Boom and Bust, From the Mises Center

This last year I have learned much about central bankers, fiat money, what causes inflation, The Fed,etc. From the Lew Rockwell Site, Mises Institue and from Gary North's. It's nothing like learning something new and then watching it happen right in front of your eyes to drive it home.

Don't Blame Subprime Lenders!

With all the rhetoric about how subprime mortgage lenders have behaved badly and dangerously, few if any well-known writers have pointed out how impossible it becomes to avoid a Fed-induced monetary boom.

Instead, pundits dismiss the Austrian Business Cycle, saying that entrepreneurs can easily detect "funny money."
After all, hasn't it happened before?

The whole entrepreneurial class is, as it were, in the position of a masterbuilder whose task it is to erect a building out of a limited supply of building materials. If this man overestimates the quantity of the available supply, he drafts a plan for the execution of which the means at his disposal are not sufficient. He oversizes the groundwork and the foundations and only discovers later in the progress of the construction that he lacks the material needed for the completion of the structure. It is obvious that our masterbuilder's fault was not overinvestment, but an inappropriate employment of the means at his disposal. (Human Action, chapter 20, section 6)

Many writers even ignore any attempt at first-cause explanation. For example, some writers characterize the recent mortgage boom as "irrational exuberance."
(Recently I found an excellent one-line refutation by Gerard Jackson: "You can't spend exuberance.")

So why would a businessperson choose to do such a thing once they've seen several business cycles? Because, even though business investors know that the bust will come, it makes no sense to refuse funds while other businesses are using the new funds to compete!...

whole thing here