In this brief article I would like to explore a theory I have been developing for a while: that the extraordinary level of immigration we have experienced in the past several years is a deliberate exercise in what has been called Human Quantitative Easing
Very interesting point and reasoning. A couple of remarks as food for thought and critique of this theory. I speak from experience in Germany, and are not fully familiar with the situation in UK, but as you write, it is more or less the same in all white countries.
1. Generally, the analogy of "soaking up" of money supply by imported third worlders would mean that money supply remains stable, which it does not, especially not in the EU. 75% of the new arrivals (whom a Green Party "memberette" deemed more valuable than gold) are and will remain on government sponsoring. Also, their number is constantly growing, meaning new influx in these government programs. These can only be maintained by an increase in the money supply, i.e. government debt. Taxation alone does not cut it. Hence, as the supply increases, there is no net soaking up of previously created money supply. It just keeps adding and adding, the soak-up-effect is always one step behind, so to say. If government would want to quantitatively ease existing money supply, they would have at least to reduce the spend per new arrival over time, which it doesn't.
2. Taxation rates have not increased (yet), because this would make the money transfer to new arrivals all the more obvious. Granted, total tax amount received by state has increased, as a second order effect of the inflation the state created (isn't that nice). This back ups the fact that new arrivals require new money coming from debt. Taxation could be more deflationary, but due to it being highly unpopular, the regime has not touched it yet.
3. Total money in the hands of more people does not mean that this has a deflationary effect. Yes, individual spending power goes down. However, let's assume that apples provide a necessary good, without which one cannot live. More people now competing for the same amount of apples would actually mean that prices go up. One has to look closely at the good under consideration whether "money in number of people hands" has an inflationary or deflationary effect. Basic goods most likely will be inflated, given constant or reduced supply. Reality shows, think housing, food, energy.
To conclude, this comes down to a cause-and-effect question. Were new arrivals brought in to reduce the effects of inflation, you would have to see a drop of prices as a consequence.
Rather, I would say, new arrivals contribute to an increase in inflation due to the increased demand (housing being the best example).
What has contributed to the rate of inflation easing over the past two years (prices are still net-increasing) is the manipulation of energy markets, FX markets and bond markets by the BoE, ECB and its minions in the European banks.
The import of millions of third worlders is a goal in and of itself, that the regime (and another force I will not mention, but everybody knows) follows in order to destroy the fabric of white countries and make them more governable for globohomo (at least, that is the regimes theory).
Agreed, short term thinking when logic is used to analyze the actual long term implications, though as a counter it is the logical conclusion of Mass and Scale thinking when it is acceptes as the status quo and is therefore the short term Rationalisation of the now Irrational acceptable Dogma.
You're on the right track here. Where this type of analysis will really shine is if you can connect it to trends in borrowing, especially amongst the new arrivals. It isn't enough to simply have them soak up increases in the money supply; the system desperately needs to lever them up with fresh debt to back the issuance of future money to keep the merry-go-round turning.
The West is showing all the signs of being caught in a debt trap since the 70s, when the monetary system was decoupled from the material economy of gold or energy. Since then, every economic policy has just been kicking the can down the road in one way or another. In the end, they will pull every trick to mask bankruptcy, from replacing attempts to merge sovereigns, inflate populations. The next trick will essentially be the re-imposition of rationing under the guise of CBDCs, or war.
Unfortunately, a monetary system running on interest demanding ever increasing returns is like a control system with infinite positive feedback. It cannot operate in a steady state, but must instead grow exponentially until it falls over. This is a result of the math of control theory that economists would do well to read up on.
The US is in a huge debt trap, but at least they can print money and sell the bonds. The Eurozone economies are dropping in global rankings of PPP because they don't have productive industrial bases any more. Financialization and rent-seeking (off the interest) is feeding the debt cycle trap.
What bureaucrat will make an argument based on control theory? These are think tank policy pitches. As I posted, the elites don't have to care about the external effects. By the time to positive loop kills the economy, different names will be in charge. Yes they are this cynical, in fact even much worse than we can imagine.
It's obvious from AA's analysis as to why the NHS is overrun, the evidence is staring us straight in the face, in the UK the population has increased by at least 7.5% since 2008, however as we can see in the chart above, there's been no increase in apples consumed, which leads to the obvious conclusion...
The general price level is not determined by the ratio between money units and population. It is determined by the ratio between money units offered for exchange and the volume of goods and services offered for exchange.
You used the correct ratio when talking about apples. But then you switched to the wrong one when talking about immigrants.
Population growth eases price inflation only to the extent that the new people add to the production of valuable goods and services.
But I don’t think the West is now selecting immigrants for their productivity.
It's fascinating that the regime is purported to care about the economy and its industry but obviously have few or no qualms about outsourcing most of it out of the West.
Great points. An economy built on usury MUST expand its money supply to provision debt servicing and net profits. Inflation is kept in check by importing people and goods but this can't go on forever. One day the US Navy will be defeated ending the dollar and the entire thing unwound destroying the West while usurers move on.
I did not claim to have invented anything, see and I quote: "It is possible that others have written on this, but I want, in a sense, to ‘get there’ myself, because if multiple people arrive at the same conclusion independently it is usually a good sign of being over target."
Nice to know this exists, I'll read now. No plagiarism intended and I'll add a footnote.
I am not a public forum writer & so only have my word now to assure you,I have spoken to many frens of this exact thing for over a year. I don't store any value for my own insights but am glad & surprised when I see serious people like yourself &AA going on the same trajectory. "Human Quantative Easing" is genius though,well done👍
I don’t think this analysis is quite right. More immigrants means more people consuming goods and services for a given level of output = inflation, not deflation.
The only place you’ll have deflation is in wages. More people means more workers competing in that labor market means labor prices fall. Prices for everything else goes up.
Imagine a country in which everyone suddenly decides to have more children. Would the new births cause an immediate decrease in the general price level, because the ratio of dollars or other money units to population has fallen?
No. People with more kids might spend more on some things and less on others. But the overall price level will not change. And that’s because what determines the general price level is not the size of the population per se. Rather, it is the ratio between money units on the one hand and, on the other, the volume of goods and services available for purchase.
I've been trying to explain this to different groups of friends at the pub multiple times. I've had some success especially when I stick to simple supply and demand aspects but I've never considered new arrivals "soaking" the money.
Could you elaborate on how when a (working) immigrant gets their wage then puts that back into the system how that is de-inflationary? Are we relying on immigrants to be de-inflationary by sending money back home (therefore out of our economy) or is it just as simple that if we all have less money (as per your village example) prices will have to decrease to meet what people can afford.
Also would a general increase of wages for native people allow us to soak this money or would that be a guaranteed way to lead to a inflation spiral?
"Here you will see that over Covid, between 2020 and 2022, there was around a 25 percent increase in the price of apples, as we would expect, but then they came back down just as the government increased the total number of people in Britain through immigration. Notably Jeremy Hunt was imposed as Chancellor during this same period. Since the money supply did not reduce relative to apples, the price was surely brought back down by some other factor. I propose this other factor is the exchange ratio between the M1 Money Supply and the total population, namely the additional 3 million imported since Covid."
I don't quite understand, could you elaborate?
More consumers with no increase in production would be inflationary. More workers competing for jobs with no new jobs would be deflationary. Why would 3 million more imported consumers be deflationary? I assume the items in the minimum monthly cost of living would be affected disproportionately, as the spending of these migrants would be mostly on basic goods and won't affect the demand for items that only the middle class can afford. So, the middle class might have to spend more on basic goods because their prices go up, and now they have less money for middle class items, so middle class items prices go down, but would that result in deflation in total?
"Using these numbers we can see it would take the extra 3 million immigrants only around seven and a half years to ‘soak up’ the new money assuming the money supply is kept relatively stable. Via this mechanism, although each individual British person has been made worse off, as per my village example, the extra people partly offset the inflationary effects of the excess money printing during Covid. I offer this as an explanation for what the government has done, and although I have focused on Britain here, it seems at a glance that similar policies have been pursued in parallel across the Eurozone and in the USA."
I think your hypothesis needs some comparisons between different countries. Some European countries imported a lot of Ukrainian refugees in 2022. Poland imported 5 million of them, for example. What kind of effects on prices did it have there, as compared to other European countries that didn't import any Ukrainians?
The effect is explained by my village example, they have changed the ratio of money and people so that the same amount of money is now spread among more people. Every household therefore has less to spend which should keep a cap on prices. Also in the case of apples, weirdly, immigrants don’t seem to affect demand which is basically unexplained but this is by the by.
In the village example, households have less money to spend, so we would expect them to consume the same amount on necessities (in terms of units consumed), but less on non-necessary items. If you add 3% more households, that's a 3% in demand for necessities (I assume with no increase in supply), which would surely be inflationary for the cost of necessities. Are apples supposed to represent necessities or non-necessary items?
My guess is the low-IQ immigrants eat primarily the cheap, crappy food produced by Big Ag. Fruit is seen as a luxury item because it’s relatively expensive now.
There was a case recently where someone re-ordered the same basket of food from Wal-Mart he bought in 2019 for $140, and it’s $410 now. So there has been a definite supply shock and price squeeze on food. Perhaps the elites have been gambling that food was super cheap before and therefore the proles could tolerate a big increase… or just didn’t care.
Then if this was indeed "an attempt to offset inflation from printing money" it would be a failure. It can't offset inflation if it would result in the price of necessities going up. That's creating inflation, not offsetting it.
We need a chart for historic minimum monthly cost of living. Volume of apples sold and apple prices are not sufficient.
A different way to look at this is that if the people and hence economy doubles, then the money supply will have to double as well to maintain equilibrium. Otherwise prices fall.
The general price level is based on (1) the volume of money units chasing (2) the volume of goods and services available for purchase. Unless you change either (1) or (2), the general price level will not change. Households as such, and population as such, are not part of this.
A married couple, both of whom are working, divorces. One household becomes two. Prices generally go down? Of course not. Money volume is the same; economic production is the same.
A married couple has a baby. Two people become three. Prices generally go down? Of course not. Same number of money units, same economic production. The couple spends more on some things and less on others, so relative prices may change. But no general inflation or deflation.
Incorrect, and beyond that the example of the divorce and a baby is idiotic in this context where we are talking about increasing the number of working age people.
If the amount of goods is increased relative to the amount of money, as happens if the economy is doubled, prices fall. This is what historically happened during the gold standard. Get out now.
Academic Agent's argument was not that immigration will hold down prices by increasing economic production. It was that immigration will hold down prices because the decrease in the money-to-population ratio leaves each person with less money to spend, causing demand to fall. That was the fallacy I was responding to.
In my first sentence of my last comment, I said that the price level is based on the ratio between the volume of money and the production of goods and services. So obviously I agree with you that increasing production will drive down prices.
The divorce and baby examples show that the number of households as such, and the population as such, do not determine the general price level. I said this because I was assuming you had read AA's post.
Dude, I know full well that the gold standard was deflationary. And I support it for that reason. Next time you might consider that a perceived disagreement is based on a misunderstanding, rather than that the other person is stupid.
Great piece! I’m convinced most modern problems are downstream of the money printer. Check out https://wtfhappenedin1971.com (in 1971 the US went off the gold standard)
Very intriguing. But I would suggest analyzing luxuries and necessities differently. Here in USA, the illegals don’t buy Mercedes cars or houses in Beverly Hills but they buy a lot of food and rent apartments.
In your apple example, an influx of immigrants would RAISE the price of apples because people need to eat. That is precisely what has happened to food and apartments in the USA.
Very interesting point and reasoning. A couple of remarks as food for thought and critique of this theory. I speak from experience in Germany, and are not fully familiar with the situation in UK, but as you write, it is more or less the same in all white countries.
1. Generally, the analogy of "soaking up" of money supply by imported third worlders would mean that money supply remains stable, which it does not, especially not in the EU. 75% of the new arrivals (whom a Green Party "memberette" deemed more valuable than gold) are and will remain on government sponsoring. Also, their number is constantly growing, meaning new influx in these government programs. These can only be maintained by an increase in the money supply, i.e. government debt. Taxation alone does not cut it. Hence, as the supply increases, there is no net soaking up of previously created money supply. It just keeps adding and adding, the soak-up-effect is always one step behind, so to say. If government would want to quantitatively ease existing money supply, they would have at least to reduce the spend per new arrival over time, which it doesn't.
2. Taxation rates have not increased (yet), because this would make the money transfer to new arrivals all the more obvious. Granted, total tax amount received by state has increased, as a second order effect of the inflation the state created (isn't that nice). This back ups the fact that new arrivals require new money coming from debt. Taxation could be more deflationary, but due to it being highly unpopular, the regime has not touched it yet.
3. Total money in the hands of more people does not mean that this has a deflationary effect. Yes, individual spending power goes down. However, let's assume that apples provide a necessary good, without which one cannot live. More people now competing for the same amount of apples would actually mean that prices go up. One has to look closely at the good under consideration whether "money in number of people hands" has an inflationary or deflationary effect. Basic goods most likely will be inflated, given constant or reduced supply. Reality shows, think housing, food, energy.
To conclude, this comes down to a cause-and-effect question. Were new arrivals brought in to reduce the effects of inflation, you would have to see a drop of prices as a consequence.
Rather, I would say, new arrivals contribute to an increase in inflation due to the increased demand (housing being the best example).
What has contributed to the rate of inflation easing over the past two years (prices are still net-increasing) is the manipulation of energy markets, FX markets and bond markets by the BoE, ECB and its minions in the European banks.
The import of millions of third worlders is a goal in and of itself, that the regime (and another force I will not mention, but everybody knows) follows in order to destroy the fabric of white countries and make them more governable for globohomo (at least, that is the regimes theory).
Yes these are all good points. I should have said that all this is extremely short-term thinking by elites and long-term you’re right on every score!
Over the long run and over large numbers immigration equals invasion. Has this principle been coined, if not we should do so.
This is the core problem in the economic arguments, they ignore factors which are far more important than the economy itself.
Vox Day always says immigration is invasion, along with the other adage "sink the damn ships."
Agreed, short term thinking when logic is used to analyze the actual long term implications, though as a counter it is the logical conclusion of Mass and Scale thinking when it is acceptes as the status quo and is therefore the short term Rationalisation of the now Irrational acceptable Dogma.
Your final paragraph sums it up perfectly sir. 👍
You're on the right track here. Where this type of analysis will really shine is if you can connect it to trends in borrowing, especially amongst the new arrivals. It isn't enough to simply have them soak up increases in the money supply; the system desperately needs to lever them up with fresh debt to back the issuance of future money to keep the merry-go-round turning.
The West is showing all the signs of being caught in a debt trap since the 70s, when the monetary system was decoupled from the material economy of gold or energy. Since then, every economic policy has just been kicking the can down the road in one way or another. In the end, they will pull every trick to mask bankruptcy, from replacing attempts to merge sovereigns, inflate populations. The next trick will essentially be the re-imposition of rationing under the guise of CBDCs, or war.
Unfortunately, a monetary system running on interest demanding ever increasing returns is like a control system with infinite positive feedback. It cannot operate in a steady state, but must instead grow exponentially until it falls over. This is a result of the math of control theory that economists would do well to read up on.
The US is in a huge debt trap, but at least they can print money and sell the bonds. The Eurozone economies are dropping in global rankings of PPP because they don't have productive industrial bases any more. Financialization and rent-seeking (off the interest) is feeding the debt cycle trap.
What bureaucrat will make an argument based on control theory? These are think tank policy pitches. As I posted, the elites don't have to care about the external effects. By the time to positive loop kills the economy, different names will be in charge. Yes they are this cynical, in fact even much worse than we can imagine.
For the elite, The Revolution of Mass & Scale cannot go into reverse.
Well what are we waiting for? The line must go down!
Good Morning John, hope all is well.
The Irrational side based on the Momentum of the Ideas of the Past no long gone.
It's obvious from AA's analysis as to why the NHS is overrun, the evidence is staring us straight in the face, in the UK the population has increased by at least 7.5% since 2008, however as we can see in the chart above, there's been no increase in apples consumed, which leads to the obvious conclusion...
The general price level is not determined by the ratio between money units and population. It is determined by the ratio between money units offered for exchange and the volume of goods and services offered for exchange.
You used the correct ratio when talking about apples. But then you switched to the wrong one when talking about immigrants.
Population growth eases price inflation only to the extent that the new people add to the production of valuable goods and services.
But I don’t think the West is now selecting immigrants for their productivity.
It's fascinating that the regime is purported to care about the economy and its industry but obviously have few or no qualms about outsourcing most of it out of the West.
Great points. An economy built on usury MUST expand its money supply to provision debt servicing and net profits. Inflation is kept in check by importing people and goods but this can't go on forever. One day the US Navy will be defeated ending the dollar and the entire thing unwound destroying the West while usurers move on.
Absolutely astounding plagiarism for you to claim you invented the term, given I wrote pieces that defined it in April and February of this year.
https://thecritic.co.uk/the-follies-of-human-quantitative-easing/
https://conservativehome.com/2024/02/16/tom-jones-immigration-and-the-recession-our-stagnant-economy-needs-to-be-weaned-off-its-addiction-to-human-quantitative-easing/
I did not claim to have invented anything, see and I quote: "It is possible that others have written on this, but I want, in a sense, to ‘get there’ myself, because if multiple people arrive at the same conclusion independently it is usually a good sign of being over target."
Nice to know this exists, I'll read now. No plagiarism intended and I'll add a footnote.
Yes. I’ve heard this idea of “printing labor” in a few places too. Makes total sense.
I am not a public forum writer & so only have my word now to assure you,I have spoken to many frens of this exact thing for over a year. I don't store any value for my own insights but am glad & surprised when I see serious people like yourself &AA going on the same trajectory. "Human Quantative Easing" is genius though,well done👍
Silly billy
I don’t think this analysis is quite right. More immigrants means more people consuming goods and services for a given level of output = inflation, not deflation.
The only place you’ll have deflation is in wages. More people means more workers competing in that labor market means labor prices fall. Prices for everything else goes up.
I appreciate the author’s taking a stab at this topic but I don’t think economic analysis is his forte :/
Imagine a country in which everyone suddenly decides to have more children. Would the new births cause an immediate decrease in the general price level, because the ratio of dollars or other money units to population has fallen?
No. People with more kids might spend more on some things and less on others. But the overall price level will not change. And that’s because what determines the general price level is not the size of the population per se. Rather, it is the ratio between money units on the one hand and, on the other, the volume of goods and services available for purchase.
That may be how they justify it, but I think it's just the Kalergi plan.
I've been trying to explain this to different groups of friends at the pub multiple times. I've had some success especially when I stick to simple supply and demand aspects but I've never considered new arrivals "soaking" the money.
Could you elaborate on how when a (working) immigrant gets their wage then puts that back into the system how that is de-inflationary? Are we relying on immigrants to be de-inflationary by sending money back home (therefore out of our economy) or is it just as simple that if we all have less money (as per your village example) prices will have to decrease to meet what people can afford.
Also would a general increase of wages for native people allow us to soak this money or would that be a guaranteed way to lead to a inflation spiral?
"Here you will see that over Covid, between 2020 and 2022, there was around a 25 percent increase in the price of apples, as we would expect, but then they came back down just as the government increased the total number of people in Britain through immigration. Notably Jeremy Hunt was imposed as Chancellor during this same period. Since the money supply did not reduce relative to apples, the price was surely brought back down by some other factor. I propose this other factor is the exchange ratio between the M1 Money Supply and the total population, namely the additional 3 million imported since Covid."
I don't quite understand, could you elaborate?
More consumers with no increase in production would be inflationary. More workers competing for jobs with no new jobs would be deflationary. Why would 3 million more imported consumers be deflationary? I assume the items in the minimum monthly cost of living would be affected disproportionately, as the spending of these migrants would be mostly on basic goods and won't affect the demand for items that only the middle class can afford. So, the middle class might have to spend more on basic goods because their prices go up, and now they have less money for middle class items, so middle class items prices go down, but would that result in deflation in total?
"Using these numbers we can see it would take the extra 3 million immigrants only around seven and a half years to ‘soak up’ the new money assuming the money supply is kept relatively stable. Via this mechanism, although each individual British person has been made worse off, as per my village example, the extra people partly offset the inflationary effects of the excess money printing during Covid. I offer this as an explanation for what the government has done, and although I have focused on Britain here, it seems at a glance that similar policies have been pursued in parallel across the Eurozone and in the USA."
I think your hypothesis needs some comparisons between different countries. Some European countries imported a lot of Ukrainian refugees in 2022. Poland imported 5 million of them, for example. What kind of effects on prices did it have there, as compared to other European countries that didn't import any Ukrainians?
The effect is explained by my village example, they have changed the ratio of money and people so that the same amount of money is now spread among more people. Every household therefore has less to spend which should keep a cap on prices. Also in the case of apples, weirdly, immigrants don’t seem to affect demand which is basically unexplained but this is by the by.
In the village example, households have less money to spend, so we would expect them to consume the same amount on necessities (in terms of units consumed), but less on non-necessary items. If you add 3% more households, that's a 3% in demand for necessities (I assume with no increase in supply), which would surely be inflationary for the cost of necessities. Are apples supposed to represent necessities or non-necessary items?
My guess is the low-IQ immigrants eat primarily the cheap, crappy food produced by Big Ag. Fruit is seen as a luxury item because it’s relatively expensive now.
There was a case recently where someone re-ordered the same basket of food from Wal-Mart he bought in 2019 for $140, and it’s $410 now. So there has been a definite supply shock and price squeeze on food. Perhaps the elites have been gambling that food was super cheap before and therefore the proles could tolerate a big increase… or just didn’t care.
Necesseties like housing will surely increase. But apples are more of a luxury item.
Then if this was indeed "an attempt to offset inflation from printing money" it would be a failure. It can't offset inflation if it would result in the price of necessities going up. That's creating inflation, not offsetting it.
We need a chart for historic minimum monthly cost of living. Volume of apples sold and apple prices are not sufficient.
A different way to look at this is that if the people and hence economy doubles, then the money supply will have to double as well to maintain equilibrium. Otherwise prices fall.
There is less money per household but more households. Total demand for goods and services unchanged.
Not correct, if there are double the households they all also need to have double the money, otherwise prices fall.
The general price level is based on (1) the volume of money units chasing (2) the volume of goods and services available for purchase. Unless you change either (1) or (2), the general price level will not change. Households as such, and population as such, are not part of this.
A married couple, both of whom are working, divorces. One household becomes two. Prices generally go down? Of course not. Money volume is the same; economic production is the same.
A married couple has a baby. Two people become three. Prices generally go down? Of course not. Same number of money units, same economic production. The couple spends more on some things and less on others, so relative prices may change. But no general inflation or deflation.
Incorrect, and beyond that the example of the divorce and a baby is idiotic in this context where we are talking about increasing the number of working age people.
If the amount of goods is increased relative to the amount of money, as happens if the economy is doubled, prices fall. This is what historically happened during the gold standard. Get out now.
Academic Agent's argument was not that immigration will hold down prices by increasing economic production. It was that immigration will hold down prices because the decrease in the money-to-population ratio leaves each person with less money to spend, causing demand to fall. That was the fallacy I was responding to.
In my first sentence of my last comment, I said that the price level is based on the ratio between the volume of money and the production of goods and services. So obviously I agree with you that increasing production will drive down prices.
The divorce and baby examples show that the number of households as such, and the population as such, do not determine the general price level. I said this because I was assuming you had read AA's post.
Dude, I know full well that the gold standard was deflationary. And I support it for that reason. Next time you might consider that a perceived disagreement is based on a misunderstanding, rather than that the other person is stupid.
This was a very fascinating take on mass migration entering into the west
Great piece! I’m convinced most modern problems are downstream of the money printer. Check out https://wtfhappenedin1971.com (in 1971 the US went off the gold standard)
Very intriguing. But I would suggest analyzing luxuries and necessities differently. Here in USA, the illegals don’t buy Mercedes cars or houses in Beverly Hills but they buy a lot of food and rent apartments.
In your apple example, an influx of immigrants would RAISE the price of apples because people need to eat. That is precisely what has happened to food and apartments in the USA.