Very good work. Most "economics" is just banking propaganda so it's nice to read something that is actually correct. It is beginning to look like every single "recession" is meticulously planned to crash the economy so they can use printed money to buy everything on the cheap before they start pumping again....
I think the malinvestment was supported by the lockdowns (and the monetary easing). It was the good businesses in competition with it which was harmed.
So it is a real pity that no one on Capital Hill knows or studies economics. I wonder what their personal check books look like and how much credit card debt they have?
There is a minimum interest rate, not known in advance, but which becomes apparent eventually. It's determined by changes to the lender's equity.
Banks have costs, so they need an income to counteract this, which is why they charge interest on loans. Interest income must cover at minimum:
1. The costs of doing business (employees, consumables, property, heating & lighting, etc.)
2. Any defaults.
If interest income doesn't cover this, the bank is heading for certain insolvency. The actual rate charged on a particular loan will generally reflect the possibility of default from that specific borrower, and cover a share of the other costs.
Competition between lenders helps to set an upper bound on the interest rate.
There's a little more detail in the 2nd link, but you'd probably need to read the 1st one first.
There is no econometric measure that can accurately predict how 8 billion humans value the use of their money! Some are willing to pay a high interest rate for creating a business to provide a high return. Others see such risks as unacceptable and unprofitable. But when a central authority decides to lower rates, they encourage unprofitable decisions about the wisdom of taking a loan… malinvestment 101.
I have spent half of Labor Day reading this article. I found it to be very well researched and footnoted. I highly recommend you read this in its entirety as it discusses the “how” you will own nothing (but not how you will be happy). What hooked me on reading the entirety is the discussion of “securities” and that book entry securities will be confiscated LEGALLY in the great margin call to come. This harkens back to my JSMineset days where Jim urged everyone to get their certificates issued in paper form. The rest of the article is bone chilling, but I cannot disagree with the author’s how or where it all leads to. May God help us all! Please do not e-mail me with questions regarding certificate issuance. Please contact your individual companies and query who their transfer agent is and how to have your certificate issued. As for any questions on the overall article, please contact the author directly.
Mario Innecco/Maneco64, finance expert who used to work in the City of London, read the book and thinks the author and his warnings are legit:
How the Central Bankers Plan to Come After Your Assets.
This guy is a Brit and toward the beginning he talks about how they don't actually own their homes/property over there. Apparently, if TPTB want the property, they can take it. Makes me wonder if we have something similar here in the US--I read this book back in 2009, but I'm pretty sure the authors suggested something similar:
They Own It All (Including You!) By Means of Toxic Currency
Ellen Brown, lawyer and author of Web of Debt, has read The Great Taking, and is now trying to spread the word about the immense risk of massive collateral taking that humanity faces. Here's what she's sending out to other attorneys: “Every form of collateral from deposits to stocks to bonds, is being pooled; and those players with super priority status in bankruptcy can take from the pool before the bankruptcy proceedings even start. I knew that about deposits-derivatives have super priority status in bankruptcy- but didn’t realize it about stocks and bonds. The derivatives bubble will inevitably pop, and it is larger than all the assets in the world, which have been pooled by international agreement as the author shows”
Rates of interest, which are arguably the most important prices in an economy, mislead consumers and investors when manipulated, as with any price manipulation, causing pervasive distortions which must be wrung from the system at some point...painfully. By distorting interest rates central banks manage financial markets and the economy in the same sense that substance abusers "manage" their mental state. Of course the reality is central banks aren't managing markets they are afflicting the entire financial system and economy with misinformation inevitably causing financial and economic distortions, which are now global and massive.
At this point having driven nominal rates to zero central banks will not be able to further distort the system by driving nominal short rates meaningfully below zero, fomenting another speculative mania. We should now be prepared for resolution of decades of distortion via secular financial collapse rather than another interim collapse, such as those suffered in recent decades. If history is any guide that means the ultimate bottom won't be reached for 12 years or more. Loss of wealth held in paper financial assets could reach and exceed 90% with fixed rate paper suffering the deepest losses in inflation adjusted terms.
Central banks now have just two dreadful options; deflationary secular collapse or inflationary secular collapse. With all world currencies fiat resolution of distortions extant will be via price inflation, no doubt. Physical assets offer refuge, particularly financially liquid physical assets (e.g. precious metals).
This is so frustratingly true: "Those borrowers, above all the government, effectively get free money in the form of cheap loans. They use them to take over hunks of economy and society, while driving the very income inequality that ironically animates the communists to advocate for yet more government control."
October doesn't bode well with student loan repayment starting (chaos ensured) and a more likely than not 1-2 week .gov shutdown (a good thing, but will add to the chaos). Hoping it holds together into the winter so we can complete liquidation of some RE.
I have a great deal of respect for Austrian economics, which seems to be the only school to acknowledge that TANSTAAFL. But I do have a couple of areas of disagreement, including the idea that the business cycle is always and everywhere a governmental phenomenon. Bear with me if you will:
Imagine a low-tech society where the only scarce consumer goods are flour and cheese. (Cheese pies are the staple diet). People currently grind wheat by hand. Now Bob decides to build a water mill. He reckons that the extra flour production will pay for the capital expenditure in 10 years. There's a big increase in economic activity over 1 year as people give up leisure time to produce capital goods to sell to Bob to make the mill. (He promises to pay them in flour over the following years). The investment's successful, Bob reaps the benefits by producing flour much faster, and after 10 years, he's produced enough extra flour to pay everyone who sold him capital goods. He continues to benefit from the increased production for another 20 years, getting to buy more cheese and eat more cheese pies.
Now consider the effects on GDP. There was a significant increase while the mill was being built. Then GDP drops sharply as capital goods production stops, but to a level somewhat higher than the pre-mill period, due to the extra flour production (and perhaps cheese makers deciding to work overtime).
If investments like this occurred randomly through time, it would add up to a fairly steady increase in GDP. But suppose they were highly correlated, perhaps because there is a burst of investment when a new technology becomes available. Then the overlapping investment periods would be characterised by a large increase in GDP, and the benefit reaping periods would lead to a sharp drop from this extreme level, although still to a level above the baseline. This pattern is sustainable: waves superimposed on a steadily-increasing straight line. It's the classic graph of business cycles in a growing economy.
My take is that ABCT describes our current situation very well, where absurdly low interest rates, subsidies and bailouts over recent decades have caused a monstrous misallocation of capital (and labour and land) into malinvestments, and all governments and central banks want to do is more of the same to delay the consequences (while aggravating them). But I think that the Austrian school should recognise that there could be other reasons for business cycles too: not doing so opens it up to being accused of being out of touch with the real economy. There can be unused capacity in the economy. Many schools of economics want to force it to produce against its own best interests. I'm happy to see it put to work of its own free will and to its own benefit. That leads on to the subject of credit, but that's for another day...
Only two scarce commodities is hardly an accurate mental model of reality. The Invisible Hand is at work on an infinity of commodities, wants and needs.
“Unused capacity” is a lifestyle choice for more leisure, unmeasurable by econometric models, but driven by Human Action choices. Each of us has a price at which we would prefer to work instead of play. The Unseen Hand we create with those infinite individual choices.
Only government incentives or disincentives act to upset that natural equilibrium. Pay people not to work, or punish them for working harder with higher taxes. Subsidize commodities or put tariffs on them.
One of the problems with Wicksell's suggestion of inflation targeting is that prices should be *falling* in a more productive economy. Even an inflation target of zero would transfer wealth away from the rightful beneficiaries: those entrepreneurs, managers, workers and investors who have collaborated to produce more efficiently.
Thanks for your reply, with which I largely agree.
I only used 2 commodities in the example for simplicity of exposition, not because it's in any way related to the argument. When there is an opportunity, say because someone's just invented canals, people of their own free will may decide to give up some leisure, or some consumption, judging that they would prefer to swing a pick axe, produce TNT, or build narrowboats now in order to benefit in future from the value created by the investment. That's all I mean by "unused capacity" here. I generally don't like the phrase, because you can usually be pretty confident that the person using it is about to suggest manipulating people into doing something against their own interests, perhaps via subsidies or interest rate suppression.
I stand by my argument that it's perfectly natural when a new technology comes along for there to be short-term growth due to the good investments which it enables, followed by a period of reduced economic activity (technically a recession) when the investments are complete and the benefits can be reaped.
In that case later growth would be slower but there should be no absolute decline - if they really are good investments- and there will therefore be no recession.
I'm just talking about a decline in GDP from the *peak* of, say, mill-building, because of the reduction in capital production. If baseline GDP is X, the capital production year could be 1.5X, and then the subsequent years could be 1.1X.
That drop is essentially a recession, even though there's nothing wrong with it. People are choosing to resume leisure time, but enjoying a standard of living above the baseline due to their earlier capital production. Unfortunately, governments and central banks see the drop in GDP and think they need to "stimulate" the economy back to 1.5X (or more) by e.g. subsidising water mill production in deserts i.e. malinvestments.
Isolating any single economic activity, such as mill-building, from the infinite other economic activities that compete for one’s productive labor, is not realistic. Labor is fungible. If you don’t pay me enough, I take my labor elsewhere, in a free economy.
Resorting to GDPx econometric arguments ignores this reality.
GDP, if it could ever be accurately measured, remains A) the sum desires of the people who work, divided by the B) value of their productive output. B might be measured by bureaucrats who like to count beans, but A is beyond measure. Evidenced by the millions like me who left the rat race during the pandemic, because we valued our health and sanity more than wages.
Until the “macroeconomy” as constrained by overlords can reach equilibrium with us workers’ desires to be productive in an environment we find acceptable, there is no realistic way to measure “productivity” and “economic capacity.”
As a concrete example, consider how GDP and industrial output soared during WWII, as housewives went to work while their men fought, after a decade of government enforced deprivations. Individual motivation to produce in a national emergency overcame the stagnant reality of government policies restricting freedom of employment and personal prosperity.
I'm somewhat sceptical of GDP, particularly as measured in dollars, but I don't think it's controversial to say that there are fluctuations in the level of economic activity. My point is that fluctuations don't *have* to be a result of government actions.
People sometimes do extra work when there are benefits to be gained, especially capital production (e.g. canals). When the opportunities have dried up (e.g. there are enough canals now), it makes sense to ease off production and enjoy leisure instead. This can account for entirely natural fluctuations in economic activity.
That's not to say that governments don't cause fluctuations too. They absolutely do (often "justified" by trying to avoid a recession). And this can be extraordinarily destructive, rewarding malinvestment (e.g. building canals to nowhere), punishing prudence (e.g. forcing sensible canals to subsidise useless ones), and even undermining the foundations of a free economy (e.g. by debasing the currency).
"This book would never have come into being without the inspiration, encouragement, and guidance of Professor Joseph Dorfman. I am also indebted to Professors Robert D. Cross, Arthur F. Burns, and Albert G. Hart for many valuable suggestions."
America's First and Second National Banks were quite prosperous for "the people" in America until Andrew Jackson killed America's Banks in favor of private banking.
Interest rates were set between lender and borrower.
“We only ask you to examine the history of the times, during the existence of the two Banks, and compare those times with the miserable present,” - Abraham Lincoln 1843 speech.
When the Federal Reserve Act took control of interest rates, they also took control of "public opinion" by "buying" media, education, and the political class.
"The Currency" The Special Currency Committee set up by New York Chamber of Commerce 1906 pg. 10
“By the control of its rate of interest and of its issues of notes it would be able to exert great influence upon the money market and upon public opinion. Such power is not possessed by any institution in the United States.”
The Federal Reserve Act of 1913 gave the power of "elastic" money to the private international bankers which was a violation of the Coinage Act of 1792 which made debasing money a felony punishable by death. Essentially, a coup d'état.
Furthermore, does anyone know why Ludwig von Mises did not discuss Washington, Hamilton, and the first congress "American System" of economics in "Human Action"?
Very good work. Most "economics" is just banking propaganda so it's nice to read something that is actually correct. It is beginning to look like every single "recession" is meticulously planned to crash the economy so they can use printed money to buy everything on the cheap before they start pumping again....
Your 3 minute videos are a mandatory morning ritual for me now.
Good stuff as always. What level of malinvestment was cleared by the lockdowns? It seems that will determine the severity of the downcycle..
I think the malinvestment was supported by the lockdowns (and the monetary easing). It was the good businesses in competition with it which was harmed.
So it is a real pity that no one on Capital Hill knows or studies economics. I wonder what their personal check books look like and how much credit card debt they have?
This is true, most politician are clueless on economics and basic finance -- especially the Democrats.
When you refer to getting back to normal interest rates, what do you have in mind? Are current rates particularly high on a historic basis?
There is a minimum interest rate, not known in advance, but which becomes apparent eventually. It's determined by changes to the lender's equity.
Banks have costs, so they need an income to counteract this, which is why they charge interest on loans. Interest income must cover at minimum:
1. The costs of doing business (employees, consumables, property, heating & lighting, etc.)
2. Any defaults.
If interest income doesn't cover this, the bank is heading for certain insolvency. The actual rate charged on a particular loan will generally reflect the possibility of default from that specific borrower, and cover a share of the other costs.
Competition between lenders helps to set an upper bound on the interest rate.
There's a little more detail in the 2nd link, but you'd probably need to read the 1st one first.
https://economics21st.substack.com/p/money-and-banking-1
https://economics21st.substack.com/p/money-and-banking-2
(To understand the arrow notation, see the pinned post at https://economics21st.substack.com/)
Excellent question!
What is a “natural interest rate?”
There is no econometric measure that can accurately predict how 8 billion humans value the use of their money! Some are willing to pay a high interest rate for creating a business to provide a high return. Others see such risks as unacceptable and unprofitable. But when a central authority decides to lower rates, they encourage unprofitable decisions about the wisdom of taking a loan… malinvestment 101.
According to the Special Currency Committee of 1906 "control of interest rates controls public opinion" that was the power granted to the FED in 1913.
Have you heard about the book, The Great Taking?
The Great Taking by David Rogers Webb: https://thegreattaking.com/
Bill Holter’s commentary on The Great Taking:
I have spent half of Labor Day reading this article. I found it to be very well researched and footnoted. I highly recommend you read this in its entirety as it discusses the “how” you will own nothing (but not how you will be happy). What hooked me on reading the entirety is the discussion of “securities” and that book entry securities will be confiscated LEGALLY in the great margin call to come. This harkens back to my JSMineset days where Jim urged everyone to get their certificates issued in paper form. The rest of the article is bone chilling, but I cannot disagree with the author’s how or where it all leads to. May God help us all! Please do not e-mail me with questions regarding certificate issuance. Please contact your individual companies and query who their transfer agent is and how to have your certificate issued. As for any questions on the overall article, please contact the author directly.
Mario Innecco/Maneco64, finance expert who used to work in the City of London, read the book and thinks the author and his warnings are legit:
How the Central Bankers Plan to Come After Your Assets.
https://www.youtube.com/watch?v=r4I6uqLuJfA
Get Ready for "The Great Taking" Doug Casey's Take [ep.#275]
https://www.youtube.com/watch?v=M5-qvST4_iE
The Great Taking...The Plan To Hand Over YOUR Assets To The Banksters
https://www.youtube.com/watch?v=IIoGu692a64
This guy is a Brit and toward the beginning he talks about how they don't actually own their homes/property over there. Apparently, if TPTB want the property, they can take it. Makes me wonder if we have something similar here in the US--I read this book back in 2009, but I'm pretty sure the authors suggested something similar:
They Own It All (Including You!) By Means of Toxic Currency
https://archive.org/details/TheyOwnEverythingIncludingYou/mode/2up
Here's more info on the book here http://newpeopleorder.com/
Ellen Brown, lawyer and author of Web of Debt, has read The Great Taking, and is now trying to spread the word about the immense risk of massive collateral taking that humanity faces. Here's what she's sending out to other attorneys: “Every form of collateral from deposits to stocks to bonds, is being pooled; and those players with super priority status in bankruptcy can take from the pool before the bankruptcy proceedings even start. I knew that about deposits-derivatives have super priority status in bankruptcy- but didn’t realize it about stocks and bonds. The derivatives bubble will inevitably pop, and it is larger than all the assets in the world, which have been pooled by international agreement as the author shows”
[This guy is a Brit and toward the beginning he talks about how they don't actually own their homes/property over there.]
We don't really own our homes here, do we?
Rates of interest, which are arguably the most important prices in an economy, mislead consumers and investors when manipulated, as with any price manipulation, causing pervasive distortions which must be wrung from the system at some point...painfully. By distorting interest rates central banks manage financial markets and the economy in the same sense that substance abusers "manage" their mental state. Of course the reality is central banks aren't managing markets they are afflicting the entire financial system and economy with misinformation inevitably causing financial and economic distortions, which are now global and massive.
At this point having driven nominal rates to zero central banks will not be able to further distort the system by driving nominal short rates meaningfully below zero, fomenting another speculative mania. We should now be prepared for resolution of decades of distortion via secular financial collapse rather than another interim collapse, such as those suffered in recent decades. If history is any guide that means the ultimate bottom won't be reached for 12 years or more. Loss of wealth held in paper financial assets could reach and exceed 90% with fixed rate paper suffering the deepest losses in inflation adjusted terms.
Central banks now have just two dreadful options; deflationary secular collapse or inflationary secular collapse. With all world currencies fiat resolution of distortions extant will be via price inflation, no doubt. Physical assets offer refuge, particularly financially liquid physical assets (e.g. precious metals).
This is so frustratingly true: "Those borrowers, above all the government, effectively get free money in the form of cheap loans. They use them to take over hunks of economy and society, while driving the very income inequality that ironically animates the communists to advocate for yet more government control."
October doesn't bode well with student loan repayment starting (chaos ensured) and a more likely than not 1-2 week .gov shutdown (a good thing, but will add to the chaos). Hoping it holds together into the winter so we can complete liquidation of some RE.
Thanks for another great article!
I have a great deal of respect for Austrian economics, which seems to be the only school to acknowledge that TANSTAAFL. But I do have a couple of areas of disagreement, including the idea that the business cycle is always and everywhere a governmental phenomenon. Bear with me if you will:
Imagine a low-tech society where the only scarce consumer goods are flour and cheese. (Cheese pies are the staple diet). People currently grind wheat by hand. Now Bob decides to build a water mill. He reckons that the extra flour production will pay for the capital expenditure in 10 years. There's a big increase in economic activity over 1 year as people give up leisure time to produce capital goods to sell to Bob to make the mill. (He promises to pay them in flour over the following years). The investment's successful, Bob reaps the benefits by producing flour much faster, and after 10 years, he's produced enough extra flour to pay everyone who sold him capital goods. He continues to benefit from the increased production for another 20 years, getting to buy more cheese and eat more cheese pies.
Now consider the effects on GDP. There was a significant increase while the mill was being built. Then GDP drops sharply as capital goods production stops, but to a level somewhat higher than the pre-mill period, due to the extra flour production (and perhaps cheese makers deciding to work overtime).
If investments like this occurred randomly through time, it would add up to a fairly steady increase in GDP. But suppose they were highly correlated, perhaps because there is a burst of investment when a new technology becomes available. Then the overlapping investment periods would be characterised by a large increase in GDP, and the benefit reaping periods would lead to a sharp drop from this extreme level, although still to a level above the baseline. This pattern is sustainable: waves superimposed on a steadily-increasing straight line. It's the classic graph of business cycles in a growing economy.
My take is that ABCT describes our current situation very well, where absurdly low interest rates, subsidies and bailouts over recent decades have caused a monstrous misallocation of capital (and labour and land) into malinvestments, and all governments and central banks want to do is more of the same to delay the consequences (while aggravating them). But I think that the Austrian school should recognise that there could be other reasons for business cycles too: not doing so opens it up to being accused of being out of touch with the real economy. There can be unused capacity in the economy. Many schools of economics want to force it to produce against its own best interests. I'm happy to see it put to work of its own free will and to its own benefit. That leads on to the subject of credit, but that's for another day...
Only two scarce commodities is hardly an accurate mental model of reality. The Invisible Hand is at work on an infinity of commodities, wants and needs.
“Unused capacity” is a lifestyle choice for more leisure, unmeasurable by econometric models, but driven by Human Action choices. Each of us has a price at which we would prefer to work instead of play. The Unseen Hand we create with those infinite individual choices.
Only government incentives or disincentives act to upset that natural equilibrium. Pay people not to work, or punish them for working harder with higher taxes. Subsidize commodities or put tariffs on them.
ABCT explains this best.
Update: the always lucid and eloquent Frank Shostak has addressed this issue yesterday: https://mises.org/wire/central-bank-policy-interest-rate-vs-natural-rate
One of the problems with Wicksell's suggestion of inflation targeting is that prices should be *falling* in a more productive economy. Even an inflation target of zero would transfer wealth away from the rightful beneficiaries: those entrepreneurs, managers, workers and investors who have collaborated to produce more efficiently.
Thanks for your reply, with which I largely agree.
I only used 2 commodities in the example for simplicity of exposition, not because it's in any way related to the argument. When there is an opportunity, say because someone's just invented canals, people of their own free will may decide to give up some leisure, or some consumption, judging that they would prefer to swing a pick axe, produce TNT, or build narrowboats now in order to benefit in future from the value created by the investment. That's all I mean by "unused capacity" here. I generally don't like the phrase, because you can usually be pretty confident that the person using it is about to suggest manipulating people into doing something against their own interests, perhaps via subsidies or interest rate suppression.
I stand by my argument that it's perfectly natural when a new technology comes along for there to be short-term growth due to the good investments which it enables, followed by a period of reduced economic activity (technically a recession) when the investments are complete and the benefits can be reaped.
In that case later growth would be slower but there should be no absolute decline - if they really are good investments- and there will therefore be no recession.
I'm just talking about a decline in GDP from the *peak* of, say, mill-building, because of the reduction in capital production. If baseline GDP is X, the capital production year could be 1.5X, and then the subsequent years could be 1.1X.
That drop is essentially a recession, even though there's nothing wrong with it. People are choosing to resume leisure time, but enjoying a standard of living above the baseline due to their earlier capital production. Unfortunately, governments and central banks see the drop in GDP and think they need to "stimulate" the economy back to 1.5X (or more) by e.g. subsidising water mill production in deserts i.e. malinvestments.
Isolating any single economic activity, such as mill-building, from the infinite other economic activities that compete for one’s productive labor, is not realistic. Labor is fungible. If you don’t pay me enough, I take my labor elsewhere, in a free economy.
Resorting to GDPx econometric arguments ignores this reality.
GDP, if it could ever be accurately measured, remains A) the sum desires of the people who work, divided by the B) value of their productive output. B might be measured by bureaucrats who like to count beans, but A is beyond measure. Evidenced by the millions like me who left the rat race during the pandemic, because we valued our health and sanity more than wages.
Until the “macroeconomy” as constrained by overlords can reach equilibrium with us workers’ desires to be productive in an environment we find acceptable, there is no realistic way to measure “productivity” and “economic capacity.”
As a concrete example, consider how GDP and industrial output soared during WWII, as housewives went to work while their men fought, after a decade of government enforced deprivations. Individual motivation to produce in a national emergency overcame the stagnant reality of government policies restricting freedom of employment and personal prosperity.
I'm somewhat sceptical of GDP, particularly as measured in dollars, but I don't think it's controversial to say that there are fluctuations in the level of economic activity. My point is that fluctuations don't *have* to be a result of government actions.
People sometimes do extra work when there are benefits to be gained, especially capital production (e.g. canals). When the opportunities have dried up (e.g. there are enough canals now), it makes sense to ease off production and enjoy leisure instead. This can account for entirely natural fluctuations in economic activity.
That's not to say that governments don't cause fluctuations too. They absolutely do (often "justified" by trying to avoid a recession). And this can be extraordinarily destructive, rewarding malinvestment (e.g. building canals to nowhere), punishing prudence (e.g. forcing sensible canals to subsidise useless ones), and even undermining the foundations of a free economy (e.g. by debasing the currency).
Thanks for this...
Murray N. Rothbard
The Panic of 1819: Reactions and Policies
https://mises.org/library/panic-1819-reactions-and-policies
"This book would never have come into being without the inspiration, encouragement, and guidance of Professor Joseph Dorfman. I am also indebted to Professors Robert D. Cross, Arthur F. Burns, and Albert G. Hart for many valuable suggestions."
America's First and Second National Banks were quite prosperous for "the people" in America until Andrew Jackson killed America's Banks in favor of private banking.
Interest rates were set between lender and borrower.
“We only ask you to examine the history of the times, during the existence of the two Banks, and compare those times with the miserable present,” - Abraham Lincoln 1843 speech.
When the Federal Reserve Act took control of interest rates, they also took control of "public opinion" by "buying" media, education, and the political class.
"The Currency" The Special Currency Committee set up by New York Chamber of Commerce 1906 pg. 10
“By the control of its rate of interest and of its issues of notes it would be able to exert great influence upon the money market and upon public opinion. Such power is not possessed by any institution in the United States.”
The Federal Reserve Act of 1913 gave the power of "elastic" money to the private international bankers which was a violation of the Coinage Act of 1792 which made debasing money a felony punishable by death. Essentially, a coup d'état.
Furthermore, does anyone know why Ludwig von Mises did not discuss Washington, Hamilton, and the first congress "American System" of economics in "Human Action"?
It seems odd that Mises would dismiss the AmericanSystemnow.com in his writings.
Amazing write-up! It's like Economics in one article/e-mail, instead of "Economics in one lesson".
Who will buy the $5 trillion in Treasuries?
Perhaps the Chinese real estate investors? The epitome of malinvestment! They need something more fungible to escape the crash there.
Why? Wouldn't this devalue the Chinese Yuan?