Douglas Carswell

28 DEC 2011

2012 - the year of the Austrians?

No, I'm not suggesting athletes from Vienna will scoop all the London Olympic gold medals. I'm talking about a deeply unfashionable economic theory. You might even call it the anti-theory, seeing as how Austrian economists, unlike monetarists or Keynesians, don't go in for trying to engineer economic growth.

I think we're about to see a revival of interest in this long ignored school of free market thinking.

Why? Well ponder what's happened over the past four years...

2008 was the year the West turned a artificial credit bubble into a very real credit bust.

2009 was the year we turned that credit bust into a banking crisis.

2010 was the year we turned that banking crisis into a sovereign default crisis for peripheral Eurozone economies.

2011 was the year we drew most of Europe into the sovereign default crisis.

Watching the European Central Bank lending billions of Euros it does not have to try to fix the debt crisis, part of me wonders if 2012 be the year we manage to turn a sovereign default crisis into the collapse of a fiat currency?

The only prediction I'll be making for 2012 is that Austrian - or honest money - economics will be more mainstream in twelve months time than it is today.

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