https://monetarysov.files.wordpress.com/2015/11/whats_austerity09.jpg
{Substack had disabled ILKI from publishing for a while. They apparently thought I had improperly imported one or more email addresses, but I didn’t import any at all. Maybe they figured that out, so now I can resume this substack.}
I HAVE QUESTIONS FOR SOMEONE SMART
DAVE C LANDRY
https://daveclandry.substack.com/p/i-have-questions-for-someone-smart/comment/14387807
_If everyone knows that printing money causes inflation and that inflation is bad, why do so many believe that it wouldn’t be corrected by halting the printing of money? Why does anyone believe that increasing interest rates would be effective in controlling inflation?
_If you increase the denominator of a fraction, you decrease the value of the numerator. It will be true every single time.
_I challenge you to cite for us what the rate of inflation was in America, any year before 1913. There never was inflation, because the value of each dollar was tied to the value of gold.
_It was not that someone decided that one ounce of gold was worth $20, it was because there was an ounce of gold in reserve for every $20 bill. This was simply a matter of math.
Len Kinder
_Mythfighter.com shows that printing money or federal spending does not increase inflation.
Dave C Landry
_If mythfighter is so sure, and you know that they are correct, why don't you explain it to us.
Len Kinder
_In this blogpost https://mythfighter.com/2023/04/01/the-reason-com-fountain-of-disinformation/ Mitchell shows 2 graphs. The first shows that there's no relationship between federal debt and inflation. The second shows a strong relationship between oil shortages and inflation.
_In this one https://mythfighter.com/2023/04/05/the-only-3-possible-solutions-to-the-entitlements-crisis-no-make-that-3-fake-solutions-1-real-solution/ he shows 3 graphs. The first shows there's no relationship between federal spending and recessions. With the second small graph he said "The recession of 2007 was caused by reduced deficit growth from 2003 through 2007. It was cured by increased deficit growth {federal spending} from 2007 through 2009." The third graph shows there's no relationship between federal debt and consumer prices.
_PS, I don't claim to know that Mythfighter is correct. I just claim that what I've read of his blog and Liz Harris's former blog (https://monetarysov.wordpress.com/) seem more logical and proven by graphs than any others I've read. I've read quite a few, but not thoroughly. I read libertarian economics of Friedman et al, then LaRouche economics and later MMT (Modern Money Theory) and Michael Hudson, before I came across Harris' and Mitchell's monetary sovereignty info. I think a computer simulation would probably be pretty easy to do to show whether Mon. Sov. economics would help lead to prosperity. Liz Harris said what really prevents prosperity is corruption, especially by bankers.
Dave C Landry Author
_I never implied that government spending caused inflation. It is the creation of money out of thin air that “is” inflation, because it devalues all American currency in circulation at the time it is added.
_You might wonder how this could be true. It is because it divides the current wealth a greater number of times without adding any value.
_There is no way to increase the number of dollars without devaluing each dollar. When the FED creates more dollars, the only way for the dollars that you have already earned to retain the same value is for the FED to also give to you the amount of dollars equal to the value that was taken from you. Multiply this effect across every American citizen and business and you have the true value of the dollar’s inflation.
_If 5 dollars are added to circulation it devalues every dollar in circulation by mathematical equation, but very slightly. If 5 trillion dollars are added, that effect is multiplied one trillion times.
_Over 96% of the money in circulation as of Oct 2020 had been printed in the first ten months of 2020. That seems like a lot of inflation to me.
_Government spending is not the cause of inflation, it is what is done with the fiat currency after it is created, and fiat currency is inflation because it steals the value of the wealth we have created.
_Government spending is the payoff to the government from the FED to allow them to steal the wealth that we have earned.
_The link to, "Inflation," ... is: daveclandry.substack.com/p/inflation-21c
Len Kinder
_I'll take a little time to briefly discuss this quote from you above: "I never implied that government spending caused inflation. It is the creation of money out of thin air that 'is' inflation, because it devalues all American currency in circulation at the time it is added."
_According to Harris, which seems correct to me, money isn't physical. It's abstract, or mental, I guess. It's similar to points on a scoreboard, or piece of paper etc where points are recorded.
_Federal spending is how money is created. I guess the currency is where the points are recorded. Since Congress sets the value of the dollar, or is Constitutionally assigned that job, if I recall correctly, then it doesn't seem to me that printing the currency would have an effect on the value of individual dollars.
Dave C Landry
_Thank you for your time. I have no time for such absurdity.
END OF LANDRY DISCUSSION
MY FURTHER COMMENTS
I'm pretty sure Congress is supposed to set the value of the Dollar, but I suppose it's possible that by now they may have given that authority to some other entity, like maybe the Federal Reserve. It would be interesting to find out who does set the value of the Dollar these days. I'm also curious, if Congress gave the authority to someone else, if they did so legally. Anyway, if Congress or some other entity sets the value of the Dollar, then it doesn't matter how many Dollars there are, they're each supposed to have whatever value they're set at. Another point is that Dollars don't need to be printed. They are also created as computer entries at banks etc.
Dave doesn't seem to want to rely on graphs, but I don't know if there's much of anything more reliable than graphs, when they're accurate.
What Mitchell and Harris explained, which makes sense to me, is that the economy goes into depression when federal spending declines too much. It makes sense that by creating more money the economy should improve and when the money supply shrinks there would be recession or depression. But I'm not clear on what happens to the previously created money that more money has to be constantly added to the circulation.
I heard on the news lately that the U.S. supposedly borrowed billions of dollars-worth of money from China and Japan, I think, but I suspect that it's fake news, because the U.S. can create whatever money it needs. So borrowing makes no sense to me. But there may be a conspiracy to end the Dollar as the world's main currency. Maybe the ruling class would benefit somehow from that.