Chieftain1776
10-20-2008, 04:38 AM
For those of you who know about the usually conflicting Austrian economic theory and the mainstream "Chicago School" monetarist theory the following quote is pretty remarkable:
How did we get into this mess in the first place? As in the 1920s, the current "disturbance" started with a "mania." But manias always have a cause. "If you investigate individually the manias that the market has so dubbed over the years, in every case, it was expansive monetary policy that generated the boom in an asset.
"The particular asset varied from one boom to another. But the basic underlying propagator was too-easy monetary policy and too-low interest rates that induced ordinary people to say, well, it's so cheap to acquire whatever is the object of desire in an asset boom, and go ahead and acquire that object. And then of course if monetary policy tightens, the boom collapses." http://online.wsj.com/article/SB122428279231046053.html
She goes on to skewer Alan Greenspan and gives a Ron Paul-like assessment of the value of the assets and her opposition to bailing out anyone or injecting "capital". Pretty right on the mark for a non Austrian. Definitely a must read.
How did we get into this mess in the first place? As in the 1920s, the current "disturbance" started with a "mania." But manias always have a cause. "If you investigate individually the manias that the market has so dubbed over the years, in every case, it was expansive monetary policy that generated the boom in an asset.
"The particular asset varied from one boom to another. But the basic underlying propagator was too-easy monetary policy and too-low interest rates that induced ordinary people to say, well, it's so cheap to acquire whatever is the object of desire in an asset boom, and go ahead and acquire that object. And then of course if monetary policy tightens, the boom collapses." http://online.wsj.com/article/SB122428279231046053.html
She goes on to skewer Alan Greenspan and gives a Ron Paul-like assessment of the value of the assets and her opposition to bailing out anyone or injecting "capital". Pretty right on the mark for a non Austrian. Definitely a must read.