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The Past: Abandoned principles and misguided policies

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Policy Mistakes

  • Unbalanced Budgets
  • The End of Sound Money
  • Promoting Trade with no concern for the balance of trade
  • Financial Sector Deregulation
  • Economic Management through bubble creation.


  • The collapse of Bretton Woods
  • Trade Imbalances
  • Flaws in The Dollar Standard: no automatic adjustment mechanism.
  • Globalization: trade imbalances, disinflation, interest rates
  • Financing the trade imbalances with paper money creation
  • Free Trade was good; Debt Financed Trade is bad


  • Capital Inflows caused economic bubbles in the surplus countries
  • Capital inflows caused the economic bubble in the US
  • Credit growth drove economic growth in the US
  • How credit creates the bubble: the mechanics of a credit bubble.
  • Why bubbles pop.
  • Capital flows and banking crises.
  • Economic management through bubble creation in the US
  • Bernankism
  • Why are interest rates 0%?
  • Quantitative Easing

The Consequences

  • Capitalism becomes Debtism
  • Debtism collapses; Statism fills the gap.
  • Saving the Financial Sector
  • Supporting Aggregate Demand
  • The Corruption of Capitalism
  • The Great Depression and The New Depression
  • The conventional view of the causes of the Great Depression is wrong.

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