Inflation and Recession

Economically speaking, the aggregate demand for the U.S. economy represents the quantity of domestic products in general that are demanded at each possible value of the price level. If there is too much money being printed and in circulation, an increase in the aggregate demand pushes the price level up. If the aggregate demand continues to increase month after month, the economy will suffer from inflation – a sustained increase in the general price level.

When production falls and people lose jobs, two consecutive quarters to be exact, the economy experiences a recession.

The mainstream media pundits, who are not economists, but communication or English majors, are twisting themselves into pretzels, trying to redefine the term recession to spare embarrassment to their favorite Democrat president, Joe Biden, and his disastrous economic policies. They are counting on most Americans, with or without a college degree, not knowing basics of Macroeconomics.

If recessions are deep and sustained, they turn into depressions. Here are events in economic history that had affected American families deeply:

-          the depression of the 1890s after the rapid industrialization and railroad prosperity

-          the panic of 1907

-          the postwar depression following WWI

-          the Great Depression of the 1930s

-          the postwar recession following WWII

-          the 1974-75 recession with serious stagflation in the U.S.

-          the 1982-83 recession

-          the 1990-91 recession 

-          current inflation and recession under President Joe Biden

The economy also experienced dramatic deflations, sustained decreases in the general price level, such as the post-Civil War deflation, in the 1870s, the 1880s, 1921-1922, and 1929-1933.

The decline in economic activity during the Great Depression was the most severe in our economic history until the lockdowns of Covid-19 in 2020 from which world economies are still struggling to recover from due to the disastrous government interference in the free markets.

The Great Depression taught us that recessions and inflations take a long time to self-correct, and the right combination of economic policies, fiscal and monetary, must be adopted by governments. Are these economic policies successful? Not all the time.

To power large economies, crude oil and coal are necessary for energy and economic growth, not the unreliable green energy, solar and wind. Governments are expected to manage their economies so that “recessions do not turn into depressions and depressions will not last as long as the Great Depression.”

When rapid inflation occurs while the economy is growing slowly (“stagnating”), or in a recession, then we experience stagflation such as that experienced in the 1970s in the U.S.

The Federal Reserve, which is neither federal nor a reserve, but a private corporation since 1913, controls monetary policy, money stock and interest rates. When a competent person is at the helm of the twelve regions’ federal reserve banks, the Federal Reserve (Fed) can take actions to influence aggregate demand by changing interest rates up or down, making borrowing more expensive or cheaper, or by altering the money stock (supply). The Fed engages in buying and selling of securities and the printing of new fiat (Latin for “let it be”) money not backed by any goods or services, to control interest rates and the money supply.

Can the government stabilize the economy with its fiscal policies (federal taxation) or even manage it correctly? As history shows, the answer is no. One of the reasons is the out of control spending that Congress engages in which requires more money that we do not have enough of from taxation, money which then must be printed by the Federal Reserve’s printing presses or borrowed from countries like China.

Printing so much money without the backing of goods and services devalues the currency, i.e., the dollar. During the American Revolution, one dollar was worth 2 ½ cents. The Bureau of Engraving and Printing runs the printing presses since 1862 and produces dollars (“greenbacks”), using the same magnetic ink and special cotton (75%) and linen (25%) paper made by Crane and Company since 1879.

So, is inflation bad for everyone? It is if you look at it as unlawful taxation forced upon all Americans because they must pay so much more for their food, gasoline, medical care, travel, entertainment, housing, energy, etc. It is worse for the elderly and people living on fixed incomes who do not qualify for or are too proud to ask for welfare.

Debtors can come ahead in an inflationary environment. Earning $100 you borrowed two years ago becomes easier. What you repay in real terms is much less than the $100 because the money you use to repay the lender will not buy now what it would have bought two years ago.

 

The First Quarter 2020 Economic Recession Due to Lockdown Orders

Economic Recession Data published on April 29, 2020:

Q1 Gross Domestic Product (GDP)                           -4.80%

Personal consumption expenditures                          -5.26%

Services                                                                     -4.99%

Household consumption expenditures for services   -5.61%

Health care                                                                -2.25%

Unintended Consequences of Renewable Energy?

The D.C. metro was plastered last month with ads by GoWithCanada.ca, promoting the proposed 1,179-mile Keystone XL Pipeline, a 36-inch-diameter crude oil pipeline originating in Hardisty, Alberta, and extending south to Steele City, Nebraska.  Described as “America’s best energy partner,” Canada provides United States refineries every day with 2.4 million barrels of crude oil, more than Saudi Arabia and Venezuela combined. The ads explained that “80% of Canada’s oil sands production capacity is owned by North American companies.”

The $5.4 billion project would allow oil producers more access to the large refining markets in the American Midwest and along the U.S. Gulf Coast, as well as energy independence from unstable Middle Eastern regimes.  There is one little problem, the current administration delayed the decision beyond the November 2014 election despite angry protests. “Senator Mark Warner cosponsored legislation supporting the Keystone XL Pipeline that would override President Obama’s continued delay.” info@energycitizens.org

Democrat Begich of Alaska said, “I am frankly appalled at the continued foot-dragging by this administration on the Keystone project.” The delay “means we’ll miss another construction season, and another opportunity to create thousands of jobs across the country.” Who needs jobs when we have generous welfare and unemployment, and the economy is rolling at a 0.1% growth and the Fed says the recovery is back on track?

Meanwhile most environmental groups are giddy that renewable energy will protect precious Mother Earth and are busy designing a Sustainable Future based on wind and solar energy. There are few universities left that do not offer either a bachelor’s or master of science degree in Sustainable Design, engineering, architecture, or Sustainability everything.

Not all environmentalists are happy. The “smarter fuel future” turned out not so wise after all – “the renewable fuel standard is broken.” The ethanol mandates, the hope and glory for “a cleaner, greener, smarter fuel future,” devolved into a nightmare of 5 million acres of “pristine lands” set aside for conservation (“more than Everglades, Yellowstone and Yosemite National Parks combined”) becoming “super-sized cornfields, making hunger and poverty worse, and putting your engine at risk.” The corn produced into biofuels in 2011 could have fed 570 million people. The proposed 15% ethanol mixture would definitely damage most engines. http://smarterfuelfuture.org/BrokenPromises#.U2Q-YkPGI6c.facebook

The much touted renewables of wind and solar have turned out to be money pits of bankrupt solar companies, expensive and much dirtier energy, millions of chopped and fried birds, including our country’s national symbol, the bald eagle. For the sake of environmentalist pipe dreams on a large scale, the government has now given permits to kill bald eagles in the industrial process of providing solar and wind energy.

Nothing is stopping the installation of smart meters that harm human health. It is more important for utilities to make a handsome profit at the expense of our health, privacy, and discomfort. Cycling our energy during peak consumption from a remote location will assure that we will have electricity, heat, clean water, and A/C only when Big Brother allows us to have it. Rolling brown-outs and black-outs are no longer a distant possibility. Keep in mind the blackness of satellite photos indicating North Korea at night.

Pepco Holdings, the 100 years old Washington-based utility, sold to the nuclear energy giant Exelon from Chicago for $6.8 billion, is advertising on radio how “power cycling” (read, turning your electricity off for hours in hottest days of summer and coldest days of winter) will make our energy more efficient. Does anyone believe that?

Another environmentalist dream, social engineering - population resettlements and relocation to high density mixed use areas into micro-apartments, a-podments, alley-pods, and stack-able apartments - continues unabated. The most recent development in New York City is sold as post-disaster housing/stackable container homes on a 40’X 100’ parking lot.

http://www.myfoxny.com/story/25350250/nyc-unveils-urban-post-disaster-housing#.U18fe1AMoos.facebook

To discourage driving and encourage bus and rail use, tolls for all interstate highways are now possible. “The Obama administration just lifted a long standing regulation that previously prohibited the creation of new toll plazas on the federal interstate highway system. While pre-existing tolls in states like New Jersey, Pennsylvania, and Virginia were grandfathered in, this change now opens the door for toll collection on the remainder of the 46,876 miles of interstate highway!” https://www.advocacytoaction.com/Campaign.aspx?ID=945

How will this affect Americans? You will likely be unable to operate a car because it will be too expensive to travel on roads that you are already subsidizing with tax dollars. Your mobility will be strongly curtailed in the name of reducing your carbon footprint while the hypocritical elites who shame you into driving tin cans, jet around the globe in personal planes, limousines, huge yachts, and live in huge mansions. The taxpayers will have to fork more money for gasoline, groceries, and other goods that are transported on all toll roads because 67 percent of our domestic goods are transported by eighteen wheelers.

In case you still doubt that UN Agenda 21 is real and consider it a conspiracy theory, my bestselling book, “U.N. Agenda 21: Environmental Piracy,” has plenty of links to help you elucidate the “mystery” hidden in plain sight and connect the dots. http://www.amazon.com/U-N-Agenda-21-Environmental-Piracy-ebook/dp/B009WC6JXO/ref=sr_1_1_title_1_kin/175-9774868-3929929?s=books&ie=UTF8&qid=1399129925&sr=1-1&keywords=UN+Agenda+21%3A+Environmental+Piracy