'.."financial slavery" that grips the world .. are of high human and personal cost..'

Posted by ProjectC 
'..the current "financial slavery" that grips the world..'

- Jesús Huerta de Soto, Economic Recessions, Banking Reform, and the Future of Capitalism, October 28, 2010

'..the theorem of the economic impossibility of socialism..'

- Jesús Huerta de Soto, '..the theorem of the economic impossibility of socialism .. is fully applicable to central banks..'

'The safeguards erected by the liberal legislation of the 19th century to protect the bank-of-issue system against abuse by the state have proved inadequate..'

- Ludwig von Mises, The Problem of the Freedom of the Banks

'Politicians should also liberate themselves from the embrace of the banks .. a general awareness that high government debt is inappropriate -- because it undermines democracy..'

'..Secrecy is the domain of authoritarian states.


The banks and investment firms now play the role once held by the gods. Hardly anyone dares to criticize them, and fear of their wrath guides the behavior of politicians. Many are reluctant to speak frankly, while others seek refuge in lies.

Under such conditions, democracy has lost its dignity. And that is dangerous. The foundation of any dictatorship is the tacit or open threat of violence against citizens. Their fear supports the system. The basis of democracy is respect among citizens. Their approval supports the system. If this approval disappears, democracy crumbles.


Politicians should also liberate themselves from the embrace of the banks. This is only possible if the practice of taking on massive debt finally comes to an end. Only a largely debt-free nation is a sovereign nation. The debt brake is a good instrument, but it would be even better if it were supplemented by a general awareness that high government debt is inappropriate -- because it undermines democracy and shifts the economic burden to future generations.'

- Dirk Kurbjuweit, Escaping the Clutches of the Financial Markets, 06/03/2011

'..the current monetary system, based on credit expansion..'

'..the current monetary system, based on credit expansion, has made it customary for booms and crises to disturb economic development. In other words, it appears as if “manic-depressive” behavior were required of a market economy.

Indeed businessmen, journalists, politicians, union members, and economic agents in general have come to consider the artificial expansionary phase characteristic of a boom to be the normal stage of prosperity, which should be sought and maintained in any way possible. By the same token, expansion’s inevitable consequences, i.e., crisis and recession, are considered a very negative stage which should be avoided at all costs.[55] Economic agents do not recognize the recession as the inevitable result of artificial expansion, and they fail to realize it has the virtue of revealing the errors committed and facilitating the recovery and readjustment of the productive structure.'

- Jesús Huerta de Soto, 'The "Manic-Depressive" Economy .. spirit becomes corrupted .. are of high human and personal cost..'

[55] The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the mal-investment and the overconsumption of the boom period and that such an artificially induced boom is doomed. (Mises, Human Action, p. 575)

Thus it is a grave error to believe real wealth is destroyed by the stock market crash which announces the crisis. On the contrary, the economic destruction takes place much earlier, in the form of generalized malinvestment during the previous stage, the credit boom. The fall in the stock market merely indicates economic agents have finally taken notice of this phenomenon. See also section 14.