One would think that being on the inside of many decades of careening one step ahead of monetary chaos might induce a sober, even cynical, spirit — that it might lead the insider to call for keeping one's metaphorical air-raid shelter well stocked and at the ready.
As a developer, I do not hire an employee before I have conceived of a construction activity that will earn me a decent return. I hire an employee when I have a productive need for his services.
Fiat money — or, to be more precise, its production — is already a violation of the free-market principle; and fractional-reserve banking amounts to leveraging the economic consequences of fiat money. Austrians favor a money that is freely chosen and operates by market principles.
Bernanke assured the national audience that the Fed was not printing money; however, he didn't explain where the Fed was going to get the funds to buy $600 billion worth of treasuries.
The economist should not allow his readers to accept the current myth that inflation is a scourge that governments try, with varying success, to keep in check. This myth is one of the consequences of economists generally failing to make explicit their assumptions.
I have not been persuaded by Mish's alternate framework. To be clear, I'm not arguing that Mish's fans should abandon their hero. Rather, I will simply point out that Mish's "calls" have not been nearly as prescient as he so often claims.
It is the seeking of profits that is the key to increased living standards for everyone. But high profits do not necessarily correspond to real economic growth and can come about due to adverse circumstances.
Recorded at the Mises Circle at Furman Universityon November 13th, 2010.
