The Greater Depression
In his article The Greater Depression and What You Should
Do About It, Doug Casey talks about what a business cycle is and how the federal government distorts the market through regulation, taxes and inflation. This distortion causes mis-allocations of capital, which in turns causes busts. These busts are very important as they cleanse away the bad investments. But our Federal Government, fearing a depression, keeps dumping liquidity into the markets to stave off a downturn. But this is only putting off the inevitable.
From the article:
But, in a nutshell, government intervention in the economy – through taxes, regulation and, most importantly, currency inflation – causes distortions and misallocations of capital that must eventually be unwound. The distortions degrade the general standard of living, and the economy goes into a recession (call that an incomplete cleansing). Or it goes into a depression – wherein the entire sickly structure comes unglued.
This is a message that is sadly lacking in the mainstream news media:
Oddly enough, there’s one glaringly obvious thing that is not in the news today at all. That’s the fact that interest rates – nominal rates too, but especially “real,” after-inflation rates – are close to their lowest levels in history. And in today’s extraordinarily risky environment, they’re artificially low. This, and the reasons for it, should be headlines.
But sadly, not. Most Americans are going to be caught totally off guard. They will march off and vote for Obama’s mislabeled “change,” continue massive domestic spending, and perpetuate the debt-based mentality of the American consumer, taxpayer and voter. Ron Paul’s message of fiscal responsibility seemed to fall on deaf ears–only a few million Americans listened and reacted to the wake up call of Dr. Paul.
Sometimes I wonder why I post these articles and if anyone is even reading them. :/
