Globalism again

Later on it was time to hear Dan Atkinson of the Mail on Sunday and Larry Elliott of the Guardian. This was a much better event. I'd thought that we would be treated to a right-left battle but they'd actually written a book together. Both seemed to agree on the pattern of the financial crisis. Elliott described the five stages of a boom and bust cycle with stage one being the economic expansion.

During questions I suggested that there was an earlier stage zero and that that was the critical one. I meant of course the creation of the fresh fiat money that drives the artificial boom and is the ultimate cause of the inevitable bust. Both authors agreed, and Elliott told the audience that there were only three consistent explanations for the crisis: the Green one, the Marxist one and the Austrian one. It wasn't entirely clear that the man from the Guardian wasn't a closet Austrian...

Chairman Iain Macwhirter of the Herald and the Rector of Edinburgh University said to me that the abolition of well-established fractional reserve banking would lead to deflation. There wasn't time for me to explain quickly to a large audience that moderate deflation was a good thing but I did point out that FRB had led to numerous depressions and that only the Austrians had forecast the one that started in 1929. One never knows: the next Mises may have sitting in the audience!