Mises escreve a apoiar Ron Paul (sort of)

Mrs. Greaves, Ludwig von Mises's personal assistant, recently sent this letter to the editor:

Friedman and Schwartz in their massive history of money apparently accepted that Keynesian explanation, at least in part -- attributing the stock-market crash of October 1929 to a “speculative investment bubble,” the cause of which was “a somewhat controversial topic.” But the cause of that “bubble,” the seeds of the crisis, were actually inherent in the very principles on which the Fed was founded. (...)

The Fed was to create a “flexible” money supply to satisfy the “needs of business” and to serve as the lender of last resort to banks in crisis. Thus its very purpose was inflationary. It fostered “easy money” by making loans available at relatively low interest rates. The new “easy money” lured businessmen to undertake enterprises they would not have considered profitable at market interest rates. Thus business boomed. The stock market flourished. If there had been no boom, there would have been no monetary contraction. Thus, the Fed’s responsibility for the depression extends to the preceding boom.(..)

It was in 1912 in his first book on monetary theory that Ludwig von Mises laid the groundwork for the Austrian Theory of the Business Cycle. He pointed out then that the monetary boom/bust cycle stemmed from the encouragement given by central banks to expand credit. He described the process in some detail in 1928:

(...) The fact that each crisis, with its unpleasant consequences, is followed once more by a new “boom,” which must eventually expend itself as another crisis, is due only to the circumstances that the ideology which dominates all influential groups -- political economists, politicians, statesmen, the press and the business world – not only sanctions, but also demands, the expansion of circulation credit

(...) But the Fed faced a dilemma: to expand and to keep on expanding the quantity of money would lead to a catastrophic boom and runaway inflation. But when and if it stopped expanding it would cause an economic crisis. Friedman apparently recognized this later. But as far as I know, he gave no indication that he realized it was inherent in the very principle on which the Fed was based. But then he was an inflationist; he believed that only by constantly and steadily increasing the money supply, to keep abreast of increases in production and population size, can an economy prosper." BETTINA BIEN GREAVES

Conclusão? Abolish the FED (ok, mais devagar, permita-se que todos os BCs deste mundo enfrentem a concorrência de uma relíquía do passado). Ron Paul Revolution.