Money and Banking

An overheating economy emerges once expenditure rises without being backed up by production, a situation that emerges when the money stock is increasing.

Recessions grow out of government and central-bank interventions that direct resources away from true wealth generating activities — and toward bubble activities.

Neither the Fed nor the government can grow the economy. They can only redistribute real wealth.

Even with falling interest rates and high liquidity, there have been spectacular bankruptcies, so imagine what can happen when rates rise.