>>The Austrian school of economics makes the case that central banking leads to "malinvestment."<<
No it doesn't. It makes the case that massive credit injections by central banks, or central bank imposed non-natural instant rates create clusters of errors by sending the wrong signals to individuals and businesses about how they should be acting (borrowing, saving, expanding production, etc.) and that these clusters of errors manifest as malinvestments in a false boom which inevitable turns into a bust when it becomes apparent that the actions were indeed not justified by marketplace fundamentals but rather by manipulated signaling devices.
The rest of your diatribe also resides on both a faulty notion of Austrian School economics and a misunderstanding of the market process, but it would take quite a while to debunk it all.
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Date: 30/3/12 13:03 (UTC)No it doesn't. It makes the case that massive credit injections by central banks, or central bank imposed non-natural instant rates create clusters of errors by sending the wrong signals to individuals and businesses about how they should be acting (borrowing, saving, expanding production, etc.) and that these clusters of errors manifest as malinvestments in a false boom which inevitable turns into a bust when it becomes apparent that the actions were indeed not justified by marketplace fundamentals but rather by manipulated signaling devices.
The rest of your diatribe also resides on both a faulty notion of Austrian School economics and a misunderstanding of the market process, but it would take quite a while to debunk it all.