It would appear that the crack-up boom, long predicted by Von Mises, has finally started to happen, after forty years, following the inflationist Keynesian dream of creating wealth via a digital printing press launched by Richard Nixon in 1971.
It was a terrible dream while it lasted, with one inflation after another to fix the previous problems caused by the previous inflations. With the hilarious Kabuki Theatre of the US debt ceiling raise (no doubt, never to be repeated as the US government takes control of its finances), and the Italian and Spanish debt implosion in Europe, we’ll see if this is ‘the’ crack-up boom, or just another tremor on the way, but we certainly live in interesting times.
Who would have thought in 1931, when the UK came off the gold standard, that an ounce of gold – which had been worth £4 for over a century – would now be easily over a £1,000 pounds.
It’s going up a lot further yet, before the ‘Great Monetary Reset’ takes place. Hold onto your hats.
While you’re doing that, let’s see what Mises said about the crack-up boom, in Human Action:
Economics recommends neither inflationary not deflationary policy. It does not urge the governments to tamper with the market’s choice of a medium of exchange. It establishes only the following truths:
1. By committing itself to an inflationary or deflationary policy a government does not promote the public welfare, the commonweal, or the interests of the whole nation. It merely favors one or several groups of the population at the expense of other groups.
2. It is impossible to know in advance which group will be favored by a definite inflationary or deflationary measure and to what extent. These effects depend on the whole complex of the market data involved. They also depend largely on the speed of the inflationary or deflationary movements and may be completely reversed with the progress of these movements.
3. At any rate, a monetary expansion results in misinvestment of capital and overconsumption. It leaves the nation as a whole poorer, not richer. These problems are dealt with in Chapter XX. [p. 471]
4. Continued inflation must finally end in the crack-up boom, the complete breakdown of the currency system.
5. Deflationary policy is costly for the treasury and unpopular with the masses. But inflationary policy is a boon for the treasury and very popular with the ignorant. Practically, the danger of deflation is but slight and the danger of inflation tremendous.