'..the economic analysis of the necessary consequences of intervention in the free market by bank credit expansion.'<blockquote>'Brazil is undergoing what is considered its worst economic crisis in seventy years, and there is usually no agreement when it comes to the causes of this situation..
..
As we have seen, most of what the Austrian business cycle theory described can be well applied to Brazil. It is important to admit that other factors also played important roles, such as the price of the dollar relative to the real and the slowdown of China’s demand on Brazilian commodities, but most of them were usually, and to some extent, only a consequence of the policies that we have already analyzed. The bottom line is that the country went through a major credit and money supply expansion, together with years of low interest rates. It is crucial to note that,
contrary to other explanations, “Mises’s theory of the trade cycle … meshes closely with a general theory of the economic system. The Mises theory is, in fact, the economic analysis of the necessary consequences of
intervention in the free market by bank credit expansion.”
Consequently, we can see how Brazil’s current crisis is nothing but an outcome of government’s meddling with the market..'
- Lucas Vaz,
Brazil's Easy-Money Problem, January 26, 2016</blockquote>
'..China is now lopsidedly dependent on ever larger inputs of local bank credit to keep sputtering growth from declining further..'<blockquote>'China’s raging battles with currency speculators are unlikely to end as happily for the country. That’s because turmoil in the currency markets reflects a much more perilous imbalance than an overvalued yuan: China is now lopsidedly dependent on ever larger inputs of local bank credit to keep sputtering growth from declining further.
..
..the problem stems from higher up. President Xi Jinping has centralized economic policy-making in his own hands, and he doesn’t take criticism well. Late last year, as economic uncertainty climbed, the Communist Party issued disciplinary instructions outlawing “improper discussion” in its ranks, shutting off yet more feedback loops.
As is often the case when the leadership feels besieged, state media is lashing out at foreigners. Last week, Xinhua News Agency blamed “reckless speculations” and “vicious shorting activities” from overseas for the turmoil, and warned of unspecified “severe legal consequences” for those responsible.
Such threats, if carried out, will only exacerbate the crisis of confidence. Speculators aren’t just shorting the currency; they’re selling China itself.'
- Andrew Browne,
Yuan’s Fall Is Just ‘Noise’ Amid Deeper China Woes, January 25, 2016</blockquote>
Context (Haptopraxeology) - '..We have lost three centuries as a result of ignoring our scholars!'<blockquote>
The Fed Passes the Buck: Blame Oil and China, January 25, 2016
'The collapse of the Soviet Union .. U.S. finance was becoming increasingly state-directed..'Banking Reform</blockquote>