Ludwig von Mises Quotes

Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump.

Long before we wake up from our dream of prosperity through an inflated currency, our gold … will have vanished and no rate of interest will tempt it to return.

Great prosperity is coming. It will be tremendously increased if we can extend reasonable credit to our customers.... To maintain our prosperity we must finance it.

The second evil arising from the practice of banking, has its origin, in the system of credit itself; and the shock which, as it is rounded on prevailing opinion, it is liable to receive from whatever shakes public confidence.

I think that this is the most significant financial crisis in the post-War period for the United States, and it has in fact a global reach.... I think it is extraordinarily important to understand that, as we have seen in many previous examples of different countries and different times, choking up of credit is like taking the lifeblood away from the economy.

The United States economy is like a poker game where the chips have become concentrated in fewer and fewer hands, and where the other fellows can stay in the game only by borrowing. When their credit runs out the game will stop.

Not only have government bills been dishonored and the interest on the public debt remains unpaid, but … so completely empty is the Treasury and destitute of credit, that funds cannot be obtained to defray the ordinary expenses of the different departments.

The 'boom-bust' cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.

Depression is the aftermath of credit expansion.

In fact, without any exaggeration, the current mechanism of money creation through credit is certainly the "cancer" that's irretrievably eroding market economies of private property.

Of course I'm troubled by huge consumer debt levels - we've pushed consumer credit very hard in the US. Eventually, if it keeps growing, it will stop growing. As Herb Stein said, "If something cannot go on forever, it will stop." When it stops, it may be unpleasant. Other than Herb Stein's quote, I have no comment. But the things that trouble you are troubling me.

To combat depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection -- a procedure which can only lead to a much more severe crisis as soon as the credit expansion comes to an end.

Negative effects on the economy were covered up with a flood of liquidity from the Fed. That,plus lax regulation, led to a housing bubble, a consumption boom - but we were living on borrowed money. It was inevitable that there would be a day of reckoning, and it has now come. We will be paying the costs "with interest".

The current Eurozone is obviously dysfunctional. And serious people within Germany and elsewhere know this to be the case and know things cannot function this way forever.

Since the eighteenth century the immense expansion of the worlds wealth has come about as a result of a correspondingly immense expansion of credit, which in turn has demanded increasingly stupendous suspensions of disbelief.

If you increase the quantity of money, you bring about the lowering of the purchasing power of the monetary unit.

Whether a bank lent one million, ten million, or a hundred millions, they would not permanently alter the market rate of interest; they would alter only the value of the money they issued.

It's the deleveraging that's going on right now that has caused the credit crisis.

Mr. Greenspan did a very good job in the early 1990's. But recently he's fallen prey to this crazy theory that prosperity causes inflation. So they're trying to slow the economy down by raising interest rates. It's like a doctor saying you're in great health, so we have to make you sick a little bit. It's a bizarre theory. It's going to hurt our economy.

What is needed for a sound expansion of production is additional capital goods, not money or fiduciary media. The credit expansion is built on the sands of banknotes and deposits. It must collapse.

The time will come, and probably during 2009, that the only way the U.S. will be able to fund its deficits is to create money by printing it. The Treasury will have to sell bonds, and, in the absence of foreign buyers, the Fed will have to print the money to buy them. The consequence will be runaway inflation, increasing interest rates, recession, and inevitable tax increases on all Americans.

The Great Depression in the United States was caused - I won't say caused, was enormously intensified and made far worse than it would have been by bad monetary policy.

The Robert Mugabe school of economics provides a salutary warning about uncontrolled monetary expansion in generating hyper-inflation. The road to Harare is not as long as we might hope.

One thing is certain. At some point global investors will lose confidence in our (U.S.) easy dollars and debt-financed prosperity, and then the chickens will come home to roost.

When money is free, the rational lender will keep on lending until there is no one else to lend to.