Extremes Become More Extreme, Then Revert to the Mean
A fatal bout of runaway instability becomes inevitable when “extraordinary emergency measures” become permanently essential to keep the bubbles from popping.
A funny thing happens as policies intended to fill financial potholes transition from “temporary emergency measures” to “we need to keep doing this to stabilize the status quo”: extremes get more extreme as what were once viewed as extraordinary policy measures required to keep the rickety system from collapsing become the “New Normal.”
Of course the Federal Reserve continues suppressing interest and mortgage rates even after the financial crisis has passed, because if they stopped, the system would revert to crisis and collapse.
I’ve assembled a few charts of extremes becoming more extreme as a consequence of “emergency policies” becoming not just normalized but the keystone of the entire economy. What were desperat
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LewRockwell.com is a libertarian website that publishes articles, essays, and blog posts advocating for minimal government, free markets, and individual liberty. The site was founded by Lew Rockwell, an American libertarian political commentator, activist, and former congressional staffer. The website often features content that is critical of mainstream politics, state intervention, and foreign policy, among other topics. It is a platform frequently used to disseminate Austrian economics, a school of economic thought that is popular among some libertarians.
