The Coming Economic Collapse
The Delusion of Real Wealth
When business in the United States underwent a mild contraction
. . . the Federal Reserve created more paper reserves in the hope of
forestalling any possible bank reserve shortage. The “Fed” succeeded;
. . . but it nearly destroyed the economies of the world, in
the process. The excess credit which the Fed pumped into the
economy spilled over into the stock market—triggering a fantastic
speculative boom. Belatedly, Federal Reserve officials attempted
to sop up the excess reserves and finally succeeded in
breaking the boom. But it was too late: . . . the speculative imbalances
had become so overwhelming that the attempt precipitated
a sharp retrenching and a consequent demoralizing of business
confidence. As a result, the American economy collapsed.
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