The Man Who Predicted the Depression

[Arraya]

http://online.wsj.com/article/SB10001424052748704471504574443600711779692.html

Ludwig von Mises was snubbed by economists world-wide as he warned of a credit crisis in the 1920s. We ignore the great Austrian at our peril today.

Mises’s ideas on business cycles were spelled out in his 1912 tome “Theorie des Geldes und der Umlaufsmittel” (“The Theory of Money and Credit”). Not surprisingly few people noticed, as it was published only in German and wasn’t exactly a beach read at that.

Taking his cue from David Hume and David Ricardo, Mises explained how the banking system was endowed with the singular ability to expand credit and with it the money supply, and how this was magnified by government intervention. Left alone, interest rates would adjust such that only the amount of credit would be used as is voluntarily supplied and demanded. But when credit is force-fed beyond that (call it a credit gavage), grotesque things start to happen.

Government-imposed expansion of bank credit distorts our “time preferences,” or our desire for saving versus consumption. Government-imposed interest rates artificially below rates demanded by savers leads to increased borrowing and capital investment beyond what savers will provide. This causes temporarily higher employment, wages and consumption.

[investor]

The good fight has always been the most difficult road to follow. I don’t know where our current trends are leading us. I do believe that the easy credit that the federal reserve promotes through the fractional banking reserve system makes unwise loans very easy to obtain and results in bubbles that go pop, especially for the unwise investor. The fact that the roaring twenties was probably fueled by the formation of the federal reserve in 1913 and led to the great depression seems to be lost on most eveyrone. Personally, I am getting out of all debt, including my home before I invest in positive cash properties and businesses. The fact that the federal reserve has never had its books opened for review also point to one of the problems we face as an independant country.

[investor]

The good fight has always been the most difficult road to follow. I don’t know where our current trends are leading us. I do believe that the easy credit that the federal reserve promotes through the fractional banking reserve system makes unwise loans very easy to obtain and results in bubbles that go pop, especially for the unwise investor. The fact that the roaring twenties was probably fueled by the formation of the federal reserve in 1913 and led to the great depression seems to be lost on most eveyrone. Personally, I am getting out of all debt, including my home before I invest in positive cash properties and businesses. The fact that the federal reserve has never had its books opened for review also point to one of the problems we face as an independant country.

[investor]

The good fight has always been the most difficult road to follow. I don’t know where our current trends are leading us. I do believe that the easy credit that the federal reserve promotes through the fractional banking reserve system makes unwise loans very easy to obtain and results in bubbles that go pop, especially for the unwise investor. The fact that the roaring twenties was probably fueled by the formation of the federal reserve in 1913 and led to the great depression seems to be lost on most eveyrone. Personally, I am getting out of all debt, including my home before I invest in positive cash properties and businesses. The fact that the federal reserve has never had its books opened for review also point to one of the problems we face as an independant country.

[investor]

The good fight has always been the most difficult road to follow. I don’t know where our current trends are leading us. I do believe that the easy credit that the federal reserve promotes through the fractional banking reserve system makes unwise loans very easy to obtain and results in bubbles that go pop, especially for the unwise investor. The fact that the roaring twenties was probably fueled by the formation of the federal reserve in 1913 and led to the great depression seems to be lost on most eveyrone. Personally, I am getting out of all debt, including my home before I invest in positive cash properties and businesses. The fact that the federal reserve has never had its books opened for review also point to one of the problems we face as an independant country.

[investor]

The good fight has always been the most difficult road to follow. I don’t know where our current trends are leading us. I do believe that the easy credit that the federal reserve promotes through the fractional banking reserve system makes unwise loans very easy to obtain and results in bubbles that go pop, especially for the unwise investor. The fact that the roaring twenties was probably fueled by the formation of the federal reserve in 1913 and led to the great depression seems to be lost on most eveyrone. Personally, I am getting out of all debt, including my home before I invest in positive cash properties and businesses. The fact that the federal reserve has never had its books opened for review also point to one of the problems we face as an independant country.

[moneymaker]

I thought this post was about my previous posts. Just kidding. Last time I got out of the market it crashed 2 weeks later, so I’m giving it one more week before it crashes. Everyone thinks Nov 27th is black friday. I think it will come a week earlier, I predict stocks will go on sale Nov 20th.

[moneymaker]

I thought this post was about my previous posts. Just kidding. Last time I got out of the market it crashed 2 weeks later, so I’m giving it one more week before it crashes. Everyone thinks Nov 27th is black friday. I think it will come a week earlier, I predict stocks will go on sale Nov 20th.

[moneymaker]

I thought this post was about my previous posts. Just kidding. Last time I got out of the market it crashed 2 weeks later, so I’m giving it one more week before it crashes. Everyone thinks Nov 27th is black friday. I think it will come a week earlier, I predict stocks will go on sale Nov 20th.

[moneymaker]

I thought this post was about my previous posts. Just kidding. Last time I got out of the market it crashed 2 weeks later, so I’m giving it one more week before it crashes. Everyone thinks Nov 27th is black friday. I think it will come a week earlier, I predict stocks will go on sale Nov 20th.

[moneymaker]

I thought this post was about my previous posts. Just kidding. Last time I got out of the market it crashed 2 weeks later, so I’m giving it one more week before it crashes. Everyone thinks Nov 27th is black friday. I think it will come a week earlier, I predict stocks will go on sale Nov 20th.

[sobmaz]

The Government has got things so screwed up it is impossible to know what the right thing to do is…is it Inflation or is it Deflation?

My personal solution is 50% cash and 50% metals and mining.

[sobmaz]

The Government has got things so screwed up it is impossible to know what the right thing to do is…is it Inflation or is it Deflation?

My personal solution is 50% cash and 50% metals and mining.

[sobmaz]

The Government has got things so screwed up it is impossible to know what the right thing to do is…is it Inflation or is it Deflation?

My personal solution is 50% cash and 50% metals and mining.

[sobmaz]

The Government has got things so screwed up it is impossible to know what the right thing to do is…is it Inflation or is it Deflation?

My personal solution is 50% cash and 50% metals and mining.

[Author]

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