Bob Murphy: US Stock Market Overdue for a Tumble
Fergus Hodgson, 29 August 2016 
Rosario, Argentina, became home to the Austrian school of economics last week, with more than 300 people gathering at the International Congress to unveil their latest research — translated live between Spanish and English. This was not an event for mincing words, and two speakers were willing to share their contrarian views on the podcast.
Robert Murphy, of the Free Market Institute at Texas Tech University, took the time to explain the Austrian business cycle in the context of the United States, and he weighed in on what Mike Larson of the Safe Money Report calls the “everything bubble.” Any limited recovery, in his view, is unlikely to last: “I would be very surprised if the US stock market doesn’t have a major drop within the next 12 months, if the Fed doesn’t inflate more; and I don’t predict that they’ll inflate more, unless there is first a big stock-market drop.”
Edgar Ortiz Romero made the case that a fixed exchange rate would offer stability and place a check on central banks that inflate their currencies. (Source: @ceolive)
Edgar Ortiz Romero is a member of the faculty at Francisco Marroquín University in Guatemala City, a university with a stellar reputation for teaching free-market economics. He presented a paper, yet to be published, on the problems with floating exchange rates. His recommendation is that central banks, if they are to exist, need restraint, and fixed rates offer this.
“Under a fixed exchange rate, the central bank is not allowed to print as much money as they want. They are only focused on guaranteeing the citizens that they are going to convert the money.”
The sixth International Congress of Austrian Economics attracted many classical-liberal thinkers and activists. From left to right: Cecilia Olive, the official photographer of liberalism in Argentina; María Marty, director of the Foundation for Intellectual Responsibility, based in Buenos Aires; and Noemi Díaz Corral of the Xoán de Lugo Association, a new think tank in Spain. (Source: @ceolive)
Recommended Links
- The Politically Incorrect Guide to Capitalism by Bob Murphy (206 pages, Regnery Publishing, 2007).
- Choice: Cooperation, Enterprise, and Human Action by Bob Murphy (338 pages, Independent Institute, 2015).
- “
Fergus Hodgson (@FergHodgson) is an economic consultant and Gold Newsletter‘s digital-media director.