Government Debt Default, How (Not If) Will it Happen

http://www.marketoracle.co.uk/Article15219.html

by Gary North

I have surveyed the Austrian School’s theory of money. This theory began with Ludwig von Mises’ “Theory of Money and Credit” (1912). I presented Mises’ theory of fractional reserve banking and the creation of the business cycle in my mini-book, Mises on Money (2002).
The previous parts of this series are on-line here.

I have done my best to get across a line of reasoning regarding money. This line of reasoning is not shared by other schools of economic thought. To the extent that it is understood by the decision-makers in the governments of the world and central banks, it is resisted. It is regarded as old-fashioned and out of touch with newer, more scientific theories of money and banking.

The crisis of 2008 has led to a revival of interest in the Austrian School’s theory of the business cycle. Why? Because several Austrian School economists and newsletter writers warned of the looming crisis. They did so two years before it hit. These predictions were dismissed as radical and out of touch. The most widely viewed debate over this matter – after the fact – took place on CNBC in 2006. Peter Schiff warned of the recession. Arthur Laffer dismissed it.

Finally, the Wall Street Journal ran an article on Mises’ prediction of the Great Depression. The article ran on November 6, 2009. Better late than never.

..Read the rest, it’s enlightening..

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