With low interest rates, the price of money decreases. This can produce hyper-deflation, a cycle where prices increasingly decrease, drawing on all reserves of goods, leading to a side by side phenomenon of low prices and shortages. This will combine with low labor force participation, as wages, also a price, will decline.

A “strong dollar” may seem beneficial, as a store of value. In reality, it represents the economic descent into hyper-deflation. This may be blamed on “cheap goods” coming from China. In fact, cheap goods may be found everywhere, including the US, if one looks at Google, Netflix, and Facebook, which appear to be, essentially free or low cost. Yet their “cheapness” undermines the incentive to deliver them to market, creating shortages, disruptions, and delays alongside low prices.

Only a large increase in the minimum wage combined with government financed full employment can increase labor force participation and replenish goods reserves at a sufficient rate.