Getting Closer to Debasing the Currency - Thorsten Polleit - Mises Institute

Thorsten Polleit writes:

"As the unhampered market finds a new equilibrium via price changes, it exposes malinvestment. Some of the investments made and some of the jobs created prove to be unprofitable. It is the process of altering prices for capital and labor that brings the economy's production structure back in line with people's preferences. In that sense, a so-called crisis, or bust, is actually a correction of bad decisions made in the past; the term crisis would appear to be inappropriate."

"In fact, the term crisis should be attributed to the boom period. It is here where scarce resources, mostly due to artificially reduced interest rates through monetary policy, are being channeled to unprofitable businesses. While the period of building up malinvestment is typically hailed as a period of economic expansion, it is actually a period of squandering."

Getting Closer to Debasing the Currency - Thorsten Polleit - Mises Institute