Thursday, January 31, 2008

The Fed Induced Bubble Burns

With the Federal Reserve created Housing Bubble coming to a predictably disasterous crash, is it any wonder we are seeing a rise in the arson rate?

I’m not surprised.

In fact, this perfectly demonstrates the destructionism that lies at the core of a socialized monetary system. Artificially low interest rates skew natural market signals, and produce malinvestment. Capital is misallocated in ways that does not reflect the actual demands of society, and instead of being put to use in socially creative ways, it is reduced and destroyed.

So the Fed tricks people with the lure of easy money into investing in resources they can’t afford, and when it all comes crashing around them, the appeal to just destroying the property becomes a convenient escape.

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