“Once again, monetary inflation is being confused with high-end entrepreneurialism. Ludwig von Mises, the great Austrian economist, was not fooled about the wealth effect of modern finance and, indeed, with his colleague FA Hayek dealt a devastating blow to the ever-reoccurring idea that ‘this time it’s different.’ It’s not different. Never. It just depends on where you are in the business cycle. Like a bad penny, this dream often recurs when the Fed has dumped enough money into the economy. These funds slosh around in the recesses of commercial banks and financial firms and then gradually find their way into stock markets and thence into high-end real estate.”
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