AUSTRIAN ECONOMICS ADDICT

The execution of Robespierre and his supporters on 28 July 1794 (Photo credit: Wikipedia)

This article at Zero Hedge, “From Currency Debasement To Social Collapse“, talks about processes that are put into play when the currency is debased. The inevitable destruction of the present capital structure, leading to a loss of wealth, is one process that more of us are starting to understand because we have been operating inside of this counterfeiting reality since the mid 90’s. The tech bubble and the housing bubble  destroyed capital which was misallocated during these bubbles. The present financial and asset bubble will destroy more misallocated capital when the Fed has to pull out the expansionary rug from underneath it.

It’s uncomfortable to allow a passing thought about social collapse to enter our mind. To actually look at some present and historical examples of debasement and collapse is truly disconcerting. As unpleasant as this is, we must pay attention to the blips on the radar screen which represent the social unrest in the European countries, especially Greece. The EU is farther down the road of currency debasement then we are. Paying attention to what happens there, gives us an idea of our future if we continue in this direction. These problems in the EU are a modern-day history being written before our eyes. We can choose to see the clear reality of the situation using the lens of common sense and Austrian economics, or be fooled by looking through the rhetorical glasses of politicians, central bankers, intellectuals, and journalists. The article, which you can link to above, gives four historical examples of currency debasement and the societal problems that followed. No action happens in a vacuum. Unintended consequences are the rule rather than the exception.

This entry was posted on October 20, 2012 at 9:06 pm and is filed under Econ. 201, Government and Politics. You can subscribe via RSS 2.0 feed to this post's comments.

Tags: Currency Debasement, European Central Bank, Federal Reserve System, Greece, Social Collapse