Booms and Busts

Is “austerity” in the future for the US Government? Awash in debt and facing economic crises, the government may have to go on a diet, something neither Congress nor the president want to do.

Some economists fear that excessive government debt will lead to an economic crisis and recession. However, the real threat to the economy is Federal Reserve-supported fractional reserve lending that helps to set off an unsustainable boom.

Are economic crashes inevitable, or are they the direct result of government meddling? History shows a pattern—but politicians and central bankers refuse to take the blame.

Although tariffs and other issues are getting the most news coverage, a harbinger of recession is looming: the slow collapse of commercial real estate values. This is the result of reckless policies at the Federal Reserve and the Fed cannot fix it.

Thanks to the reckless policies of the Federal Reserve, businesses are now facing the realities of an economy ravaged by inflation. Look for more signs that say “Closing.”

President Trump has indicated that a recession could be coming and the pundits are playing the blame game. Don‘t look to anyone in Washington for a coherent explanation for the downturn, however. Look to the Austrians instead.

Despite the government‘s efforts to prop up real estate prices, the markets are having the last word. Commercial real estate is especially vulnerable to the latest trends.

Mainstream economics tells us that we need a growing money supply to keep an economy growing. But what if a growing money supply diminishes economic growth? The Austrians have something to tell us about money growth.

Perhaps John Maynard Keynes' best con job was convincing people that a growing economy needs inflation, lots of inflation. As David Gordon points out, however, Ludwig von Mises eloquently explained why inflation undermines the free market economy.

The Federal Reserve‘s reckless policies have created havoc in the housing markets, with the government and monetary authorities helping to create the apartment bubble, which is in the process of bursting. As usual, bad policies bring bad people into the markets.