The Four Blind Mice At The Cliff

“They Keynesian economists urge adoption of a “managed currency” and various forms of government intervention in the economic life of its fellow citizens. The idea is that government should supply an economic wisdom that private enterprise lacks or is unable to use. But even these economists see the uneconomic results of the government intervention which they advocate….Can government ever supply private enterprise with an economic wisdom which it would otherwise lack?” – Away From Freedom (1952) Vervon Orval Watts, pg 70.

“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate secretly and unobserved, an important part of the wealth of their citizens….As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.” – The Economic Consequences of Peace (1919) John Maynard Keynes, pg 235 & 236.Do you think of the markets you have your money in as having degenerated into a gamble and a lottery? Has the constant stream of comments on centrally planning not only our economic life but the need for constant intervention into global markets and the world’s currencies left you with a feeling that the world of 2016 has come a long way from the world of even 1986?

In Ludwig Von Mises’ work, The Theory of Money and Credit, published the year before the Federal Reserve was established in 1913, he stated “if one wants to avoid the occurrence of economic crisis, one must avoid the expansion of credit that creates the boom and inevitably leads into the slump”.

So simple, and yet ignored for decades. With each debt fueled boom, came a larger bust, and a need for more intervention by central bankers (the state) in order to make sure the latest bust could be stalled a little longer so that public at large eventually ignored such terms as bust, crash, and collapse as merely marketing terms used by “sensationalists”.