The one (deflationary depression) doesn‘t excludebthe other (inflationary crack up), in fact they are both different sides of the same coin. Mises (and Rothbard) both point to the difficulty in knowing whether the deflationary depression will be preceded by an (hyper) inflationary spike in asset prices and wages or not. In the end it doesn‘t matter: the resulting liquidation of unsustainable debt levels and the wholesale destruction of demand will result in a depression. The only real question is whether it will be allowed to sort itself out quickly (1921) or be so chronically interfered with by the same people who caused it in the first place that it takes a decade or two to play out.
Your comment is well-timed. After I published this article I shut my laptop, went to my porch and started listening to your interview with Paul and Tim. I'm extremely interested in the cycle theory, and already have a draft of an article that I'm planning to write about it. I'm very excited to read Akhil's book when it comes out.
My take is that Alex Gurevich might be right in the short term, 2023/24, but the central bank and fiscal response could be massive and cause that crack up boom in 25/26. At which point, run for the exits. As Tom Luongo might suggest, buy gold goats and guns.
Everything in our current society suggests *it will not* be allowed to sort itself out, and government interference will prolong it as long as possible. At least, that is how I view the situation.
The one (deflationary depression) doesn‘t excludebthe other (inflationary crack up), in fact they are both different sides of the same coin. Mises (and Rothbard) both point to the difficulty in knowing whether the deflationary depression will be preceded by an (hyper) inflationary spike in asset prices and wages or not. In the end it doesn‘t matter: the resulting liquidation of unsustainable debt levels and the wholesale destruction of demand will result in a depression. The only real question is whether it will be allowed to sort itself out quickly (1921) or be so chronically interfered with by the same people who caused it in the first place that it takes a decade or two to play out.
Your comment is well-timed. After I published this article I shut my laptop, went to my porch and started listening to your interview with Paul and Tim. I'm extremely interested in the cycle theory, and already have a draft of an article that I'm planning to write about it. I'm very excited to read Akhil's book when it comes out.
My take is that Alex Gurevich might be right in the short term, 2023/24, but the central bank and fiscal response could be massive and cause that crack up boom in 25/26. At which point, run for the exits. As Tom Luongo might suggest, buy gold goats and guns.
Everything in our current society suggests *it will not* be allowed to sort itself out, and government interference will prolong it as long as possible. At least, that is how I view the situation.
A Bloomberg commodity writer and analyst is saying gold could be $7000/oz by 2025.
Who knows, maybe? But truth be told, even though I own gold, I don't want to live in a world where gold is $7k an oz by next year.