Booms and Busts

Central banks were already fueling artificial bubble growth and malinvestment in tech firms. Then the lockdowns sped up the trend even more.

What matters is not whether the emergence of a bubble is associated with price rises but rather the fact that the emergence of a bubble gives rise to nonproductive bubble activities.

America today confronts an unprecedented crisis. Our economy is collapsing, and the fake coronavirus “epidemic,” with its draconian restrictions, is destroying our liberty. What can we do?

Money printing—even at a constant rate—is going to generate the same result as any other money printing. The reason lies in the fact that money creation transfers wealth from productive to unproductive enterprises.

Money printing—even at a constant rate—is going to generate the same result as any other money printing. The reason lies in the fact that money creation transfers wealth from productive to unproductive enterprises.

By flooding the market with cheap credit, Alan Greenspan pushed interest rates (including mortgage rates) down to artificially low levels. This caused the bubble in house prices and misallocated too many real resources to the housing sector.

If policymakers finally let a real economic "correction" and recession happen, it means the economy will finally turn toward doing what the consumers actually want.

The “forgotten depression” can still teach us important lessons: that the interventionist and spendthrift state is often more part of the problem than it is of the solution.

Eventually, loose monetary policy will damage real savings to the point that the economy can no longer sustain sufficient economic growth. At that point, it will become clear that money printing can't create economic growth.

Liquidity only disguises risk; it does not resolve solvency issues driven by collapsing cash flows while costs remain elevated.