12/24/2023 0 Comments The ominous parallels free downloadThe essential economic effect of such saving is to release productive resources that a borrower may use for capital investment. It has been crystal-clear for a long time that it was a typical bubble economy, being defined as an economy where unusually sharp rises in asset prices fuel extraordinary borrowing and spending binges, either by businesses (Japan) or by consumers (America).Įstablished economic theory, by the way, has a strict measure for "excess" credit – all credit in excess of available savings from current income that is not spent for consumption. Moreover, it has historical experience on its side.Īssessing the present economic situation in the United States, the key point to realize is that for years it has been exposed to the most inordinate credit excesses in history. This seems to be exceedingly straightforward logic. It says that the severity and length of depressions depends critically on the kind and the magnitude of the maladjustments and dislocations that have developed in the economy and its financial system during the preceding boom. I am a great believer in the logic of Austrian theory. Or was it excessive monetary tightness after the crash, during the 1930s? That is American opinion, as indoctrinated since the 1960s by Milton Friedman. Was it the excessive monetary looseness before the stock exchange crash? That is the opinion in Europe, strongly influenced by Austrian theory. Today, it’s the world’s greatest debtor, running a monstrous deficit in current account and piling up trillions of foreign debts.Īn old bone of contention between American and European economists is at what time the American Federal Reserve made its decisive policy mistakes that determined the protracted depression of the 1930s. During the 1920s, America was the world’s leading creditor country, running a chronic current surplus. Another difference of crucial importance is in the state of the balance of payments. However, the borrowing and spending excesses of the 1990s vastly exceeded those of the 1920s. boom episodes were alike in their heavy disposition towards consumer spending. During the 1920s, America flooded the world with credit, acting as the world’s lender of last resort, while in the 1990s it became the world’s consumer of last resort, flooding the world with unprecedented excesses in consumer spending. Yet there exists a conspicuous difference between the two cases of American global economic predominance. economy in the prior boom as well as in the following downturn. The most striking common feature of both periods is the dominant role of the U.S. This has but one precedent in history: the Great Depression of the 1930s. in his minivan capitulates altogether?įor the first time in the more than 50 years since World War II, the world is in the grips of a synchronized global economic downturn. Richebacher asks: Will it be long before Johnnie Q. ![]() But in reality, during the second quarter consumer spending fell to an annual rate of 1.9%. Notes: This is a companion to the four-part National Security and Individual Freedom series.To lead a recovery of the economy, US consumer spending has to rise by 3-4%. Think nothing that we do not wish you to think.Ĭredits: For other Alembic Files or audios done by contributors to this series, go to. See nothing that we do not wish you to see.īelieve nothing that we do not wish you to believe. Hear nothing that we do not wish you to hear ![]() The faithful will swallow it whole so long as logical reasoning is never allowed to be brought to bear on it.' 'The church has realized that anything and everything can be built upon a document of that sort, no matter how contradictory or irreconcilable with it. ![]() Hate is more enduring than aversion and the impetus to the mightiest upheavals on this Earth has at all times consisted less in scientific knowledge dominating the masses than in the fanaticism which inspired them and sometimes in hysteria that drove them forward.' Love succumbs less to change than respect. Hitler: 'Faith is harder to shake than knowledge. Summary: In this segment, the salient point is driven home that to manipulate the masses, it' s essential to dispense with facts and reality to stress that action is primacy over thought. Program Information The Ominous Parallels - 4
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