Every boom plants the seeds of its own bust. Recessions, contrary to popular belief, are the cure, not the disease. They’re the phase where economic errors are rectified. The real problem? The boom itself – it’s fun but deceptive, an illusion fueled by false prosperity.
Many mistakenly view these cycles as inherent to capitalism, but that’s a fallacy. It’s government meddling, especially with interest rates, that triggers these booms and busts. Remove government interference and embrace sound money and true free markets, and you’ll see a dramatic reduction in these cycles.
A simple analogy from my dad, which I shared in my book
#CrashProof: Imagine a circus boosting a small-town restaurant’s business, leading to misguided expansion. Once the circus leaves, the restaurant faces a harsh reality check.
Similarly, the Fed’s artificially low interest rates distort the market, encouraging unsustainable decisions. When the rates inevitably rise, the economy faces the music. The free mar...