Once public opinion is convinced that the increase in the…
“Once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities will not cease to rise, everybody becomes eager to buy as much as possible and restrict his cash holdings to minimum size... If the credit expansion is not stopped in time, the boom turns to crack-up boom: the flight into real values begins, and the whole monetary system founders.”
About This Quote
This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.
When people expect endless money growth, they hoard goods, causing a speculative boom that can collapse into a crash if credit keeps expanding.
In simple terms: Expecting endless money leads to hoarding and a risky boom.
Key Takeaway
Watch credit growth and avoid excessive speculation.
Themes
economics
inflation
speculation
monetary policy
Mood
cautious
analytical
Type
economic
warning
When to use this quote
- investment decisions
- personal finance
- government policy
- market analysis
Key Concepts
Austrian economics
business cycles
credit expansion
Questions to Reflect On
- How does expectation of inflation affect spending?
- What safeguards can prevent a credit‑driven boom?
A Different Perspective
If credit isn’t curtailed, the boom can become a destructive crash.