The Fed

Remember the flight to "safety" into T-bills and T-bonds? Most people fled from hard assets. These are the victims. They believed the propaganda of the establishment.

As things stand, central banks' monetizing government debt is presumably the way forward for producing inflation — which is, and must be, defined as a rise in the money stock.

The entrepreneur takes calculated risks, and typically "builds" using the carpenter's rule: measure twice, cut once. If it does not make financial sense to build, the entrepreneur will not do so. In addition, the entrepreneur would later know — through the profit-and-loss mechanism — whether such a decision was prudent or foolish.

Artificial credit created by a deceptively low rate of interest leads to speculative bubbles.

Remove all government impediments to effective entrepreneurial planning: avoid protectionist measures internationally; allow prices and wages to adjust as needed to restore market equilibrium. Not only cut tax rates, as was done in the incomplete reforms of the 1980s and early in this century, but, per Rothbard, drastically reduce the government budget, both taxes and expenditures.

Krugman. 2002. Calling for a housing bubble.

True prosperity did not return until "the federal government relinquished its stranglehold on the American economy."

Suppose in 2007 you were handed a piece of paper and a pencil, and were asked, "Come up with a list of bullet points for how to generate severe stagflation in the years 2010 through 2019."

Wouldn't your list look pretty similar to what has already happened?

Bubble activities are not self-funded; they require money "out of thin air," which is employed to divert real savings to them from wealth generators.

"In a year or two, we just moved right from that stock-market bubble, almost seamlessly, into the real-estate bubble, and nobody could see that there was any similarities."