Interview: Austrian Economics Would Destroy The World
I could have used many different headlines to announce this interview (which was conducted by Cris Sheridan for the outstanding financial website, Financial Sense). I could have used:
“Pray For The Dollar Standard”
“How Our International Monetary System Works”
“Why The Chinese Yuan Will Never Be An Important International Reserve Currency”
“There Will Be No Return To The Gold Standard”
But I picked the most provocative one I could think of to get your attention: “Austrian Economics Would Destroy The World”. I want as many people as possible to listen to this free interview. That headline conveys an important and true message. If our governments were to adopt the policies advocated by today’s spokesmen for Austrian Economics (balancing government budgets, disbanding the central banks, returning to a gold standard), not only would our global economy immediately disintegrate, our entire global civilization might very possibly collapse into a Mad Max world.
Think of our situation in terms of the following analogy. The Global Economy is like a Hot Air Balloon that has soared a mile up into the sky. Credit is the Hot Air that caused the balloon to fly up. The great Austrian Economists, most notably Ludwig von Mises in 1912, warned us that Credit would cause the economy to soar to dangerous heights and that we should not allow that to happen. THEY WERE ABSOLUTELY RIGHT. But, today, the policy advice from the current generation of the Austrian School tells us that we must now cut off all the Hot Air (cut off the Credit). If we do, our Hot Air Balloon, the global economy, will crash to earth and we, the passengers, will all die. It’s that simple.
Every passenger in that balloon – all seven billion of you – needs to understand that. It’s too late to cut off the Hot Air (Credit).
If you listen to this interview, you will understand that. Listen to it and then share this blog with your friends and colleagues. It is important that this message is understood by as many people as possible, because the Austrian School continues to convert a growing number of followers in the United States and around the world – and because their current recommendations are toxic.
Then, if you have not already done so, subscribe to my video-newsletter, Macro Watch. There, you will learn how the government has been managing the economy since World War II, what steps the government is likely to take next and how those measures are likely to impact the global economy and your investments.
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Finally, thanks to Cris Sheridan and Financial Sense for always asking all the right questions.
Here’s the link to the interview: