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David Stockman on Mises and Hazlitt


"Henry Hazlitt . . . titled his March 1969 Newsweek column "The Coming Monetary Collapse."  Hazlitt publicly warned the White House that 'one of these days the United States will be openly forced to refuse to pay out any more of its gold at $35 an ounce.'  The result, Hazlitt insisted, would be a 'run or crisis in the foreign exchange market' that could end convertability entirely.  'If it does . . . the consequences for the United States and the world will be grave.'  Hazlitt could not have been more clairvoyant.  The postwar monetary order was at a crucial inflection point.  It would soon lurch into a forty-year spree of global debt creation, financial speculation, and massive economic imbalance . . ."

—David Stockman, The Great Deformation, p. 117.


  "Newly minted central bank money stimulated rapid private debt extensions, which was used to bid-up asset prices, which elicited more collateralized credit, which drove asset prices even higher.  The Austrian economist Ludwig von Mises had explained this type of credit boom cycle way back in 1911, but by the 1990s the hubris of monetary central planners superseded the plaintive monetary wisdom of an earlier age.  In those benighted times, economists and legislators alike knew the difference between the honest savings of the people and bank credit made out of thin air."

— David Stockman, The Great Deformation, p. 337.

Thomas DiLorenzo is professor of economics at Loyola University Maryland and a member of the senior faculty of the Mises Institute. He is the author of The Real Lincoln; How Capitalism Saved America; Lincoln Unmasked; Hamilton's Curse; Organized Crime: The Unvarnished Truth About Government; and The Problem with Socialism.

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