The change wrought by markets goes to the very core of the issue. It makes and breaks whole institutions, sometimes overnight. And it does so in a beneficial way for the whole, without blood and without the risk of unanticipated calamity.
Hayek was arguing that whenever and wherever credit is expanded beyond market dictates by a central bank, the result will be economic distortion.
In this article, I'll explain short selling (and the "naked" variant), its benefits to the market economy, and the harm from arbitrary government restrictions on the activity.
Unless a businessman can forecast when the crash will occur, it is to his advantage to take the new money and stay abreast of the competition.
A "seizure" of possessions and an "injury" to the people have occurred because "what is declared to be more is worth less."
Fannie and Freddie are going to be bailed out by taxpayers, I told the host, and the resulting inflation will make a weak dollar weaker and prop up corrupt banks that market forces would otherwise force out of business.
So, don't be so quick to take the plunge buying bank foreclosure properties and forget traditional stocks and bonds. It's not for the faint of heart, but the road to riches is with junior mining shares.
Even some professional economists — don't really have a good intertemporal mental construct of the market, they can't really fathom how prices would guide people to properly allocate scarce resources.
Government and its henchmen are anxious to relegate into oblivion the fact that this rise is produced by an increase in the amount of money and money substitutes. They never mention this increase.
Envy-based policies seem to persist, whether in the form of progressive taxation or in assumptions that a state like New York can decide something as subjective as the reasonableness of salary contracts freely agreed upon.
