so clear that the future is negative that, when the EU made the announcement of such an injection of money, the stock markets initially rose, but later moderated and seem to go down. Thus, in the face of these inflationary trends, the quintessential refuge remains, Gold. Obviously, and we anticipate it, it has been rising and so has increased 21% so far in 2020 to around US$ 1,840/ounce. By the way, buying physical gold is not recommended, instead Futures, ETFs (Funds listed on the stock exchange) and the Funds that invest in gold.

* Senior Advisor at The Cedar Portfolio  and Member of the Advisory Council of the Center on Global Prosperity, de Oakland, California


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