“Where do they get the gall to spend billions pleasuring Wall Street while Main Street bleeds jobs?”
“Policy intervention distorts the economy and drives a wedge between Wall Street and Main Street. The majority of the people do not see the discrepancy between the growth of financial wealth and the stagnation of the real economy.
We live not only in a time of fake news but also in the era of fake economic growth. The performance of the economies of the industrialized countries since 2010 is a prominent case of deceptive economic growth. This economic recovery is not the result of a strengthening of the productive forces of the economy, but is due to a massive expansion of liquidity. Central banks created a monetary avalanche that has gone mainly into the financial markets and has become a source of deception for investors. In real terms, the economy has not advanced very much since the financial crisis of 2008. The valuation of financial assets has decoupled from the real economy.”
Fractional-reserve banking is responsible for the crises and recessions that repetitively grip the economy
Defend the cause of the weak and fatherless; rescue the weak and deliver them from the hand of the wicked
Chapter 13 of the book: The Ethics of Money Production: The Cultural and Spiritual Legacy of Fiat Inflation
A general, but serious, reason to read this book— The Skyscraper Curse: And How Austrian Economics Predicted Every Major Economic Crisis of The Last Century — is to avoid being one of the millions who will be duped when the next crash (bust) occurs. Millions were and continue to be duped as to the reason for the boom leading up to 2007 and 2008 and why the bust occurred in 2008 relating to real estate.
Thornton begins with an important discussion of money creation and Richard Cantillon, writing: “… Richard Cantillon (1680s-1734?) [was] the first economic theorist and proto-Austrian economist …[he] showed how the interest rate and the money supply can create changes and distortions in the economy, a phenomenon now referred to as “Cantillon effects.”
Monetary inflation is affected by who gets the money and credit first and who gets it last. As fiat money is created by central banks, private banks are in a position to expand the amount of loans they make. The wealthy have established relationships with the banks, and they have the real estate and assets to provide collateral for the loans. Large, established companies and wealthy individuals are in favorable positions relative to small businesses and people with low or average incomes. The loans allow big companies and wealthy individuals to invest in capital goods during the boom phase of the business cycle. Central banks thereby create artificial inequality and poverty. This is the primary Cantillon effect of redistributing wealth.”
Thornton shows that the biggest winners come from the Federal Reserve and the bank system’s creation of newly created currency and credit are the U.S. Government, its large contractors, such as weapons manufacturers, big banks, and Wall Street. The losers are also revealed: the labor class consisting of private-sector workers, those on pensions or fixed incomes.