07/10/2017 - Thorsten Polleit: “The Artificial Boom Created By Central Banks Must At Some Point Turn Into Bust”
“The artificial boom created by central banks must at some point turn into bust, as the Austrian business cycle theory informs us. The boom turns into bust either by central banks taking away the punchbowl of low interest rates and generous liquidity generation; or the commercial banks, in view of financially overstretched borrowers, stop extending credit; or ever greater quantities of fiat money need be issued by central banks to keep the boom going, inflating prices so that ultimately people start fleeing out of cash. In such an extreme case, the demand for money collapses, and then a Super-Super-Bubble pops.”
