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• Thursday, May 8, 2008 09:54 AM

  Bucky, it isn't just monetary policy

  You say that "The great depression was caused by the central bank along with the monetary policies of the central government," but I took pains to state that in my view this is a red herring, and that cycles of boom and bust would occur even if there was no fiat money at all, but only gold, silver, and copper, exchanging at their naturally-arrived-at market values. I said that this was because of the inherent instability of the mechanism within the investment market that allocates a proportion of production to producer goods, which will be used to produce the next cycle of consumer goods, and I cited Keynes as confirming this view. I also mentioned that the theory that monetary policy is the cause of cyclical instabilities in capitalism is one of the foundations of political anti-Semitism.

  On a lighter note, I spent the last hour trying to corroborate a story I found on Hezbollah's english-language website, according to which a dissident Israeli professor had just exposed a narrowly aborted Mossad plot to blow Lebanese General Michel Aoun's head off, using a booby-trapped camera, Ahmed Shah Massoud style. It turned out to be an utter fabrication, so it appeared on my blog for about an hour and then I removed it, feeling a bit silly. I suppose this is what comes of reading Kansas O'Flaherty comics.

  —Rowan Berkeley Read Rowan Berkeley's other letters
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