'Ethical problems of production have been assessed in a great number of industries, ranging from agriculture to textile manufacturing in developing countries to pharmaceuticals. Today only a few important industries have escaped such scrutiny. The most important of these is the production of money. Money is omnipresent in modern life, yet the production of money does not seem to warrant any moral assessment. (2008, p. 1
pdf)'
- Professor Jörg Guido Hülsmann (
The Moral Issues of Money) - (
Money (and Credit) Production)
'The mathematical economists refuse to start from the various individuals' demand for and supply of money. They introduce instead the spurious notion of velocity of circulation fashioned according to the patterns of mechanics.'
- Ludwig von Mises,
Human Action, Chapter XVII. Indirect Exchange
'Ironically, the bigger the Bubbles get the less conspicuous they appear to most.''I’ll argue that today’s debt to GDP ratios are understating the severity of debt problem in many ways: measures of debt are not inclusive of massive contingent liabilities; debt service costs have been pushed down by the Federal Reserve and global monetary policies; and GDP is being inflated by government spending excess and a lot of other “output” that won’t support the capacity for our economy to repay its obligations. But like so many aspects of this Bubble, there is gray area enabling the optimists to take the other side of the argument.
The late nineties technology/Internet Bubble was spectacular, and many (including Mr. Paul Volcker) worried that it was of sufficient scale to bring the system down. Yet, from a Credit standpoint, it really wasn’t systemic. The Bubble fueled huge distortions in the tech sector, boosted home prices in a select group of cities and flooded California with tax receipts (which they quickly spent). The mortgage finance Bubble was the first systemic Bubble – impacting incomes, asset prices, corporate cash flows and government finances throughout the economy. The Creditworthiness of federal debt proved the key – really, the momentous – advantage the system used to survive the bursting of the mortgage/Wall Street Bubble.
The government finance Bubble is the second – and concluding – systemic Bubble. It is bigger in dimensions than the mortgage Bubble and is having more problematic systemic effects on incomes and the financial markets. In particular, acute vulnerabilities resulting from the previous Bubble period now ensure that, in particular, the municipal debt and mortgage markets remain susceptible to any retrenchment in federal spending (or rise in market yields). And, importantly, there is no potential Creditworthy debt issuer of last resort waiting in the wings to bail out the system when market confidence in U.S. government debt falters. Ironically, the bigger the Bubbles get the less conspicuous they appear to most.'
- Doug Noland,
S&P Commences the Process, April 22, 2011
Context'..the ballooning of outstanding public debt..' - Jean-Claude Trichet
'Ethics is the primary.' - 'The Myth of Efficiency' - Murray N. Rothbard
The Austrian School; Fear the Boom, not the Bust - Critique of Marxism