No individual or group of individuals can suffer as a result of an “unfavorable” trade account balance. But suffering can emerge from a drop in the incomes of individuals because of government tampering with the economy.
Extract of Ludwig von Mises’ ‘Human Action’
It is not money that funds economic activity, but the saved pool of consumer goods. The existence of money only facilitates the flow of savings. Any attempt to replace savings with money ends in economic disaster.
This is the diametric opposite of the qualitative-easing campaign that central banks are continuing to tinker with, at our peril.
In Venezuela, the stock market goes up because the currency devalues. The same is true worldwide.
Authored by Daniel Lacalle via The Mises Institute, Negative rates are the destruction of money, an economic aberration based on the mistakes of many central banks and some of their economists, who start with a wrong diagnosis: the idea that economic agents do not take more credit or invest more because they choose to save […]