The Coronavirus Must Not Be Allowed to Make the Dollar into the New Toilet Paper

Do not be surprised if, a year from now, prices are 20 percent or more higher than they are today and that tens of millions of elderly people on fixed incomes suffer greatly as a result.
The recently enacted “stimulus” legislation costing $6.2 trillion can be paid for only by the printing of new and additional money in that amount, which will represent an increase in the M1 money supply to substantially more than double its present height.
This amount of increase in the money supply is sufficient by itself to double or more than double prices and totally destroy the finances of the elderly, if not by next year, then over the next few years.
With today’s mentality of bottomless economic ignorance and reckless irresponsibility, the plight of the elderly will likely be met by still more “stimulus.”
We are in process of destroying the dollar.
The long-run solution is to deprive the government of the power to create money, which can be accomplished by restoring the gold standard and requiring that the issuance of new and additional paper money be limited by the increase in the supply of gold.
The immediate solution is to go back to work and end the seeming need for trillions of additional paper dollars, the consequences of which will be worse than any the Coronavirus could produce.
The lockdowns are in violation of The First Amendment’s prohibition of laws violating the freedoms of religion and of assembly. They are also in violation of the Ninth Amendment’s implicit recognition of the right to work.
Organizing should be started on a million-man march on Washington to demand the end of lockdowns and the government’s ability to create limitless quantities of paper money.
Let all who are at risk from the Coronavirus take precautions. But do not consider as a precaution the destruction of money and the economic system.
We must not allow trillions to become the new billions, and then the new millions, and the paper dollar to become the new toilet paper.

A video version of this post can be found on YouTube under the title "No Toilet Paper Dollar." It's at https://www.youtube.com/watch?v=96Z8VTiE8iw&feature=youtu.be

Major Inflation and Great Depression at the Same Time?

Re: https://mises.org/wire/why-world-has-dollar-shortage-despite-massive-fed-action
Mises.org: Why the World Has a Dollar Shortage


Dear Bob,

I’ve  just read not only the article but also all the comments that followed it, and I thank you for calling it to my attention. I had not been aware of the extent of the dollar’s use in debt issuance abroad.

If possible, I’d like to get some more information. For example, the volume of dollar denominated debt issued outside the US relative to dollar denominated debt issued inside the US. The volume of externally issued dollar denominated debt relative to Euro, Yen, and Yuan denominated debt. The volume  of dollar denominated debt owed by foreign banks to US banks and of such debt in general owed by foreign firms and individuals to US banks and other US lenders, including corporations selling on short-term credit.

The world’s alleged dollar “shortage” is of the same character as a heroin addict’s heroin shortage. There’s an artificial need that’s created by consuming the supply, getting hooked on it, and then needing an ever growing supply. In this case, cutting back on the supply, not increasing it, would eliminate the “shortage.”

Interestingly, in the German hyperinflation of 1923, there were frequent complaints of currency shortages and the German central bank claimed that it was increasing the supply of marks in response to an increase in the demand for them. What was actually going on was that people were trying to buy goods as fast as possible, before their prices rose still further and needed more cash with which to do so.

The article is making me wonder if we could simultaneously have a world-wide depression as the result of dollars being insufficient to avoid large-scale bankruptcies abroad and their snow-balling effect, and, if not an immediate hyper-inflation, at least a very major surge in consumer prices in the US, because of the massive new and additional money creation now underway with the “bailout” programs.

I’m taking the liberty of publishing my reply to you on my blog and also adding it as a further comment on Mises.org and Dis Cus.



Best regards,

George

How Far Left the Democrats Actually Are

It’s clear that today’s Democratic Party is very far left. But it may come as a surprise to learn that it’s further to the left than the Chinese Communist Party! Much further. For example, China has the world’s second largest number of private billionaires and is proud of that fact!

It's still strongly influenced by the legacy of Deng Xiaoping, who reportedly said, “To get rich is glorious” and “Let some people get rich first.” If these words were said in America, the Democrats would denounce them as the “trickle down” theory.

To learn what's right with capitalism and wrong with socialism, and implicitly what's right and wrong with China, first read the book at https://amzn.to/2N44uTu and then, for deeper, more comprehensive knowledge, the book at amzn.to/2PM19ut. Especially Democrats and all other leftists should do this.

 

Coronavirus March 30, 2020

According to worldometer (https://bit.ly/3bDD6rk), the latest US death toll from the Coronavirus is 2,938, an increase of 538 from the 2,400 I reported yesterday. As a percentage, it’s a 22% increase. Relative to US population, it’s now 9.7 per million up from 8 per million.

At a compound daily rate of increase of 22%, the cumulative total of deaths would reach 71,000 by April 15 and 1.4 million by April 30. Thus, an essential element to watch for is a change (hopefully, a sharp decline) in the daily rate of increase.

The worldometer website is updated throughout the day and thus the updates can affect the percentage change. The update used above was as of 1 PM Pacific Daylight Time (GMT-7).

Reisman has numerous works available on Amazon. See http://amazon.com/author/george-reisman

Actual and Projected Death Rates of the Coronavirus

As of 3/29/20, the death toll in the US is 2,400; globally, it’s 34,000. As a proportion of population (300 million in US and 7 billion globally), that’s 8 per million in the US and less than 5 per million globally.

Some prominent politicians have said roughly half the population will catch the virus. If the death rate in this group were 1%, the implication would be 1.5 million US deaths. The sharply lower death rate of .1% would result in 150k US deaths.

The actual death rate and its acceleration or deceleration can easily be calculated every day and can serve as a guide to judging the worsening or tapering off of the disease. To do this, all that’s needed is the cumulative daily death tolls, which are widely reported.

For Reisman’s works available on Amazon, see http://amazon.com/author/george-reisman

A Soviet-Style Economy in America?

America may be headed toward a Soviet-style economy, with permanent pervasive shortages and waiting lines.

This is because Congress and the media believe that massive money creation can offset the massive reductions in production and supply caused by government prohibitions on working.

(The government’s alleged relief and bailout programs all boil down to just one thing: create new and additional money and dump it into the economic system. Even send it to people directly in the mail, in the form of government checks.)

The truth is that increases in money and spending combined with reductions in supply are a double-barreled blast that works to drive prices up. But the rise in prices is already prohibited by anti-“gouging” laws, to which overt, comprehensive price controls may well be added.

The combination of price controls, more demand, and less supply means shortages everywhere that spending strives to increase in the face of less production and supply. In the best-case outcome, i.e., if price controls are removed, or not imposed, it means a surge in prices.

A surge in prices, of course, would mean yet a further decline in the value of accumulated savings on top of the plunge in the stock market and which may be further worsened by a plunge in the bond market.

When one takes account of the consequences of the government’s efforts to combat the Coronavirus, it looks increasingly like the government’s action has served to make a bad situation even worse.


Visit Reisman’s Amazon.com’s author’s page at http://amazon.com/author/george-reisman

China’s Alleged Overcoming of the Coronavirus

According to the NYT (https://nyti.ms/3bgDFHH), there are no new Coronavirus cases in China except for those brought in from the outside. This is a claim not just about Wuhan but the whole country.

This claim implies that it took no significant time whatever for the disease to spread from Wuhan throughout the rest of China and that now all of China can be assumed to be essentially free of the disease. (There isn’t enough salt to take this with.)

A hypothesis worth considering is that China is desperate for foreign exchange earnings and is getting ready to order its population back to work at risk of being infected or not.

A second hypothesis worth considering is that the Chinese have found that, outside of particular identifiable segments of the population, the death rate from the Coronavirus is much lower than initially believed, perhaps comparable to that of the flu.

P. S. If you don’t like the empty store shelves, wait ‘til you try socialism. Under socialism, empty shelves are so common that it’s such an event when a store has something worth buying that a line immediately begins to form without people even knowing what it is that’s available.