What government cannot do without causing even more problems is take positive action against symptoms, such as falling stocks or housing prices, rising unemployment, business failures, and falling incomes. This is precisely what caused the Great Depression to get its name instead of being called what it might have been called: the recession of 1929–1931.
The most important signal flashing recession is, of course, the subprime mortgage fiasco.
An unwise and overambitious foreign policy, and particularly the effort to do more than we are able to do, is the one thing which might in the end destroy our armies and prove a real threat to the liberty of the people of the United States….
Investments pay you money every month. Homes are just the opposite – money pits.
Mises said that such a monetary policy would ultimately end in the destruction of the exchange value of money.
Inflation, in case we've forgotten, is robbery by another name.
The rate cut today is a good reminder that the Fed can’t always get its way.
In conclusion, inflation wreaks havoc on the structure of capital. It does so not only through the intertemporal misallocation of resources that takes place when the interest rate no longer reflects the social rate of time preference, but inflation also wrecks the existing structure of capital by introducing unpredictability into entrepreneurs' plans that rest on predictable exchange rates.
Here's what I would like to see: the whole of Wall Street rising up against the Fed and demanding that it turn off the spigots and let the economy get back on an even keel. Let the correction happen and let profits and wages fall in the overblown sectors.
Contrary to Minsky, our analysis shows that it is the existence of the central bank that makes modern capitalism unstable.
