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Today we are featuring the winning essays in the Student Essay Contest for undergraduates at the Austrian Economics Research Conference.

High inflation is costing Americans an extra $1K a month

By Megan Henney

Inflation is once again gaining steam, forcing the average American to shell out a lot more money for everyday necessities.

The typical U.S. household needed to pay $227 more a month in March to purchase the same goods and services it did one year ago because of still-high inflation, according to calculations from Moody’s Analytics chief economist Mark Zandi shared with FOX Business.

Americans are paying on average $784 more each month compared with the same time two years ago and $1,069 more compared with three years ago, before the inflation crisis began.

The analysis suggests that while inflation has fallen from the highs of mid-2022, many families have yet to see material relief.

“Inflation has not just stalled, but it is moving in the wrong direction,” said Lisa Sturtevant, chief economist at Bright MLS.

The Labor Department said Wednesday that the consumer price index (CPI), a broad measure of the price of everyday goods including gasoline, groceries and rent, rose 0.4% in March from the previous month. Prices climbed 3.5% from the same time last year, above the 3.2% figure recorded in February.

However, when compared with January 2021, shortly before the inflation crisis began, prices remain up a stunning 18.94%.

Inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent.

https://www.foxbusiness.com/economy/high-inflation-costing-americans-extra-1k-month

The Diocese of Mananthavady, in the southern state of Kerala, released a statement addressed to all parties regarding issues affecting Wayanad constituency, like the lack of infrastructure, schools, and hospitals. Gandhi spoke about the same things during a rally but also attacked the ruling party's ideology.

Can you be a loving heresy-hunter? https://youtu.be/4XzAemSZR4M?si=XSdy90dGwVnfq7sl  

Can you be a loving heresy-hunter? https://youtu.be/4XzAemSZR4M?si=XSdy90dGwVnfq7sl  

Bastiat sought to abolish "the entire army" with the exception of "some specialized divisions" which would have to be staffed with volunteers since Bastiat also sought to abolish conscription.

Steyn on this week's Trump trial...

It was the payment of a ransom that helped free the ship, the crew were hostages of Somali pirates. The cargo ship is now on its way to Dubai escorted by EU naval forces. Work is in progress for the release of the 25 people working on the MSC Aries, which was detained by the Iranian Revolutionary Guards. India demands the release of its 17 citizens on board

Prime Minister Anwar Ibrahim chaired a two-day meeting of the National Security Council. In a statement, he backs Iran's 'legitimate act' against Israel's 'barbaric' raid on its embassy. The Philippines express "great concern" over rising tensions, which have impacted air travel in the region.

An Italian study poses some conclusions as the why there is a catastrophic decline in the practice of Catholicism in Italy. You can read a summary of that study HERE.

In part, it states that women are ceasing to practice Catholicism the way more so than men in Italy. I am not sure this can be blamed on the liturgy, but on progressive Catholicism’s bowing to secular secularism and promoting an anthropology of marriage and Holy Orders at odds with Catholic identity. Women are told that one day they can be bishops, priests and deacons and that the LGBTQ+++ ideology will triumph over traditional Catholic morality. 

We know in liberal Protestantism which approves of all these things, especially in the inverted image of Catholicism found in the Anglican Communion, that approving of all of this has not stopped the bleeding numbers leaving that communion but increased it. They have no identity as a Christian communion any longer compared to more traditional and orthodox forms of Protestantism.

But the study also blames the revision of the Mass and the loss of Catholic liturgical identity. I found this part rather fascinating:

Exploring the possible causes of such a catastrophic abandonment of Catholicism in a land which lies at the heart of the Church, the Roman professor surmised that among the likely causes are the liturgical abuses and upheavals to which the Church in Italy has been subjected. He particularly pointed to the “progressive spectacularization of Vatican liturgies that has occurred over the past three pontificates” in Rome, as well as the liturgical innovations with which Italian clergy have scandalized faithful Catholics.  

“Many of the nominally still highly institutionalized and centralized (‘liturgy-centered’) rituals may now have been transformed, in part or entirely, into ‘performance-centered rituals.’” Diotallevi wrote. “For Catholic liturgies, a push in this direction may also have come from the progressive spectacularization of Vatican liturgies that has occurred over the past three pontificates, from the substantial deregulation of increasingly large sectors of ‘Catholic’ liturgical offerings, as well as from many of the solutions adopted by clergy during the lockdowns that have recently taken place to counter the spread of COVID-19 pandemic.” 

The public liturgical abuses that Italy has seen in recent include a Mass sacrilegiously offered on a surf board, in the water, at the beach, with the priest bare-chested, an outrage that prompted local civil authorities to consider charging the priest with the crime of a public offense against religion. Another priest offered Mass at a park in a rainbow “pride” stole and a skin-tight cycling outfit, and joked when hosts were blown by the wind onto the ground after the consecration. 

My own experience with the Modern Mass and my own changing attitudes about it are somewhat summarized in the quote above. Music is horrible and there is no tradition of Catholic music as it constantly changes. Gregorian chant is rare in the Modern Mass. Contemporary sounds constantly changing are prevalent. Liturgies are sloppy and banal. Homilies long and dismal. 

But, where the liturgy is “done well” this means you have what is written above. The Mass is “spectacularized” with triumphal music, loud instrumentation, trumpets, tympani and cymbals. I have heard this for ordinations and weddings. It’s all veneer and no substance. 

I can compare that to a EF or OF Mass celebrated with only Gregorian Chant for the propers and parts of the Mass even if the core parts of the Mass are in the vernacular.  The Traditional chanted Mass is sober, filled with spirituality and devotion and not geared toward shallow entertainment and music used to excite hormones.   

The Traditional Latin Mass bespeaks of Catholic identity now lost in the Modern Mass. The Modern Mass is so Protestantized that many can’t tell the difference between a Catholic Mass, an Anglican or Lutheran liturgy. Catholics attending a Lutheran or Episcopal Liturgy would say that there are no differences. Most Catholics now receive Protestant communion when attending a Protestant liturgy/service. And they like their music better. 

And now some Catholic parishes are trying to imitate the music and style of worship of the Non-denominational churches. Praise and worship music which is fad oriented and constantly changing and like a rock concert or any other kind of concert is mimicked in the Catholic Mass. Anyone immersed in this nonsense in a Catholic Mass would feel at home in a non-denominational setting and more than likely to prefer the Protestant version of their service verses the “catholic” one. 

Everything that progressive Catholicism has touched has ended in disaster. Think of the once great women’s religious orders who through synodality dumbed down their life, community, habits and charisma and became a collation of individuals doing their own thing, living alone in apartments and no longer identifiable as religious sisters or nuns. 

That was done to religious life is now on steroids as it concerns the Church in general, synodality, that will accelerate the demise of the Church already declining in so much of Western Europe and Italy in particular. And yet this pope and his progressive cardinals and bishops gleefully go forward with their destructive policies never looking backwards to the evidence that progressivism is the cause for the decline and fall of this particular Roman Empire. 

June 20-22, at St Mary’s University in London: Register Today.My friend Fr Andrew Marlborough sent me information about what promises to be a great conference, which he is helping to organise, on “The Royal Priesthood and the Renewal of the Church”. Readers may recognise his name from articles of his which we have shared here on sacred art and artefacts appearing in auction houses in the UK and David Claytonhttp://www.blogger.com/profile/07041908477492455609noreply@blogger.com0

There has been much hysteria over the rise of artificial intelligence, much of it overblown and downright silly. No, AI is not about to impose tyranny on helpless humanity. Like all other technology, AI is a tool that can be used for good or ill.


The Great Dispossession Part 3

Paul Craig Roberts

In Part 1, I explained that the next financial crisis will be bailed out not with central bank money creation but with our stocks, bonds and bank balances.

In Part 2, I explained the multi-year quiet regulatory changes that dispossessed us of our property.

In Part 3, I explain David Rogers Webb’s conclusion that a massive financial crisis is pending in which our financial assets are the collateral underwriting the derivative and financial bubble and will result in the loss of our assets but leave us with our debts as happened to those whose banks failed in the 1930s.

Webb begins with the economic formula that the velocity of circulation of money times the money supply equals nominal Gross Domestic Product. V x MS = GDP.

The velocity of circulation is a measure of how many times a dollar is spent during a given period of time, e.g., quarterly, annually. A high velocity means people quickly spend the money that comes into their hands. A low velocity means people tend to hold on to money.

Velocity impacts the Federal Reserve’s ability to manage economic growth with money supply changes. If the velocity of money is falling, an expansionist monetary policy will not result in rising GDP. In such a situation, the Federal Reserve is said to be “pushing on a string.” Instead of pushing up GDP, money supply increases push up the values of financial assets and real estate resulting in financial and real estate bubbles.

Webb notes that falls in velocity are precursors of financial crises. A multi-year sharp fall in velocity preceded the stock market crash in 1929 and the Great Depression that gave birth to regulatory agencies. The 21st century is characterized by a long-term fall in velocity that has reached the lowest level on record, while stocks and real estate have been driven to unprecedented levels by years of zero interest rates. When this bubble pops, we will be dispossessed.

Will the bubble pop?

Yes. The Fed suddenly and rapidly moved from zero to 5% interest rates, a reversal of the policy that drove up prices of stocks and bonds. The Fed raises rates by reducing money supply growth, thus removing the factor supporting high stock prices and collapsing the value of bonds. This results in a lowering of the value of stocks and bonds serving as collateral for loans, which, of course, means the loans and the financial institution behind them are in trouble. Bonds have already taken a hit. The stock market is holding because participants believe the Fed is about to reverse its interest rate policy and lower rates.

Webb notes that the official data show that the velocity of money collapsed in the 21st century while the Fed introduced “quantitative easing.” He makes the correct point that when the velocity of money collapses, the Fed is pushing on a string. Instead of money creation fueling economic growth, it produces asset bubbles in real estate and financial instruments, which is what we have at the present time.

When after more than a decade of near zero interest rates, the Fed raises interest rates it collapses the values of financial portfolios and real estate and produces a financial crisis.

As the authorities have set in place a system that bails out secured creditors with our bank deposits, stocks, and bonds, we will have no money and no financial assets to sell for money. People with mortgaged homes and businesses will lose them, as they did in the 1930s, when they lost their money due to bank failures. People with car payments will lose their transportation. The way the system works is you lose your money but not your debts.

The secured creditors are the creditors of the troubled institutions. Ultimately, the secured creditors are the mega-banks defined as “privileged creditors.”

The collapse of financial asset values in 1929 resulted in the failure of 9,000 banks (https://www.encyclopedia.com/economics/encyclopedias-almanacs-transcripts-and-maps/banking-panics-1930-1933). Bank failure meant that you lost the money you had in the bank. It means the same thing today regardless of deposit insurance, because your deposits have been turned into collateral for creditors. Moreover, FDIC deposit insurance is a joke. The FDIC’s assets are in the billions. Bank deposits are in the trillions. The Dodd-Frank Act prioritized derivatives over bank depositors, so a bank account holder is in line behind derivative claims. Apparently, FDIC insurance claims will be issued in the form of issuance of stock in a failed bank.

It has all happened before, but not on the scale of what is pending.

Under the regulatory regime in place, financial collapse today means that money will be drained from the economy and be concentrated along with all wealth in a few hands. A modern-day economy cannot function without money and without companies that serve as distributors of food, goods, and services. Webb notes that it is a perfect opportunity for central banks to introduce Central Bank Digital Currency (CBDC) with which they have been experimenting.

The provision of CBDC to the population would provide a money supply and income to a population in total chaos and restore order to a grateful population. But it would also give total control to rulers. Webb quotes Augustin Carstens, general manager of the Bank for International Settlements who says that the key difference between present day currency and Central Bank Digital Currency is that with CBDC the central bank will know how each person uses their allotment of digital currency which gives the central bank absolute control over you via the capability to regulate your purchases, to turn off disapproved purchases, to discipline dissenters. You will be supplied with the means of life as long as you have a good social credit score, which means that you are a non-dissenter of official narratives.

Webb believes that this result is the intent of the regulatory changes and corresponds to the World Economic Forum’s agenda: “you will own nothing.” There is much in the regulatory documents that support Webb’s belief. For example, the Single Resolution Board’s 2022 Guidance for Banks to prepare for “solvent wind-down,” is an indication that an event is in the works. The Single Resolution Board’s Work Program 2023 states: “The year 2023 will be the last of a transitional period for the establishment of the main elements of the resolution framework in the Banking Union.” In other words, everything is in place.

Whether Webb is correct that the regulatory regime that has been put in place amounts to a deliberate restoration of feudalism under high tech management or whether the new rules are the unintended consequence of the rulers’ drive for security is not important. The relevant point is that the next financial crisis will dispossess us not only of our pensions and financial assets but also of our freedom and independence. If the past is a guide, the next financial crisis is close at hand.

If the mega-rich and the large financial intermediaries can be made aware of the situation, it is in their own self-interest to convince Congress to use its law-making power to unwind the regulatory system of dispossession that has been created. But the hour grows late.

Ordinary people are dismissive of the World Economic Forum and its agenda of “you will own nothing and be happy,” but this is a mistake. The WEF was founded 53 years ago and has over the half century recruited many of the important people in business, finance, and politics. If you are not a WEF member and attendee at Davos, you are lower down on the totem pole. Social, political, and intellectual standing depends on membership. It is important to understand that The Great Reset means the re-institutionalization of feudalism.

Note that we are also being dispossessed of our food and farmers of the use of their land: “No Farmers No Food: Will You Eat The Bugs?” is an Epoch Original documentary exposing the hidden agenda behind global “Green Policies,” the untold stories of farmers forced out of business, the disruption this will have on our food supply, and why edible bugs are suddenly being pushed to the fore as a “Global Green Solution.”

EpochTV program “Facts Matter” host Roman Balmakov investigates the rapidly changing landscape of our global food source—the farming industry—through interviews with farmers in The Netherlands, Sri Lanka, and the United States. This is the next global crisis that is being ignored by the world’s media.

Democrat Prosecutors, Judges, and Media Are Interfering in the November Presidential Election

Paul Craig Roberts

From the beginning it has been completely clear that the criminal and civil indictments of Trump have the purposes of using up his energy, money, and time so that he cannot campaign and of discrediting him with the insouciant part of the population that is stupid enough to have faith in the “justice system.”

The trials themselves and the words of the prosecutors and judges prove it.

The black Democrat New York District Attorney Alvin Bragg, put into office by anti-Trump billionaire George Soros, who Elon Musk says hates humanity (which means gentiles), has concocted a criminal case against President Trump for “falsifying business documents” that legal scholars dispute. Apparently, Bragg cares not a whit about his reputation, only about preventing Trump from campaigning. Bragg contends that Trump should have reported his $130,000 payment to porn star Stormy Daniels as a campaign contribution to himself and not as legal fees. But, of course, it would have been one of Trump’s lawyers or CPA who filled in the form. A person of Trump’s wealth leaves such decisions to professionals and does not himself navigate complicated and risky forms. Regardless, there is nothing illegal whatsoever in making extortion or bribery payments to a porn star so that she doesn’t make harmful accusations. It is a much cheaper solution than suing for slander.

You should understand that there is nothing illegal about Trump’s payment to the porn star. The payment is perfectly legal. Trump is not charged with making an illegal payment. He is charged with reporting it differently than a black quota hire, clearly incompetent, George Soros DA alleges Trump should have reported it. The whore media has not made this clear to the public. Instead the presstitutes have planted the idea that it is the payment that is the criminal action.

In law the charges against Trump are misdemeanors, not crimes. Trump’s black enemy has in an unspecified way elevated the charges to a felony. Increasingly prosecutors do this. They create felonies out of thin air by stretching the interpretation of law beyond its meaning. Prosecutors know that by the time a wrongly convicted defendant reaches the point that he can appeal the wrongful conviction to a higher court he will have run out of money and energy and will make a plea to a lessor charge. In Trump’s case, the black DA knows that given the slowness of the system Trump will be in court for years appealing wrongful decisions. As corrupt prosecutors suffer no punishment for their crimes against defendants, there is no barrier to their legal abuse of law–particularly when they are in court with a biased judge and have a biased jury.

This first of 4 criminal trials began yesterday. Estimates are that the show trial will keep Trump in court for four days a week for the next six or more weeks. Clearly this is election interference and nothing else.

The other criminal trials are in various stages of disrepair. Fani Willis, the black Democrat Atlanta DA who has brought RICO charges against Trump and his attorneys is in trouble herself for paying her lover $700,000 of taxpayers’ money and using the money for vacations. She apparently is another George Soros plant and is shielded by the Democrat machine. She has had to remove her lover from Trump’s case, but is unlikely to suffer any consequences other than embarrassment.

A New York civil case orchestrated by a black Democrat attorney general and a Trump-hating Democrat judge confiscated Trump’s NY real estate empire. In order to delay the confiscation until his higher court appeal is decided, the two required Trump to post a $500 million payment that would have depleted his cash for his political campaign. The payment was seen as a form of extortion, and the corrupt AG and judge had to reduce it to $175 million.

Clearly, these are not normal trials or normal charges. The law schools, bar associations, Congress and the whore media don’t even raise questions about the show trials that clearly constitute election interference. As I have said many times, the system will not permit Trump’s return to office.

Americans need to understand that their country has been stolen from them and that the ruling elite are not going to permit Trump to give it back to them.

https://www.theepochtimes.com/us/historic-new-york-vs-donald-j-trump-trial-starts-in-manhattan-5629545?utm_source=RTNews&src_src=RTNews&utm_campaign=rtbreaking-2024-04-15-2&src_cmp=rtbreaking-2024-04-15-2&utm_medium=email&est=AAAAAAAAAAAAAAAAceE5JjMFys3H%2BbdAvWpUcQzPZ0WlGLZbDFlFfmdQNQ%3D%3D

https://lists.youmaker.com/archive/ZgEeMVUg5w/usJwMxGAB/MMrV7jDnqk

Zachary Yost reviewed John Mearsheimer and Sebastian Rosato's recent book How States Think: The Rationality of Foreign Policy. While the book is an excellent source of historical reflection, there are grounds to criticize its epistemology on Misesian grounds.

We Englishmen ... I won't presume to speak for the Scots ... are extremely (nowadays everybody says incredibly) insular. This fault was encouraged during my own childhood by talk of a Second Elizabethan Age ... the phantom-heroics of the Age of Elizabeth Tudor were still, in their fictionalised forms, alive and well. It had been a time when Englishmen went to sea and robbed Spanish galleons ... Fr John Hunwickehttp://www.blogger.com/profile/17766211573399409633noreply@blogger.com0

Economic “reflation” is becoming the next bullish narrative as equity valuation increases continue to outpace earnings gains, at least according to Gold Sachs and Tony Pasquariello.

“If GS is correct on the big calls, the macro backdrop is set to remain friendly: the US economy should continue to grow nicely above trend — picking up speed as the year moves along — with three adjustment rates cuts along the way.  to not obscure the moral of that story: the Fed is set to ease policy … into an upswing.  while Fedspeak this week had a somewhat hawkish bent, the house view for 2024 remains intact.”

Interest rates, gold, and commodity prices have increased in the past few months. Unsurprisingly, the bullish narrative to support that rise has gained traction. Interestingly, this “reflation” narrative tends to resurface by Wall Street whenever there is a need to explain the surge in commodity prices. Notably, the last time Wall Street focused on the reflation trade was in 2009, as noted by the WSJ:

“The most talked-about investing strategy these days isn’t stuffing money in a mattress, it’s the reflation trade — the bet that the world economy will rebound, driving up interest rates and commodities prices.”

While that “reflation trade” lasted for about two years, it quickly failed as economic growth returned to 2%-ish growth along with inflation and interest rates. As shown, oil and commodity prices have a very high correlation. The critical reason is that higher oil prices reduce economic demand. As consumption falls, so does the demand for commodities in general. Therefore, if commodity prices are to “reflate,” as shown, such will depend on more robust economic activity.

As such. The reflation trade hinges on a global resurgence of economic activity, usually associated with economies recovering from a recessionary period. However, the U.S. never experienced a recession. As discussed in “Deficit Spending,” despite numerous recessionary signals, like the inverted yield curve, manufacturing data, and leading economic indicators, the economy avoided recession due to massive governmental spending. To wit:

“One explanation for this has been the surge in Federal expenditures since the end of 2022 stemming from the Inflation Reduction and CHIPs Acts. The second reason is that GDP was so grossly elevated from the $5 Trillion in previous fiscal policies that the lag effect is taking longer than historical norms to resolve.”

While economists focus on the “reflation trade,” we must answer whether the support for more substantial economic growth exists. This is the sole determining factor in whether the “reflation trade” can continue.

Is Reflation Already Behind Us?

Interest rates and inflation have ticked up recently, driving investors into gold and commodities. However, the surge in precious metals and commodities is more of a function of speculative exuberance rather than an economic resurgence. As discussed in “Speculative Warnings,”

“In other words, the stock market frenzy to “buy anything that is going up” has spread from just a handful of stocks related to artificial intelligence to gold and digital currencies.“

Notably, the gold, commodities, and interest rate surge corresponded with more robust economic growth beginning in the third quarter of last year. That uptick in economic growth defied economists’ expectations of a recession. Such was because of the massive flood of monetary support from Government spending programs. However, that monetary impulse is now reversing.

As far as the “reflation trade” is concerned, as that monetary impulse recedes, so will economic growth, as shown. Even if the economy continues to grow at 2-2.5% annualized each quarter, the annual rate of change in growth will continue to slow.

Importantly, this assumes that the Government will keep “spending like drunken sailors” over that same period. However, if they don’t, the economic growth rate will slow even more quickly without increasing monetary spending.

It is important to remember that increasing debts and deficits do not elicit stronger long-term economic growth. As debt levels rise, economic growth rates will slow as money diverts from productive investment into debt service.

That reality should be unsurprising, as this is not the first time the Government has gone “all in” on a reflation trade. As noted above, following the Financial Crisis, the Government intervened with HAMP, HARP, TARP, and a host of other spending programs to “reflate” the economy.

Let’s review what happened with interest rates, inflation, and gold and commodity trade.

Past May Be Prologue

As noted in 2009, following the “Financial Crisis” and recession, the Government and the Federal Reserve engaged in various monetary and fiscal supports to repair the economy. While the economy initially recovered from the recessionary lows, inflation, economic growth, and interest rates remained subdued despite ongoing interventions.

That is because debt and artificially low interest rates lead to malinvestment, which acts as a wealth transfer mechanism from the middle class to the wealthy. However, that activity erodes economic activity, leading to suppressed inflation and a surging wealth gap.

During that same period, commodities and precious metals rose initially as the “reflation expectation” was widespread. However, debt-driven realities quickly undermined that assessment and those investments languished relative to equities, as the flood of liquidity and low rates made equities far more attractive to investment.

While the relative performance of precious metals and commodities has picked up in recent months, this is more likely a function of “irrational exuberance” in the financial markets. As discussed previously, the surge in speculative investment activity is not uncommon to markets, and currently, many asset classes are becoming highly correlated.

However, while there is a compelling narrative around gold and precious metals from an investment perspective, those chasing that trade have had many years of terrible underperformance. While this time could be different, the “reflation narrative” will most likely fall prey to the realities of excessive debt, which will pressure Governments to cut rates once again.

If the past is potentially prologue, likely, the bullish narrative of “reflation” may once again find future disappointment. Such is particularly the case as the economics of debt and poor policy choices continue to erode the middle class further.

The post Reflation Trade Is The New Bullish Narrative appeared first on RIA.