Central banks, and especially the Federal Reserve System, continue to churn up inflation and the boom-and-bust cycles—in the name of "stabilizing" the economy.
While the usual characters praise central banks for supposedly bringing economic stability, Dr. Shostak explains that their presence makes things unstable because they break the relationship between saving and lending.
Keynesian orthodoxy claims government can successfully counter recession through "expansionary" policies. To the contrary, these policies increase the danger to the economy.
The success of Japan after WWII was due entirely to low taxes, an appreciating currency, and a very high personal savings rate. That all changed when the bubble was born in the late 1980s.
Contractionary monetary policy may be necessary to slow the rise of inflation, but the recessionary results of this remind us why the Fed's inflationary policy is so dangerous.
In spite of what they say, governments will do nothing about inflation. Even though "money printing" is the real cause of this, governments will just keep blaming red herrings like supply chain problems.
It will come as yesterday's news that the speculator is perennially under attack by the social justice warriors. Yet speculators serve a crucial and valuable role in surviving economic disasters.
While bankruptcy has a negative connotation in the business world, “Bankruptcy fulfills the crucially important social function of preserving the available stock of capital."
