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Third Daily Bell Interview
The Daily Bell is pleased to present this exclusive interview with Antal Fekete.
Author: Prof. Antal E. Fekete
Daily Bell: Do you still believe there's no way out of this cycle but "extinction" and then barter?
Antal Fekete: It is not a cycle, it is a disaster brought upon us by the incompetence and ineptitude of our Keynesian and Friedmanite money doctors. It leads to permanent gold backwardation (read: headlong rush of gold into hiding) that will in the fullness of time convert our incomparable multilateral trading system into miserable barter, and our highly productive world economy into a subsistence economy.
Daily Bell: What would you do if you were head of the Fed?
Antal Fekete: When Mises was once asked what he would do if he were the President of the United States he said he would resign forthwith. I answer your question by saying that I would issue a strongly-worded statement that I don’t want my name to be associated with a wrong-headed, utterly corrupt and unconstitutional experiment with irredeemable currency, foisting it upon the rest of the world. It is dishonorable. It is immoral. It marks the darkest hour in the history of this nation. Then I would resign.
Daily Bell: What is Janet Yellen going to do when she becomes Fed head? Will there inevitably be another crash?
Antal Fekete: She is well-heeled to kick the can further down the road, as they say. This road leads to a series of crashes, the blowing and pricking of bubbles. We are already in a depression, masked by unlimited money creation which is pouring oil on the fire of deflation. If 50+ percent youth unemployment does not indicate depression, then I don’t know what depression is. Bond purchases by the Fed lead to halving interest rates and halving them again and again. This is tantamount to destruction of capital as we mentioned a moment ago. Lower interest rates mean higher bond prices, which measure the increase of the burden of debt, the proverbial straw that breaks the back of the camel.
Daily Bell: Are the central bankers managing to re-stimulate? We believe that they will cause another stock market boom and bust. Your thoughts?
Antal Fekete: Central bankers manage to stimulate prosperity and the economy into oblivion. Capital destroyed by the falling interest rate structure cannot be resurrected by an exercise in “exit strategies” or in “tapering”. Besides, easy money (quantitative or otherwise) is addictive. Once being hooked on it, the economy cannot be weaned off the drug. There is a threshold of abuse beyond which the economy is doomed.
Daily Bell: The current "recovery" will not be extensive no matter how high the market runs because a money-led expansion cannot affect the underlying distortions of the economy. Only a full-fledged purging can do that, letting bankrupt firms fold up, etc. Comment?
Antal Fekete: You have put it beautifully.
