In this article, Steve Hanke wrote the federal is a serial bubble blower, unlike Chairman Bernanke’s claim. Hanke said the easiest way to consider the Fed-generated demand bubbles is to measure the trend of growth in nominal final sales to the US purchasers, then examine the deviations from that trend.

Out of the question that came out because of Chairman Bernanke’s denial of the Fed’s culpability, Hanke cites an interesting quote written by Prof. Gordon Tullock in Capitalism and Freedom: Problems and Prospects, which emphasizes the government played a huge part in the information that available on most government issues. In conclusion, the information flows are dominated by the Fed’s capacity to write and re-write history.

Hanke mentioned the 18-year real estate cycle that goes hand-in-hand with Austrian business cycle theory is the one thing that the purveyors of monetary policy should become well-versed in. Data shows that every 18 years, we can expect the culmination of a credit-fueled real estate and ensuing business cycle. It is said that real estate cycles have spawned economic downturns. Phil’s book The Secret Life of Real Estate and Banking is one of the recommendations from Hanke for a full treatment of the 18-year real estate cycle.

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