A step in the wrong direction does more than fail to get you to your destination. It takes you farther from your destination.
Smallpox: Evil spirits aren’t what cause smallpox. Any efforts to prevent and cure smallpox via exorcism would have been wasted.
Worse, they would have led us down the wrong path, taking time, effort, and money from finding and addressing the actual cause, a virus. Worse than doing nothing, a false belief does real harm.
Before vaccination was invented, doctors gave smallpox victims “supportive care, ” mainly of fluids to prevent dehydration. The patient was isolated until all scabs had fallen off to prevent disease transmission.
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Alzheimer’s: Scientists have been working to understand the root causes of dementia and Alzheimer’s disease for decades now.
One of the leading theories suggests that Alzheimer’s disease is caused by the abnormal accumulation of two proteins called amyloid beta and tau in the brain, resulting in plaques and tangles.
Despite the huge amount of research that’s happened to date, there’s not been much success in treating and preventing Alzheimer’s disease.
This has led many experts in the field to wonder whether there’s something else we should look at to understand and cure Alzheimer’s disease.
A recent article in New Scientist Magazine highlights an alternative theory: that damage to mitochondria (the energy-producing structures within cells) could actually be the cause of Alzheimer’s.
The focus on ridding the brain of amyloid didn’t work, but actually may have hindered efforts to find the real cause of Alzheimer’s.
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Inflation: Inflation is a general increase in prices. Bing AI says: Inflation is caused by two main factors: demand-pull and cost-push. Demand-pull inflation occurs when demand from consumers pulls prices up.
Cost-push inflation occurs when supply costs force prices higher. Inflation can also occur when prices rise due to increases in production costs, such as raw materials and wages.
“Demand-pull” and “cost-push” are classic descriptions of inflation’s causes. They can be found in many economics textbooks. There are two problems with these supposed causes:
They don’t explain what has happened. They only describe what is. But, inflation is a dynamic process. Something changes to cause inflation. An economy moves from normal pricing to inflation.
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- Re. Demand pull: What causes a sudden, general increase in consumer demand? Anything? Do you know any examples of sudden increases in the consumer demand for a wide range of products and services?
- Re. cost-push. This supposed explanation is a tuatology: In essence it says, prices increases because prices increase. It does not explain what has caused the inflation in supply costs. It merely passes the blame downstream.
Inflation is caused by shortages of crucial goods and services, usually oil, food, and/or labor.
Oil shortages do not come about because of sudden increases in the demand for oil. They are caused by sudden reductions in supply, which may be due to decisions by oil suppliers like OPEC (Organization of the Petroleum Exporting Countries), Canada, and the U.S. itself.
Food shortages do not come about because of sudden increases in the demand for food. Food shortages can be caused by weather, crop disease, and/or government decisions.
Today’s inflation is caused by COVID-related and human-caused shortages, not by sudden increases in demand.
COVID reduced the world’s ability to drill, refine, and ship oil, which affected the prices of nearly every product and service on the planet. COVID impacted the supply of food and labor. COVID isn’t finished with us. The aftereffects still can be felt.
Oil drilling and refining still are down, partly because of COVID and partly because of OPEC and the Russa/Ukraine war. Food shortages result from oil shortages, weather anomalies, COVID-related labor and supply-chain shortages.
There is no evidence that inflations are caused by interest rates being too low.
The graph demonstrates the Fed’s failed attempts to fight inflation (red line) by raising interest rates (blue line). In the 23 year period, from 1967 through 1990, the Fed raised interest rates to extraordinarily high levels, but inflation also kept rising to high levels, only to fall before or during recessions.
Similarly, in the 12-year period, from 2008 to 2020, interest rates were kept extraordinarily low, while inflation remained low.
Twenty three years of high interest rates did not cure inflation and eight years of low interest rates did not cause inflation.
So what caused inflation and what cured inflation?
Oil prices (green line) respond to supply and demand. When oil is scarce, prices rise. When oil is plentiful, prices fall.
The graph demonstrates that inflation responds to oil scarcity, because oil availability affects the pricing of most other products and services.
Historically, the primary cause of inflation has been scarcities of oil, which have led to high product and service prices.
Today’s inflation has also been caused by COVID scarcities, not only scarcities of oil but of food, computer chips, supply chain availabilities, construction materials, labor, etc. COVID affected everything.
There are those who take the Libertarian view that federal deficit spending causes inflation. History does not support this belief
Changes in federal deficit spending (purple line) bear little relationship to inflation (red line). Increases in federal deficit spending do not correspond to high inflation, nor do decreases in deficit spending correspond to low inflation.
SUMMARY
The prevention and cure for a disease requires the prevention and cure for the cause of the disease.
Evil spirits and lack of fluids did not cause smallpox, so fighting evil spirits/dehydration did not prevent or cure smallpox.
If damage to mitochondria, not the accumulation of amyloids in the brain, proves to be the cause of Alzheimer’s, curing amyloids will not prevent/cure Alzheimers, but preventing/curing damage to mitochondria will.
Low interest rates do not and have not caused inflation, so raising interest rates will not prevent/cure inflation.
Inflation is caused by shortages, most often shortages of oil or food. Today’s inflation is caused by multiple, COVID-related shortages, and curing those shortages is the only way to cure inflation.
Our Monetarily Sovereign federal government, having the infinite ability to create dollars, should fund efforts to increase availabilities of oil, food, computer chips, construction materials, and labor.
Decreasing in taxes on businesses and employees would be a good place to begin.
For example, the FICA tax, which serves no purpose, raises the price of goods and services, and discourages employment. Eliminating FICA would be a good, easy first step toward reducing inflation.
Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.
MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Hi Rodger,
The price of oil is mid 60s a barrel? The price of food is up. So oil is not driving inflation, maybe food shortages.
Does this pandemic remind you of the 1918 Spanish flu which begat the 1929 depression?
I mean is the Fed manufacturing a recession into a depression?
I think having the Federal gov cover property taxes in some fashion ie direct payment to the city or a tax rebate for everyone that files.
Thanks, Penny
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Oil prices have been falling in the past 8 months, due in part to Biden’s release of oil reserves. Prices still are in the high range. see: https://fred.stlouisfed.org/series/DCOILBRENTEU
Oil’s sudden price increases were not caused by sudden reductions in interest rates or by sudden increases in usage. They are supply inflations. Interest rate reductions can only lower oil prices if they cause recessions. Interest rate reductions don’t drill or refine oil.
Food is the other key commodity that sets inflation, and its sudden price increases always are due to supply shocks, never to interest rates or government spending. The infamous Zimbabwe hyperinflation was a food shortage that happened when the government took farmland from farmers and gave it to non-farmers. Interest rate reductions don’t grow food.
The 1929 depression resulted from ten years of declining federal debt, which always leads to recessions. In 1919, the federal debt was $27,390,970,113.1 By 1929, the federal debt had fallen to $16,931,088,484.10.
That, not the Spanish flu or “excessive stock market risk” as often is claimed, caused the depression, which was cured only when the debt rose to $48,961,443,535.71 in 6/30/1941 then jumped to $72,422,445,116.22 in 1942.
The spending for WWII continued and the debt hit $269,422,099,173.26 by 1946. See: https://fiscaldata.treasury.gov/datasets/historical-debt-outstanding/historical-debt-outstanding
The 1946 drop in spending for WWII then caused a recession. As Wikipedia said, “The decline in government spending at the end of World War II led to an enormous drop in gross domestic product”
Penny, despite what economists seem to want you to believe, economics is pretty straightforward.
1. The federal government is uniquely sovereign over the US dollar and has infinite dollars. It cannot unintentionally run short.
2. Government spending causes economic growth, and lack of spending causes recessions and depressions.
3. Inflations are caused by shortages of key products and services, most often oil, food, and labor, which can be cured via federal spending.
That’s it. Everything else is description.
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Macron wants to increase the retirement age from 62 to 64. He argues that failure to do so will lead to a negative impact on France’s finances.
Could this be a consequence of surrendering monetary sovereignty to the ECB?
BUENOS AIRES, March 16 (Reuters) – Argentina’s central bank board said it agreed to hike the country’s benchmark interest rate by 300 basis points to 78% on Thursday after annual inflation hit 100% for the first time in over three decades.Mar 16, 2023
Just needs a little more time to work!
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Yes, France surrendered its single most valuable asset, its Monetary Sovereignty. Macron is stuck by reality. Sadly, the US pretends to be monetarily non-sovereign, and repeatedly tries to cut benefits for the not-rich.
Argentina’s problem is that it functionally is monetarily non-sovereign because no one wants its peso. So it has to borrow in foreign currencies. Interest rate increases will do nothing. Would you lend to them? I wouldn’t, even at 78%.
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https://www.redmmt.es/warren-mosler-talks-with-grupo-bolivar-in-argentina-english-parts-only/ In August 2020 he told them:
6 – Ban US Dollar Bank Loans
Now some more technical proposals
I would ban banks that accept government insured deposits from making loans in US dollars.
I don’t see how it serves public purpose, and the banking system is there to serve public purpose.
7 – Ban US Dollar Denominated Borrowing
I would ban government borrowing of US dollars by government and state owned enterprises.
Again, it doesn’t serve any public purpose for Argentina to borrow dollars like that from dollar denominated external debt.
11 – Stabilize Food Price & Supply
The next one is a strategic policy, and there may already be a policy in place. I’m not clear on that.
Establish food price and supply stability policies.
Traditionally this has involved various kinds of buffer stock policies by the authorities.
And by ultimately stabilizing the food prices domestically, It takes away much of the risk of inflation that the lower income people experience.
Increasing food prices is just a large source of instability for a country like Argentina.
So it absolutely serves public purpose to stabilize supply and price.
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“The focus on ridding the brain of amyloid didn’t work, but actually may have hindered efforts to find the real cause of Alzheimer’s.”
Reminds me a bit of Syphilis which goes through multiple stages over a period of decades if left untreated.
One of the lesser looked into theories [really a shame as there seems to be some substance to it] is that what we know as Alzheimer’s is the final stage of a systemic infection that begins in the mouth with the nasty pathogen Porphyromonas gingivalis causing gum disease. Pathologists have found P. gingivalis in the brains of about 90% of Alzheimer’s patients who donated their brains to science. It and the gingipains it produces are doing something there. https://en.wikipedia.org/wiki/Gingipain
They talk about ‘plaques’ — the atheromatous plaques of the arteries [Atherosclerosis] have also been found by pathologists to contain viable P. gingivalis. Though no one seems to be doing much research on how to deal with it — like a vaccine to prevent it in the first place or something that can be taken regularly to fight it offensively.
Human Atherosclerotic Plaque Contains Viable Invasive Actinobacillus actinomycetemcomitans and Porphyromonas gingivalis https://www.ahajournals.org/doi/full/10.1161/01.ATV.0000155018.67835.1a
Porphyromonas Gingivalis and Systemic Diseases https://encyclopedia.pub/entry/3224
Porphyromonas gingivalis, a Long-Range Pathogen: Systemic Impact and Therapeutic Implications https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7357039/
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Quotable facts for the 1950-1959 decade
https://libraryguides.missouri.edu/pricesandwages/1950-1959
In the United States…
Federal minimum wage increased from 75¢ to $1.00/hour in 1956. Source: U.S. DOL.
$1.00 in July 1951 was equivalent to $10 in July 2020. Source: CPI Inflation Calculator.
In 1950, the median household income was $3,000. Source: Federal Reserve. See more.
4-person families in NYC spent an estimated $3802 annually. Source.
HOUSING
Homes had a median value of $7,354 in 1950. Source: Census Bureau
New houses in 1950 typically had under 1,000 sq. feet of finished floor space. Source.
“New home buyers of the 1950s and 1960s predominantly were first-time buyers in their early 20s with only one income.” Source: U.S. GAO
TRANSPORTATION
60% of families owned a car in 1950. Source: Automobile Facts and Figures, 1957 ed.
In 1950, 47% of car buyers made the purchase in full cash. Source: Census Bureau
Gasoline cost 27¢ per gallon in 1950. Source: U.S. EIA
Milk cost 41¢ per half gallon in 1950. Source: U.S. BLS
Coffee cost 79¢ per lb. in 1950. Source: U.S. BLS
A pack of 20 cigarettes cost about 19¢ in 1950. Source: USDA.
A 15-word telegram cost $1.45 in 1951 (Washington to San Francisco). Source: FCC.
A 3-minute phone call cost $2.50 in 1951 (Washington to San Francisco). Source: FCC.
43% of the labor force had no more than a high school diploma as of 1952. Source: U.S. BLS
Health expenditures were $78.35 per capita for fiscal year 1949-1950. Source: SSA
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