Abandoned Mall - Photo by Justin Cozart

The ultimate evil of monetary central planning is that it drastically distorts pricing signals in capital markets, thereby inducing vast malinvestments in the real economy—-mistakes that eventually result in uneconomic returns and losses which must be someday written off. Accordingly, what is recorded as a boost to GDP by our Keynesian policy overlords in the front-end of the malinvesment cycle results in a reduction of national wealth when it’s all said and done.

Needless to say, if central bank induced financial repression is carried on long enough the level of capital market deformation and main street malinvestment can become monumental. In fact, there are four bell-ringer statistics among the macro-economic data that dramatize perhaps the greatest of these central bank induced investment errors, but they are never published in the main street financial press—–probably because they explain far too much in one glance.

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