Tag Archives: inflation

See’s Candies, Sanborn Map, and Inflation Article

SeesA Nor’easter is coming my way (up to two to three feet of snow with high winds) so I may be out of contact for two or three days.  But push on we must. We continue to study Chapter 3, in Deep Value and Buffett’s investing career.Sees 2

The best investment article I have ever read of Buffett’s is:

Buffett & Inflation Highlighted plus if you wish to read all that Buffett has said about inflation then Buffett inflation file.

A key case for you to focus on is See’s_Candies_Case_Study. Combined with Buffett’s Inflation Swindles the Equity Investor (Fortune Article: Buffett – How Inflation Swindles the Equity Investor), you will see a leap in Buffett’s thinking. Both are important to understand and complementary to each other.

Finally, Sanborn_Map_Case_Study_BPLs is another case mentioned in Chapter 3 of Deep Value.

Hopefully, students will discuss in the comments section.

Time to bring out the snowshoes!

It’s not entirely clear what will happen in the near term, but the financial markets are already pushed to extremes by central-bank induced speculation. With speculators massively short the now steeply-depressed euro and yen, with equity margin debt still near record levels in a market valued at more than double its pre-bubble norms on historically reliable measures, and with several major European banks running at gross leverage ratios comparable to those of Bear Stearns and Lehman before the 2008 crisis, we’re seeing an abundance of what we call “leveraged mismatches” - a preponderance one-way bets, using borrowed money, that permeates the entire financial system. With market internals and credit spreads behaving badly, while Treasury yields, oil and industrial commodity prices slide in a manner consistent with abrupt weakening in global economic activity, we can hardly bear to watch..   John Hussman, Jan. 26, 2015   www.hussmanfunds.com

Compare and Contrast




The above represents my understanding of INFLATION, not prices rising. Prices may or not rise depending upon supply/demand for goods and currency. Usually, as the supply of currency increases much faster than the production of goods and services, then prices rise or the value of the currency declines.



Thanks to www.acting-man.com and www.zerohedge.com

Value Investing During Worldwide QE


The Risks of investing during times of deflation/inflation: inflation-june-2014

Interesting…………..Massive short position built up by managed money in silver.

Shorts in silver



Play It Again Sam (How the Fed Manipulates Credit)

The above video gives you a short analysis of the causes of the financial crisis from a businessman’s perspective.

Books on the Federal Reserve and Banking

The books below will make you an expert on how the FED and the banking system work to create fiat, irredeemable money and credit out of “thin air” or by key-stroke.

After reading those books, can YOU tell me how the central bankers EXIT strategy will work?  Watch Japan for a preview.

Here is Jim Grant

Inflation is a state of affairs in which there is too much money. It’s not too much money chasing too few goods. It’s too much money, the thing that this money chases is variable. And in this particular cycle and for some time, it has chased commercial real estate, bonds, stocks, financial assets of all kinds. Iowa farm land. There is a huge excess of liquidity in the world. Central banks furnish this, they stuff us with it. In the interest of levitating markets that will, they think

On the Equity rally:

Yes there are terrific companies generating terrific cash flows. That is certainly true. But beneath the surface of things or not so far beneath the surface of things, as far as central banks, practicing not original policies but original sin. This is these policies are not so original. They go back to the time of Revolutionary France. You know the idea of creating currency with which to create human happiness is as old as the hills.

On Gold:

Gold has been in a bull market for 12 years. Gold is this rare thing in which you can be bullish and yet contrary and also with the trend. There is I think a general fatigue animus towards gold. The gold prices are reciprocal of the world’s view of the competence of central banks. The greater the world’s confidence in the Ben Bernanke’s of the world, the weaker the gold market. The less the world holds confidence in the institution of managed currencies, the stronger the gold market. And to me the confidence is utterly misplaced,

See videos:


The Horror!http://www.federalreserve.gov/monetarypolicy/fomcminutes20121212.htm

Next post on Wed………..Have a Great Weekend!

The Banana Dow


Yeah, another RECORD high in the Dow. Can you hear the cheers? But what can the Dow buy you in Bananas vs. the past? What is the real Dow in Bananas1


Based on the wholesale price of bananas, the Dow currently buys you a whopping 15.35 tons of the tropical fruit. But this is exactly the same amount of bananas the Dow would buy back in February 2008, when the Dow was just 12,266. And it’s a massive 60% drop from June 1999 when the Dow bought 38.51 tons of bananas.  While investors are cheering the new nominal high in the Dow or S&P 500, they fail to grasp what is happening to their purchasing power. Buffett always said THE goal of an investor is to maintain his or her purchasing power. At the end of your investing period will the dollars obtained after selling your investment bring you the same amount of “bananas” as your dollars would have obtained at the beginning of your investment period.

Bear Market Dow in Gasoline


Read more: http://www.sovereignman.com/finance/reality-check-the-dow-jones-industrial-average-vs-bananas-11112/

All investors should understand the effects of inflation on their equity investments. Read, memorize, and sleep with the following:

Buffett & Inflation Highlighted and Buffett inflation file and for beginners: Buffett Inflation depreciation and capex

Buffett Lecturing on Inflation

Don’t believe the lies:


CPI Year-to-Year Growth

The CPI-U (consumer price index) is the broadest measure of consumer price inflation for goods and services published by the U.S. Government’s Bureau of Labor Statistics (BLS).

While the headline number usually is the seasonally-adjusted month-to-month change, the formal CPI is reported on a not-seasonally-adjusted basis, with annual inflation measured in terms of year-to-year percent change in the price index.

The chart below shows the Shadow Government Stats -Alternate CPI estimate. It figures inflation based on our own government’s official methodology for computing the CPI-U in the years through 1980.

Under the old rules US inflation has been in the double-digits for much of the preceding five years. The ‘new’ BLS numbers want you to believe price increases since 2008 have been quite mild.

The Bureau of Labor Statistics also uses a technique called ‘substitution’ to hold down their reported inflation figures. If an item in their index goes up in price they can assume consumer would simply trade down to something cheaper instead.

If your favorite rib-eye steak went from $7.99 to $12.99 per pound you’d simply eat hamburger instead. Have those organic bananas gotten too expensive. Try prunes. Need a replacement for your Lexus? Buy a Kia instead. Presto, there’s no inflation evident in any of those situations according to the BLS.

All these changes in the way CPI is calculated have been duly disclosed to the public. That doesn’t make them any less dishonest when viewed the way most people gauge changes in their real cost of living.  See http://www.beatingbuffett.com/?tag=inflation

http://www.beatingbuffett.com/?p=4436   Individual investors making poor decisions.

http://marketshadows.com/2012/12/31/covered-calls-the-hidden-risk-for-2013-and-beyond/ The danger of selling covered calls now.

More discussion about Buffett and inflation here: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/buffett-on-inflation-and-stocks-%28part-1%29/40/

You’re warned! Now plan.

How Could Ackman be So Wrong? Where’s the Inflation?


We continue our study of Herbalife’s saga with a recent post from www.brontecapital.com. There are lessons here on conducting research and on hubris.

What this story is really about

Herbalife is a company which combines a lot of good (think the life-saved diabetic above) with some pretty ugly features.

But this is not really a story about Herbalife – Herbalife will survive globally. Like all multi-level marketing schemes it will have its ups and downs. There will be all sorts of problems (such as tax compliance throughout the scheme, cash handling, perhaps even using Herbalife accounts to launder money).

What this has (deservedly) become is the story about how Bill Ackman can be so wrong. He spent (by his own admission) a year and a half analysing this company and his thesis can be falsified by visiting a few clubs in his home city. Bill Ackman’s thesis is the most easily falsified bear-thesis I have seen from a major hedge fund ever.

You have to wonder how this happened. So I am going to tell you: 

Bill Ackman a Harvard educated (magna cum laude) billionaire New York hedge fund manager bet over a billion dollars on a short position (imperilling his fund and his reputation) without checking the facts.

And he did not check the facts because he was so rigid with a misplaced silver spoon that he could not stoop to sit on a subway for thirty minutes and talk with poor people for ninety minutes.

Read the entire article–an important read



Expectations of Low Future Growth?

Market Review LMCM See Future Value (See page 5).  Perhaps the market is discounting real growth vs. nominal growth?  Don’t take that chart at face value.

Where is the Inflation (CPI) ?  Another lesson in why price aggregates are so misleading.

Critics of the Austrian School of economics have been throwing barbs at Austrians like Robert Murphy because there is very little inflation in the economy. Of course, these critics are speaking about the mainstream concept of the price level as measured by the Consumer Price Index (i.e., CPI).



High prices seem to be the norm. The US stock and bond markets are at, or near, all-time highs. Agricultural land in the US is at all time highs. The Contemporary Art market in New York is booming with record sales and high prices. The real estate markets in Manhattan and Washington, DC, are both at all-time highs as the Austrians would predict. That is, after all, where the money is being created, and the place where much of it is injected into the economy.

This doesn’t even consider what prices would be like if the Fed and world central banks had not acted as they did. Housing prices would be lower, commodity prices would be lower, CPI and PPI would be running negative. Low-income families would have seen a surge in their standard of living. Savers would get a decent return on their savings.

Of course, the stock market and the bond market would also see significantly lower prices. Bank stocks would collapse and the bad banks would close. Finance, hedge funds, and investment banks would have collapsed. Manhattan real estate would be in the tank. The market for fund managers, hedge fund operators, and bankers would evaporate.

In other words, what the Fed chose to do ended up making the rich, richer and the poor, poorer. If they had not embarked on the most extreme and unorthodox monetary policy in memory, the poor would have experienced a relative rise in their standard of living and the rich would have experienced a collective decrease in their standard of living.



Buffett Tutorial on Accounting and Valuation: See’s Candies Case Study

I have always maintained that excepting fools, men did not differ much in intellect, only in zeal and hard work.  –Charles Darwin

Value investing works, because it does NOT work ALL the time. –Joel Greenblatt

Today’s post focuses on accounting (GAAP) and valuation through the words of Warren Buffett. The case study on See’s Candies and the other readings will help improve your skills. The burden is on you to understand and apply the lessons. If you do not understand FIFO or deferred taxes, then look up those terms in a basic accounting book, then do problem sets to grasp the concepts. Don’t take Buffett’s words on faith; try to apply the concepts of economic Goodwill to a commodity based company like, for example, US Steel (X) versus a franchise company like Coca-Cola (KO). Do you agree with Buffett’s analysis?

Prof. Joel Greenblatt’s book, The Little Book that Beats the Market, is (simply) an application of Buffett’s thoughts on economic Goodwill.

Helpful hint: Take a subject like share repurchases or divdend policy and try to find many different sources on the subject. Learn the subject to death. Master how, when or if a company should act in returning capital to shareholders.

See’s Candies Case Study:Sees Candies 2012


A Parable on Valuation: The Old Man and the Tree or a Parable of Valuation

Inflation:Inflation Swindles the Equity Investor and Buffett inflation file

EBITDA: Placing EBITDA into Perspective and TEV to EBITDA Research

Joel Greenblatt: Little Book That Still Beats the Market, The – Joel Greenblatt

Secrets of (view): http://youtu.be/3PShSES5nBc   25 minutes

Corporate Finance

Share Repurchases: Corporate Structure and Stock Repurchases and Assessing Buybacks from all Angles_Mauboussin

Dividends: Dividend Policy, Strategy and Analysis

You will beat Wall Street easily if you apply the above lessons. The hard work is in mastering the material.   Stay the course.


I don’t understand it. Jack will spend any amount of money to buy votes but he balks at investing a thousand dollars in a beautiful painting.–Jackie Kennedy

Articles on Current Inflation

Bailing out banks is inflationary: http://mises.org/daily/5890/Bailing-Out-Banks-Is-Inflationary

How we can transition to honest money: http://mises.org/daily/5926/The-Transition-to-Monetary-Freedom

Current prices for pancakes around the world: http://www.economicpolicyjournal.com/2012/02/cost-of-making-pancakes-around-world.html

Opposing view: Diapers and Deflation (What is Krugman Smoking?) http://krugman.blogs.nytimes.com/2012/02/06/diapers-and-deflation/

The next worry from the Fed: http://blog.haysadvisory.com/


Buffett on Inflation or Why Stocks Beat Gold and Bonds

Investing is often described as the process of laying out money now in the expectation of receiving more money in the future. At Berkshire Hathaway (BRKA) we take a more demanding approach, defining investing as the transfer to others of purchasing power now with the reasoned expectation of receiving more purchasing power — after taxes have been paid on nominal gains — in the future. More succinctly, investing is forgoing consumption now in order to have the ability to consume more at a later date. –Warren Buffett

Warren Buffett: Why stocks beat gold and bonds

In an adaptation from his upcoming shareholder letter, the Oracle of Omaha explains why equities almost always beat the alternatives over time.


Obviously, the readers of this blog are aware of the Federal Reserves easy monetary policy–growing monetary aggregates, zero interest rate policy, and high reserves in the banking system. However, as followers of Austrian economics (some of us), we realize that there is no perfect correlation between X growth in money supply and Y increase in nominal stock prices. The world is an extremely complex place and to model precision and prediction is MADNESS. However, you can gain a sense of how the wind blows. If people wish to hold lower cash balances then the effects of inflation will be increased.

Learn more here about monetary policy: www.economicpolicyjournal.com and www.mises.org and http://scottgrannis.blogspot.com/

Inflation Swindles the Equity Investor


I strongly urge you to read one of the greatest articles on investing by Buffett, How Inflation Swindles the Equity Investor. HERE: http://www.scribd.com/doc/65198264/Inflation-Swindles-the-Equity-Investor

We spoke at length about investing and inflation during this post: http://wp.me/p1PgpH-1h

Inflation and the Stock Market; Alice in Wonderland and the Federal Reserve; Recommended Blogs

Alice in Wonderland

“Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else — if you ran very fast for a long time, as we’ve been doing.”

“A slow sort of country!” said the Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
(Through the Looking Glass, Chapter 2)

Inflation and the Stock Market

It appears to me of preeminent importance to our science that we should become clear about the causal connections between goods. –Carl Menger, Principles of Economics.

A Reader asked about why I should be bullish about stocks with inflationary dangers like rising money supply numbers present and the Fed’s zero (0%) interest rate policy.

My reply is that I would rather own franchises that can pass along their costs (inflation pass-through) than just a basket of stocks. In severe inflation the goal is to lose less in real terms than holding other assets like bonds. We all lose as a society with rampant inflation, especially the poor and those on fixed incomes.  Also, in general, the context in which stocks rise is important.  See below.

The Stock Market and Inflationary Depression (page 938 in Capitalism by George Reisman—in VALUE VAULT).

The fact that inflation undermines capital formation has important implication for the performance of the stock market. In its initial phase or when it undergoes a sufficient and relatively unanticipated acceleration, inflation in the form of credit expansion can create a stock-market boom (Now in January 2012 we are seeing a NOMINAL boom not a REAL boom in stock prices). However, its longer-run effects are very different. The demand for common stocks depends on the availability of savings. In causing savings to fail to keep pace with the growth in the demand for consumer’s goods, inflation tends to prevent stock prices, as well as wage rates, from keeping pace with the rise in the prices of consumers’ goods. For a further explanation of this phenomenon go to Man, Economy and State by Murray Rothbard to read about the structure of production: pages 319 to 508 in the VALUE VAULT.  Also, The Structure of Production by Mark Skousen

The same consequence results from the fact that inflation also leads to funds being more urgently required internally by firms—to compensate for all the ways in which it causes replacement funds to become inadequate. At some point in an inflation, business firms that are normally suppliers of funds to the credit markets—in the form of time deposits, the purchase of commercial paper, the extension of receivables credit, and the like—are forced to retrench and, indeed, even to become demanders of loanable funds, in order to meet the needs of their own, internal operations. The effect of this is to reduce the availability of funds with which stocks can be purchased, and thus to cause stock prices to fall, or at least to lag all the more behind the prices of consumers’ goods.

When this situation exists in a pronounced form, it constitutes what has come to be called an “inflationary depression.” This is a state of affairs characterized by a still rapidly expanding quantity of money and rising prices and, at the same time, by an acute scarcity of capital funds. The scarcity of capital funds is manifested not only in badly lagging, or actually declining, securities markets but also in a so-called credit crunch i.e., a situation in which loanable funds become difficult or impossible to obtain. The result is wide-spread insolvencies and bankruptcies.


As a review and emphasis, read Buffett’s take on inflation and stocks: http://www.scribd.com/doc/65198264/Inflation-Swindles-the-Equity-Investor

Let’s take a step back from what you just read. If you know that money functions as a medium of exchange, then you realize in a modern society that money helps support the specialization of production and hence improves productivity. However, inflation—like dollar bills dropped into the jungle—does not per se increase savings and capital goods (stocks are titles to capital goods). Inflation, if unanticipated, artificially boosts stock prices and then eventually causes a decline because of the limited availability of real capital (bricks, trucks, machines) to reinvest (maintenance capital expenditures) into businesses AND, at the same time, consume consumer goods. In a finite world, you have to choose between mending your fishing nets or fishing to eat; you can’t do both unless you have a cache of fish saved.  Perhaps in the delusional world of a Federal Reserve bureacrat you can have your fish and eat it too–just print more.

Do not blindly believe inflation is “good” for stocks.

Other Views on Inflation and Stocks



Alice in Wonderland and the Federal Reserve


“The Federal Reserve, declaring that the economy would need help for years to come, said Wednesday it would extend by 18 months the period that it plans to hold down interest rates in an effort to spur growth.” (New York Times)

Illogic 101: Artificially low interest rates helped produce the crisis. Therefore the Fed will fix the economy by holding down interest rates for the foreseeable future.  (Give the drunk more booze to cure the hangover!)

The article below will help clarify the points made at the beginning of this post.

Interest Rates and the business cycle: http://www.thefreemanonline.org/columns/interest-rates-and-the-business-cycle/

by Glen Tenney • November 1994 • Vol. 44/Issue 11

The cause of the business cycle has long been debated by professional economists. Recurring successions of boom and bust have also mystified the lay person. Many questions persist. Are recessions caused by under consumption as the Keynesians would have us believe? If so, what causes masses of people to quit spending all at the same time? Or are recessions caused by too little money in the economy, as the monetarists teach? And how do we know how much money is too much or too little? Perhaps more importantly, are periodic recessions an inevitable consequence of a capitalist economy? Must we accept the horrors associated with recessions and depressions as a necessary part of living in a highly industrialized society?


New Money Gives a False Signal

Money is primarily a medium of exchange in the economy; and as such, its quantity does not have anything to do with the real quantity of employment and output in the economy. Of course, with more money in the economy, the prices of goods, services, and wages, will be higher; but the real quantities of the goods and services, and the real value of the wages will not necessarily change with an increase of money in the overall economy. But it is a mistake to think that a sudden increase in the supply of money would have no effect at all on economic activity. As Nobel Laureate Friedrich A. Hayek explained:

Everything depends on the point where the additional money is injected into circulation (or where the money is withdrawn from circulation), and the effects may be quite opposite according as the additional money comes first into the hands of traders and manufacturers or directly into the hands of salaried people employed by the state.2 [2]

Because the new money enters the market in a manner which is less than exactly proportional to existing money holdings and consumption/savings ratios, a monetary expansion in the economy does not affect all sectors of the economy at the same time or to the same degree. If the new money enters the market through the banking system or through the credit markets, interest rates will decline below the level that coordinates with the savings of individuals in the economy. Businessmen, who use the interest rate in determining the profitability of various investments, will anxiously take advantage of the lower interest rate by increasing investments in projects that were perceived as unprofitable using higher rates of interest.

The great Austrian economist Ludwig von Mises describes the increase in business activity as follows:

The lowering of the rate of interest stimulates economic activity. Projects which would not have been thought “profitable” if the rate of interest had not been influenced by the manipulation of the banks, and which, therefore, would not have been undertaken, are nevertheless found “profitable” and can be initiated.3 [3]

The word “profitable” was undoubtedly put in quotes by Mises because it is a mistake to think that government actions can actually increase overall profitability in the economy in such a manner. The folly of this situation is apparent when we realize that the lower interest rate was not the result of increased savings in the economy. The lower interest rate was a false signal. The consumption/ saving ratios of individuals and families in the economy have not necessarily changed, and so the total mount of total savings available for investment purposes has not necessarily increased, although it appears to businessmen that they have. Because the lower interest rate is a false indicator of more available capital, investments will be made in projects that are doomed to failure as the new money works its way through the economy.

Eventually, prices in general will rise in response to the new money. Firms that made investments in capital projects by relying on the bad information provided by the artificially low interest rate will find that they cannot complete their projects because of a lack of capital. As Murray Rothbard states:

The banks’ credit expansion had tampered with that indispensable “signal”-the interest rate—that tells businessmen how much savings are available and what length of projects will be profitable . . . . The situation is analogous to that of a contractor misled into believing that he has more building material than he really has and then awakening to find that he has used up all his material on a capacious foundation, with no material left to complete the house. Clearly, bank credit expansion cannot increase capital investment by one iota. Investment can still come only from savings.4 [4]

Capital-intensive industries are hurt the most under such a scenario, because small changes in interest rates make a big difference in profitability calculations due to the extended time element involved.

It is important to note that it is neither the amount of money in the economy, nor the general price level in the economy, that causes the problem. Professor Richard Ebeling describes the real problem as follows:

Now in fact, the relevant decisions market participants must make pertain not to changes in the “price level” but, instead, relate to the various relative prices that enter into production and consumption choices. But monetary increases have their peculiar effects precisely because they do not affect all prices simultaneously and proportionally.5 [5]

The fact that it takes time for the increase in the money supply to affect the various sectors of the economy causes the malinvestments which result in what is known as the business cycle.

Government Externalizes Uncertainty

Professor Roger Garrison has noted another way that government policy causes distortions in the economy by falsifying the interest rate.6 [6] In a situation where excessive government spending creates budget deficits, uncertainty in the economy is increased due to the fact that it is impossible for market participants to know how the budget shortfall will be financed. The government can either issue more debt, create more money by monetizing the debt, or raise taxes in some manner. Each of these approaches will redistribute wealth in society in different ways, but there is no way to know in advance which of these methods will be chosen.

One would think that this kind of increase in uncertainty in the market would increase the risk premium built into loan rates. But these additional risks, in the form of either price inflation or increased taxation are borne by all members of society rather than by just the holders of government securities. Because both the government’s ability to monetize the debt and its ability to tax generate burdens to all market participants in general rather than government bond holders alone, the yields on government securities do not accurately reflect these additional risks. These risks are effectively passed on or externalized to those who are not a part of the borrowing/lending transactions in which the government deals. The FDIC, which guarantees deposit accounts at taxpayer expense, further exacerbates the situation by leading savers to believe their savings are risk-free.

For our purposes here, the key concept to realize is the important function of interest rates in this whole scenario. Interest rates serve as a regulator in the economy in the sense that the height of the rates helps businessmen determine the proper level of investment to undertake. Anything in the economy that tends to lower the interest rate artificially will promote investments in projects that are not really profitable based upon the amount of capital being provided by savers who are the ones that forgo consumption because they deem it in their best interest to do so. This wedge that is driven between the natural rate of interest and the market rate of interest as reflected in loan rates can be the result of increases in the supply of fiat money or increases in uncertainty in the market which is not accurately reflected in loan rates. The manipulation of the interest rate is significant in both cases, and an artificial boom and subsequent bust is inevitably the result.


Changes in the supply of money in the economy do have an effect on real economic activity. This effect works through the medium of interest rates in causing fluctuations in business activity. When fiat money is provided to the market in the form of credit expansion through the banking system, business firms erroneously view this as an increase in the supply of capital. Due to the decreased interest rate in the loan market brought about by the fictitious “increase” in capital, businesses increase their investments in long-range projects that appear profitable. In addition, other factors as well can cause a discrepancy between the natural rate of interest and the rate which is paid in the loan market. Government policies with regard to debt creation, monetization, bank deposit guarantees, and taxation, can effectively externalize the risk associated with running budget deficits, thus artificially lowering loan rates in the market.

Either of these two influences on interest rates, or a combination of the two, can and do influence economic activity by inducing businesses to make investments that would otherwise not be made. Since real savings in the economy, however, do not increase due to these interventionist measures, the production structure is weakened and the business boom must ultimately give way to a bust. []

  1. For a detailed discussion of the phenomenon of interest and the corresponding relationship to the business cycle, see Ludwig you Mises, Human Action, 3d rev. ed. (Chicago: Contemporary Books, 1966), chapters 19-20; Murray N. Rothbard, Man, Economy, and State (Los Angeles: Nash Publishing Corporation, 1970), chapter 6 in Value Vault; and Mark Skousen, The Structure of Production (New York: New York University Press, 1990), chapter 9.
  2. Friedrich A. Hayek, Prices and Production, 2d ed. (London: George Routledge, 1931; Repr. New York: Augustus M. Kelley, 1967), p. 11.
  3. Ludwig von Mises, The Austrian Theory of the Trade Cycle (Auburn, Ala,: The Ludwig von Mises Institute, 1983), pp. 2-3.
  4. Rothbard, Man, Economy, and State, p. 857.
  5. Richard Ebeling, preface to The Austrian Theory of the Trade Cycle by Ludwig von Mises, Gottfried Haberler, Murray N. Rothbard, and Friedrich A. Hayek (Auburn, Ala.: The Ludwig von Mises Institute, 1983).
  6. Roger W. Garrison, “The Roaring 20s and the Bullish 80s: The Role of Government in Boom and Bust,” Critical Review 7, no. 2-3 (Spring-Summer 1993), pp. 259-276.

Recommended Blogs

Here is an investor who has the guts to put his work in the public domain. This is one way to track your thinking and investment progress.


For those who want to dig deeper, here are notes on Competition Demystified from an “Austrian” Value Investor.