by Jay Zawatsky
Mises.org
Describing what he called the “crack-up boom,” Ludwig von Mises, the great Austrian economist, said:
The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation — which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system.
Or the banks stop before this point is reached, voluntarily renounce further credit expansion, and thus bring about the crisis. The depression follows in both instances. (emphasis added)
Although it would be the wiser policy, there is no evidence that the world’s central bankers have the wisdom, either individually or collectively, to select the second alternative. More specifically, they lack “the courage to act” (as Ben Bernanke’s recent, self-congratulatory memoir was so ironically titled); they and their political, big finance and big business cronies are afraid to swallow the “d-pill,” the economic medicine named “depression.”