The Federal Reserve has a legal dual mandate to minimize unemployment and price inflation. The current “dual” between the two mandates is to reduce price inflation by increasing interest rates to increase unemployment and kill businesses to choke off aggregate demand. This has been the most important economic and investment issue this year and this dual minimization procedure has dominated Fed policy for at least three-quarters of a century.

When asked about price inflation in his Sunday interview with 60 Minutes, President Joe Biden claimed that inflation “was up just an inch … hardly at all.” Biden continued the dishonest tactic of focusing on month-to-month price inflation growth to obscure forty-year highs in year-over-year inflation. This strategy may yet work to placate the most ignorant voters, but people who are paying attention know that price inflation continues to soar.

For most economists the velocity of money circulation is an important factor in determining the prices of goods and services. If, for example, the quantity of money increased by 10 percent in a given year, while the price level has remained unchanged it would mean that there must have been a decline of about 10 percent in the velocity of money circulation.