No, this will be recipe for hyperinflation - Reader comments at The New York Sun

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Could America Become the Next Japan?

Submitted by Contrarian Investors' Journal, Feb 10, 2008 07:12

No, you cannot 'prevent' a recession by printing money to 'stimulate' demand. All it will happen is hyperinflation! We have a more detailed discussion our article at Recipe for hyperinflation.

In In Chapter 15, Section 2 of Human Action: A Treatise on Economics, Ludwig Von Mises wrote:

The economists were and are still today confronted with the superstitious belief that the scarcity of factors of production could be brushed away, either entirely or at least to some extent, by increasing the amount of money in circulation and by credit expansion.

A recession is a natural and inevitable correction of the prior excess and mal-investments, which will then put us back into a sustainable growth path. If we interfere with that process, we are setting ourselves for more series crisis in the future e.g. stagflation!

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Other reader comments on this article

Comment	By	Date
No, you cannot 'prevent' a recession by printing money to 'stimulate' demand. All it will happen is hyperinflation! We have...	Contrarian Investors' Journal	Feb 10, 2008 07:12