Booms and Busts

"The risk associated with loan obligations are shifted to the taxpayer. Consequently, the act removes obligation and creates a moral hazard with the creation of a virtual backstop."

In a depression, all prices must be allowed to adjust downward. Wages are no different. First and foremost, the government's artificial wage floor should be removed.

"While it would be more comfortable to get money for nothing, this would not be the wisest long-run policy solution to unemployment."

"The Keynesian model can't capture the fact that during the boom period, society 'eats the seed corn' through malinvestment."

"These guys weren't just taking a position and keeping their fingers crossed, they had to keep feeding their bets, even when the financial world (and their investors) thought they were nuts."

"Zimbabwe's lush soil is the envy of all of Africa. The country is said to hold 80 percent of the world's platinum deposits and huge reserves of natural gas. And along with its rich natural resources, the Zimbabwean population boasts a literacy rate exceeding 90 percent. So what happened?"

You know you have crossed into the Austrian light when you wake up one morning and everything has become clear.

Presented to the Auburn University Economics Club; Auburn, Alabama, on 25 March 2010. Includes a Question and Answer period.

Printing up money and lowering the value of all dollar-denominated assets while simultaneously benefiting political friends and accomplices is sure