"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
These are the people who said that there was no housing bubble, that there was no danger of financial crisis, and then that a financial crisis would not impact the real economy. These are the same people who said they needed a multitrillion dollar bailout of the financial industry, or we would get severe trouble in the economy.
Rival explanations — for example ones that claim government deficit spending doesn't help an economy — fit the evidence far better.
Fake booms and their consequent busts are directly linked to financial cycles, which in turn reflect the swings in money creation.
Bubbles, as we have seen, result from deliberate "expansionary" policies by government authorities, yet Krugman always seems to treat them as being solely the products of private enterprise.
The world already has the Great Depression as a warning. But governments and the bureaucrats who run them have decided to ignore the lesson. The new crisis of interventionism is fast approaching, and the market will not wait for governments to realize their errors.
