Economics

More indications of economic damage from shutdown.

Federal judge ruled the moratorium is a flagrantly illegal power grab. Image courtesy of Adobe Stock.

A bit of good news to go with the ongoing indications of economic destruction.

  • Federal judge ruled the CDC can’t force landlords to provide no-cash-payment housing.
  • Black homeowners having more difficulty getting back on track with mortgage payments than other ethnic groups. Economic impact of shutdowns are falling disproportionately hard on minorities.
  • Rent prices in New York City continue in freefall.

5/6/21 – Foundation for Economic Education – A Federal Judge Just Struck Down One of the CDC’s Most Blatant Power Grabs – The Centers for Disease Control assumed for itself the power to prohibit evictions of renters because they were not paying rent.

No, although it may be your first reaction, that is not socialism. The government telling you what to do with your property, how much to produce, and controlling the price you can charge, thus converting the property into de facto government property, actually falls into the definition of the economic system of fascism.

Article reminds us that in 9/20, CDC issued an order that non-paying tenants cannot be evicted in most situations. Serious penalties involved.

The extreme rationalization to grab this power was shut down by a federal judge on 5/5/20.

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By Jim Ulvog, ago

It’s time to start monitoring inflation.

(This discussion is cross-posted from my other blog, Attestation Update. The primary audience for this discussions is CPAs, so we can start to monitor the inflation data. This allows us CPAs to better understand what is going on with our clients when providing audit or review services. The information is also useful for readers of this blog, because the rapid run-up of inflation fears is a risk to economic freedom. A return to the devastating inflation rates of the 1970s would severely harm our economic freedom.)

As CPAs, we pay attention to economic trends because those have big impact on our client’s operations.  Understanding what is happening in terms of interest rates, growth or shrinkage in the GDP, unemployment trends, and real estate prices also helps us interpret financial statements during and audit or review.

It is time to start monitoring inflation rates.

Graph at the top of this post shows worrying information about inflation.

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By Jim Ulvog, ago

More indications of health consequences caused by economic shutdown.

How many more advanced cancer cases and how many more cancer deaths will we see because of the economic shutdown? Image courtesy of Adobe Stock.

A few of the recent articles pointing to health consequences from shutting down the economy:

  • Flu bug has essentially disappeared.
  • Rapid increase in alcohol deaths in England and Wales during the lockdown.
  • One study finds being at home is more dangerous than being at work.
  • Three articles point to the harsh medical consequences of the drop in cancer screenings; people are dying because of lack of access to health care during the lockdown.

I hope someday there will be accountability for the politicians and public health officials who put us in this place.

4/29/21 – Scientific American – Flu Has Disappeared Worldwide during the Covid Pandemic – Since the Covid pandemic began the incidents of influenza have shrank to level of inconsequential. One expert is quoted as saying there is “no flu circulating.”

Tally of deaths in the United States from influenza:

  • 34,000 – 2018-2019 flu season
  • 22,000 – 2019-2020 flu season
  • 600 – 2020-2021 flu season, yes 600

Article has graph of influenza cases per week in North America. Graph of the previous eight flu seasons shows huge spike a couple months ago. The graph for the 2021 flu season is a flat line indistinguishable from zero. Looking at the graph you assume that flu has completely disappeared from North America.

“Experts” mentioned in the article unanimously attribute the disappearance to the same protocols used in an attempt to limit Covid infection – wearing masks, washing hands, frequent use of hand sanitizers, and social distancing.

Amusingly, missing from the article is even the mere possibility of considering that there might perhaps be the option of miscoding or erroneous diagnosis. There is no hint that could even possibly happen.

5/6/21 – Lockdown Skeptics – Alcohol Deaths Rise to Highest Level Since Records Began in England and Wales – Deaths from alcohol abuse have been rising for many years in England and Wales. However, there is a 20% increase in 2020 over 2019 with most of the acceleration happening after the lockdown began.

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By Jim Ulvog, ago

Side-effects of lockdown: increasing suicides, higher unemployment.

Image courtesy of Adobe Stock.

The devastating side-effects from government-imposed lockdowns keeps growing. The lack of benefits and damage from lockdowns is becoming more obvious with every week that passes.

Merely a few of the recent articles in the news:

  • Suicide attempts amongst youth increasing.
  • Long-term care residents in Canada remain in solitary confinement in spite of 90% of them having been vaccinated.
  • Unemployment rate higher in states with harsh lockdowns, lower in states with freedom.

3/16/21 – Foundation for Economic Education – Child Suicide is Becoming an “International Epidemic” Amid Restricted Pandemic Life, Doctors Warn – Associated Press interviewed a British doctor who works in an ER.  Number of suicide attempts he is treating has gone from a couple a week before the pandemic started to several a day now.

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By Jim Ulvog, ago

Cost of the devastation caused by closing schools.

Image courtesy of Adobe Stock.

To the extent there was ever justification for closing schools, emerging research demonstrates it has been an extremely long time since any such justification evaporated. Research from Wharton shows the severe, lifelong cost of losing out on two or three semesters of education.

This is the fifth in a series of posts reminding us we have completed one year of “fifteen days to smooth the curve.” In California, we have started our second year of curve smoothing.

10/12/20 – Penn Wharton School of University of Pennsylvania, Budget Model website – Covid: Trade-offs in School Reopening – Detailed economic analysis is thoroughly devastating to any argument there is any value in keeping schools closed and in fact there are substantive questions whether there was any value to closing any schools.

Summary

There will be permanent damage to the education level of most students with a serious adverse impact on lifetime earnings with a disproportionate impact on kids who are poor kids, disadvantaged kids, and persons of color.

Read the full article. Please.

Recap of the highlights

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By Jim Ulvog, ago

Back (reverse) of Venezuelan currency, 2007 – 2017

Reverse of 100,000 Bolivares paper currency. In 8/12 this would have been worth $10,000. In 9/15, only $125. By 12/17, it was worth $0.90. In 12/18, seven of these would have been worth a US penny.

Before we use Venezuelan Bolivares currency to show the devastation of hyperinflation, let’s finish looking at the currency.

Previous post showed the front (obverse) of 2 through 100,000 Bolivares paper money.

Now let’s look at the back (reverse).

The reverse side shows various wildlife.

2 – dated 12/27/12 – Toninas

5 – dated 5/24/07, Cachicama gigante, giant cachicamo

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By Jim Ulvog, ago

Front of Venezuelan currency (obverse), 2007 – 2017

Reverse of 100,000 Bolivares paper currency. This is now worthless. In 12/20, one US dollar could get you 1.2 MILLION of these.

To illustrate the devastation from hyperinflation, we will now use Venezuelan Bolivares currency to see what it looks like in terms of paper currency.

To start, we will look at the currency itself.

As usual for currency outside the U.S., the paper money of Venezuela are esthetically beautiful. All the bills are colorful with lovely illustrations. All the ones we will now see have a nice sized watermark at the otherwise empty space. The watermarks are same face at the bottom of the obverse (front).

Portraits on the obverse of the currency are patriotic reminders of the struggle for Venezuelan independence.

To start our pictorial excursion, here are the obverses of the 2 Bolivar through 100,000 Bolivar currency:

2 – dated 12/27/12, featuring Francisco de Miranda, his efforts for independence in South America failed; he served as forerunner of Simon Bolivar.

5 – dated 5/24/07, featuring Negro Primero

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By Jim Ulvog, ago

This is hyperinflation, Venezuela edition. Expected devastation from socialism. Part 4.

Final graph in this series of posts showing the devastating hyperinflation currently running loose in Venezuela will combine two sets of data.

Purpose of doing so is to see if the two sets of data overlap so that there is some good longer-term information that can be used into the future. The source for current data only goes back to late 2020.

Graph at the top of this post shows exchange rate of Venezuelan Bolivars into US dollars between June 2019 and March 2021. This graph is expressed in Bolivar soberanos (Bv.s).

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By Jim Ulvog, ago