Fake booms and their consequent busts are directly linked to financial cycles, which in turn reflect the swings in money creation. Fiat money lies at the heart of this process, writes Antony P. Mueller. This audio Mises Daily is narrated by Steven Ng.
The true tragedy of a fiat money regime is that bogus economic growth by way of monetary and fiscal stimulus can go on only until either the collapse of hyperinflation brings an end to the artificial boom or the amount of accumulated debt makes state bankruptcy inevitable.
The recent improvement of the global economy, with particularly high economic- growth numbers for the United States, is just one more deception in a long series of deceptions that have plagued policy makers and investors.
What we need is something else: the establishment of a different kind of monetary system , one that uses competitive markets in the area of money and banking, and that eliminates the currency monopoly of the state.
As long as governments and central banks continue to focus on the monetary symptoms of the "secondary depression" and continue to ignore the structural aspects of the "primary depression," they act like quacks.