The Inevitable Bust: Why Economic Booms Contain The Seeds Of Their Own Destruction

The recurring cycle of economic booms followed by inevitable busts has remained a puzzle for generations of observers.

Austrian business cycle theory provides a profound understanding of how artificially inflated booms sow the seeds of their own destruction.

Inflationary booms inevitably sow the seeds of their own destruction and systemic collapse.

First, it reveals how inflationary booms plant the seeds of future busts by massively distorting investment incentives and price signals economy-wide.

Second, the theory demonstrates that the subsequent bust is unavoidable and results directly from the distortions, malinvestment, and overconsumption inherent in the preceding boom.

Artificially stimulated booms only set the stage for even harsher busts when the unavoidable correction finally culminates.

Understanding the seeds of collapse inherently embedded in inflationary booms provides urgent insight into our precarious economic trajectory. 

https://mises.org/wire/inevitable-bust-why-economic-booms-contain-seeds-their-own-destruction