This is a bit of a nit, but again today I have seen an error in the application of Austrian Business Cycle Theory (ABCT) that needs correcting.
In this post over at the mises.org blog today, Joseph Salerno makes a quick reference to the fact that the issuance of fiduciary media would generate a business cycle. I'm not picking on Mr. Salerno here other than the fact that the topic was on my mind and this made a good reference point to link to.
What I will strive to demonstrate is that while the ABCT correctly identifies the causes of business cycle, it cannot be postulated that the phenomenon underlying business cycles either necessarily or probabilistically WILL in fact cause future business cycles. If future business cycles in fact occur, we will still certainly know the causes through ABCT analysis, but that same analysis carries a highly imperfect predictive capacity.
What's the point? Everyone using ABCT analysis to try to identify "the next bubble" may well be wrong if no bubble materializes, and it may marginalize ABCT theory or Austrian, Free-market theory more generally if the predictions don't come true.
Here's my prediction: There will be no new bubble, and there won't be a boom before there is a new bust. The upcoming article will dive into this prediction and talk about the possibility of non-cyclical or at least non-typical booms and busts.
Look forward to the post - especially definitions, ie, what ever do you mean there is not price inflation:
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I certainly wouldn't argue that there isn't price inflation, in fact i think it's rampant. BTW, have you ever checked out Shadowstats?
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Very interesting stuff. At any rate, I only mean to argue that there is no apparent "boom" or asset bubble indicative of a "boom" going on. We're not going to see one either -- it's just going to be general inflation (wherever it ends up) coupled with a nosedive/swandive (whichever pace you prefer).