America's Great Depression

Bank profits derive mainly from credit expansion, so they will tend to inflate credit as much as they can until they are checked.

Furthermore, in the nature of things, credit contraction is severely limited—it cannot progress beyond the extent of the preceding inflation.14 Credit expansion faces no such limit.

an unchanged consumer demand will generate a 200 percent decline in the demand for capital goods.

The “boom,” then, is actually a period of wasteful misinvestment. It is the time when errors are made, due to bank credit’s tampering with the free market. The “crisis” arrives when the consumers come to reestablish their desired proportions. The “depression” is actually the process by which the economy adjusts to the wastes and errors of the boom,

The “boom-bust” cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.

People try to forecast and anticipate changes as best they can, but such forecasting can never be reduced to an exact science.

Irregular fluctuations, in response to changing consumer tastes, resources, etc. will certainly occur, and sometimes there will be aggregate losses as a result. But the regular, systematic distortion that invariably ends in a cluster of business errors and depression—characteristic phenomena of the “business cycle”—can only flow from intervention o

The market, therefore, provides a training ground for the reward and expansion of successful, far-sighted entrepreneurs and the weeding out of inefficient businessmen.

What matters for business is not the general behavior of prices, but the price differentials between selling prices and costs (the “natural rate of interest”).