Booms and Busts

With a record-height tower and a flooded credit system: 2026 may be when the curse returns. 

Net present value (NPV) is a popular decision-making criteria used by firms to make key, crucial choices about how to allocate resources across an economy, but this can be misleading especially when interest rates are manipulated via inflation.

The Fed is cutting its discount rate again, but Americans will be disappointed with the results, as the Fed’s latest action only contributes to the boom-and-bust cycle.

As government continues to engage in reckless actions from inflation to starting wars, people develop shorter time horizons, creating social vacuums. Increased gambling and other irresponsible behaviors then fill the void.

As government continues to engage in reckless actions from inflation to starting wars, people develop shorter time horizons, creating social vacuums. Increased gambling and other irresponsible behaviors then fill the void.

When there is a cascade of failing businesses at one time, it is easy to think of it as an economic contagion that is a by-product of capitalism. Yet, a cluster of business errors can be laid firmly at the feet of government.

Mainstream economists are at a loss to explain why the current regime of inflation and central bank interventions have been so economically devastating. Understanding Cantillon effects is vital to making sense of the current madness.

As the US economy slowly implodes, the government causing the implosion is not done with its economic destruction. The Federal Reserve remains the engine of inflation, while tariffs and other interventions help to finish the job.

Keynesian orthodoxy claims that the cause of recessions is a decline in so-called aggregate demand. Besides confusing cause-and-effect, Keynesians don't understand that downturns are the result of malinvestments made during the boom because of central bank interference in the economy.

Milton Friedman and the Monetarists believed that fluctuations in the money supply caused the boom-and-bust business cycles. Their solution—keeping money growth slow and steady—would still lead to business cycles.