While the Fed tries to engineer the mythical “soft landing” for the economy, Austrian economists know that this is an exercise in futility. Once the credit-fueled boom occurs, the bust logically follows.
As the federal government continues its Ponzi scheme of issuing debt to pay for past debts, interest rates will increase to the point where this no longer is a tenable strategy—if it ever was.
Forget the New York Times and other publications that cheerlead for the current regime. Austrian economics spells out the consequences for reckless monetary policies, and those consequences are unavoidable.
The boom-and-bust cycles are not natural to a market economy, contra Keynes. Instead, government through monetary manipulation creates them—and then politicians blame markets themselves.
Popular economic thinking holds that consumer spending is the most important driver of the economy. Actually, demand can’t exist without something first being supplied.
Fractional reserve banking allows the Federal Reserve to manipulate the money supply, leading to booms and busts. Central banking is not a defense against business cycles; it is a major cause of them.
Forget Vegas sports betting for reckless speculation. When the Fed officials make projections, the markets assume they are accurate. However, as Jerome Powell himself admits, forecasts are speculative at best.
