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Friday, June 26, 2009

The Grand Illusion

The meddlers claim that their central planning will do a better job of directing the economy than free people will do on their own. Instead of letting honest lenders and borrowers set interest rates, for example, the interveners set them – much lower than they would otherwise probably be (we don’t really know…we never get a chance to find out)… Rather than let companies fail in the open market, the feds prop them up. “They’re too big to fail,” they say. And rather than let people spend their own money according to their own preferences, the feds borrow trillions of it – on the pretext that only Treasury bonds are safe – while simultaneously undermining the value of the dollar through excess debt and excess currency creation.

The illusion is so big we scarcely see it – that an economy…even one involving more than a billion participants, speaking hundreds of different languages in more than a hundred different countries and 24 different time zones…can be successfully ‘managed’ by a group of mountebanks who missed the biggest financial event in history.
--from "What’s the Purpose of a Correction?" by Bill Bonner (6/25/2009)

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