Blogs > Liberty and Power > Mike Whitney at Counterpunch quotes Mises and slams Greenspan

Dec 19, 2007 1:29 am

Mike Whitney at Counterpunch quotes Mises and slams Greenspan

Even if neocons and neoliberals won't listen to radical critiques of the Fed, it looks as if one person who regularly posts at Counterpunch is listening.

Mike Whitney looks into the abyss and sees The coming collapse of the modern day banking system.

"The economist Ludwig von Mises is more succinct in his analysis:

"There is no means of avoiding the final collapse of a boom brought on by credit expansion. The question is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

Then having quoted Mises in support, Whitney cites Milton Friedman on (price) inflation:

"This admission proves Greenspan's culpability. If he knew that stock prices had doubled their value in just 3 years, then he also knew that equities had not risen due to increases in productivity or demand (market forces). The only reasonable explanation for the asset inflation, therefore, was monetary policy. As his own mentor, Milton Friedman famously stated, 'Inflation is always and everywhere a monetary phenomenon'. Any capable economist would have known that the explosion in housing and equities prices was a sign of uneven inflation. Now that the bubble has popped, inflation is spreading like mad through the entire economy."

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