China’s economic growth is turning out to be just another financial bubble ready to pop. The lesson is clear: monetary expansion causes economic instability. This bursts two theoretical bubbles: one, that instability is inherent in global capital markets, and two, that we are preparing to lift out of recession.
Posts Tagged ‘Expansion’
Why Economic Stimuli Don’t Work
There are already talks of a second stimulus package. This will only bring about greater poverty and greater illusion of recovery. The future remains bleak for world prosperity.
The Case Against the Issue of Fiduciary Media
Ludwig von Mises on the issue of fiduciary media, from his first book on the topic of money: “The Theory of Money and Credit”.
Thoughts on Fractional-Reserve Banking
One of the most heated topics within the school of Austrian Economics is whether or not fractional-reserve banking would or should exist in a free market. There are considerable arguments put forth in support of either opinion by various scholars, but ultimately it seems as if fractional-reserve banking does not pass the test.
A New Perspective on Roosevelt’s Recession of 1937
From the essay “The Dangerous “Lessons” of 1937. Roosevelt’s Recession of 1937 may be more relevant to the current financial situation in the United States than the Crash of 1929. This is because we may be headed in the same direction.
False Hopes in Unemployment
It seems surprising that a publication with the reputation of the Economist would include itself amongst the dozens of sources which suggest that a slight drop in unemployment figures signals the near-end of the recession. First, the economist who wrote that article obviously has not studied the history of unemployment during the Great Depression, because if he had he would have been more wary of making such proclamation without stronger evidence to support his thesis.
Assessing Alan Greenspan’s Role in the Current Economic Crisis
Economists David Henderson and Jeffrey Hummel suggest that then-Chairman of the Federal Reserve Alan Greenspan’s monetary policy did not have a large impact on the interest rates. Their analysis couldn’t be further from the truth.
Introduction to the Austrian Business Cycle Theory: Explaining the Boom & Bust
The business cycle has been attributed to many factors by many different economists, but other than the Austrian Business Cycle Theory, none have been able to pinpoint the exact causations for an economic recession (or depression). The only theory which has consistently been able to cause the business cycle is the Austrian theory; a theory which presents the problem as a problem of fractional-reserve banking.
The Possibility of Postponing the Eruption of the Crisis: The Theoretical Explanation of the Process of Stagflation
The arrival of the economic recession can be postponed if additional loans unbacked by real saving are granted at an ever-increasing rate, i.e., if credit expansion reaches a speed at which economic agents cannot completely anticipate it. This strategy is condemned to inevitable failure and involves a huge additional cost: once the recession hits, it will be much deeper and much more painful and prolonged
