A question: Mr. Armstrong I have followed your comments on the outlook for inflation for at least the past five years since your friend attended your conference. I must say that you alone have defeated every economic theory I have studied.
Since the start of this pandemic in 2020, the most prominent neoliberal economic voices have warned of the danger that spending will lead to inflation. As a share of GDP, the United States has spent more than any major economy on the planet. There was a mixture of direct payments to citizens, revocable loans to small businesses, and then new federal spending linked to the pandemic. However, the data showed that inflation in the UK was close to 10% and that European inflation rates were higher. Each of the G7 countries has higher inflation rates than the United States. This has raised questions about the possibility of a disconnect between the rationale behind the tightening of US monetary policy and the actual causes of persistently high inflation.
Your favorite economist, Larry Summers, warned almost from the start of the fiscal response that this could trigger inflation. At first it seemed right. However, by the beginning of 2022, the inflation rate in the United States exceeded the average of the OECD countries. However, here in 2022, inflation outside the United States now exceeds all American levels, and the expectations of neoliberal economic thought are open to doubt about its outcome.
Your argument against the quantity theory of money appears to be justified. Since the US has printed so much more money than other economies, how could the US have had the lowest inflation rates? The debate in some circles has attempted to explain that in the beginning, American incentives remained overshadowed by non-monetary factors such as shortages. These have been years anticipating you in advance.
Now, even wages have risen significantly since unemployment benefits ended to adjust to rising inflation. However, employment has not yet recovered for workers of adult age compared to 2019 levels.
I understand that you are not interested in teaching at the university. Perhaps it is time to write a textbook to provide a better view of the complexity of the global economy. Obviously we are in a new area.
Interested in explaining how inflation is significantly higher outside the US despite the fact that the US has expanded its money supply more than any other country?
Answer: I know this is a very complex question that most people, no less than politicians, would like to think about. Aside from COVID and the supply chain, Biden and Green’s attack to end fossil fuels is just downright insane. The United States was self-sufficient under Trump. Biden has done everything to undermine it and they have no idea what they are doing. They are making the American economy vulnerable. However, outside the United States, countries Not Self-sufficient, and the higher you advance in the ranking, the more of its inhabitants living side by side.
Europe has no energy. This push by the Greens in Germany and Austria is just downright crazy. Remove Putin in Russia, and you will have a hard-line alternative who will see that this is the moment to take over Europe, Europe has tried to invade Russia twice before. Cutting power to the Greens has left Europe vulnerable, which is drooling from neoconservatives and NATO over the use of their games in the end.
Gasoline is sold in Europe by liters. One gallon = 3.7 liters. Since gasoline in Europe is around €2.07, now it’s €7.82, it’s now about $8.21 up to $10 a gallon compared to the US national average of $4,642.
The dramatically higher energy cost in Europe drives up inflation dramatically in Europe because it also turns into the cost of transporting everything, right down to food. The inherent problem we always have is that we tend to judge everyone else by ourselves. The world is really different outside of the United States. In Japan, a gallon of gasoline costs 646.548 JPY. Japan, instead of taxing gasoline, is subsidized by the government at about 100 yen per gallon. Thus, the consumer pays the same as the American citizen.
The higher the cost of fuel, the higher the inflation, at least until the Greens force everyone to cycle, stop heating their homes in the winter, and truck drivers back to horses and carriages.
While we have Klaus Schwab claiming that inequality is a big problem, and we have to go back to his world of equality, it’s clear that he never thought of anyone outside his circle. The world is vast. Perhaps we should take all his wealth so that he will be equal in wealth with a goat herder in Africa. I am sure this will solve all the problems of the whole world.