Friday, 12 October 2018

QotD: "...Then comes the panic, the breakdown. And the depression starts.”

“The advocates of public control cannot do without [monetary] inflation. They need it in order to finance their policy of reckless spending and of lavishly subsidising and bribing the voters.” 
    “One day, because they realise for some reason or other that they must stop credit expansion, the banks do stop creating new credit to lend. Then the firms that have expanded cannot get credit to pay for the factors of production necessary for the completion of the investment projects which they have already committed themselves. Because they cannot pay their bills, they sell off their inventories cheap. Then comes the panic, the breakdown. And the depression starts.” 
        ~ Ludwig von Mises, from his first great treatise linking the central banks' monetary cycle with the economy's business cycleA Theory of Money and Credit
[Hat tip Greg Hairston]


  1. About depression. I did a count. Almost every blog I read > from the Freedom fighter's Journal > the Civil War> to >Ol'Remus at the Woodpile report down there North Carolina has a side bar with Ayn Rand quotes.
    I felt quite bad, I might have to read the Fountainhead.

  2. I add this Von Mises quote:
    There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved.”

    – Ludwig von Mises


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