The current market correction or collapse of the stock market is a result of the business cycle, the boom and bust. From credit expansion to money printing, stock prices and the market have been artificially soaring, and the Federal Reserve can be thanked for this. There is no doubt that further losses will come, whether that’s this week or in 2016 or 2017 remains to be seen.
The question that should be asked right now is: is this the bust of the boom cycle or just a hiccup in this boom period? Only time will tell. Whatever the case, the Dow Jones shed hundreds of points, while the Chinese markets wiped away all of 2015’s gains!
With that being said, this is a superb and topical quote from Austrian economist Ludwig von Mises:
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of the voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
Remember, artificial credit expansion is behind the business cycle, and a lot of credit has been produced since the economic collapse.
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