Financial crisis, avoidability (avoidability of financial crisis)

Studies seem to show that financial crises are to a certain extent inherent in the market economy system. They are seen by many as the Achilles heel (the only place where the Greek mythical hero Achilles was vulnerable) of the market economy and the price to be paid for market forces directing scarce resources to the place of most economic use: to the best host. – However, the cause of past financial crises has always been too much debt: this can be proven empirically without any doubt. In financial history, it was once private households, then banks and – most recently – the state that could not reconcile expenditures with revenues. However, indebtedness is not an inevitable fate, but rather a culpable violation of the basic insight that one cannot consume more than one produces, usually over a number of years, and intended by private, corporate and political – as in the case of the state – decision-makers. – The research result of the financial history is disturbing, according to which up to now all financial crises led sooner or later to an inflation. But because in our postmodern era – compared to dull earlier times – economic reason is triumphantly breaking through, and – because all decision-makers not only have the insight but also the will to follow the dictates of economic reason, a financial crisis today no longer has to end in inflation. – See Elizabeth question, financial crisis, financial market disciplining function, crisis, central bank-induced, burdens.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/