We are living in a world of ever-expanding credit. By having so we are going from boom to bust and all over again. When the bust happens the nonwealth producing sectors of the economy are taken out. But it is a disaster for society. It is important to keep in mind that central banks are destructive. But in a completely free market will we also have busts.

Due to innovations, we are seeing new economies and old ones are collapsing. Take the shipbuilding. When ships were built from wood several towns had a massive economic boom. When the production of ships went into steel those areas went threw hard times. After all, is it not possible to immediately replace capital goods and labor. But over time some improvement is made.

It happened before. It also outlines the risk of a city that is built around 1 sector. Or, even worse, 1 large company. You saw it in Eindhoven when Philips decided to scale down operations. They released 50,000 staff. So the city turned itself around and is nowadays a global innovation and design capital.

One method to succeed from those a bust is by allowing entrepreneurs to invest in the assets at a discount. Just to have some form of employment back. With new innovative methods and some inefficiency cut out.

When the market is free we will see booms. Yes, the expansion of credit is making a boom easier. But next to cheap loans created by issuing worthless money it can also be by having some investors putting real savings in it. When they do it there is a chance they miscalculate and we see the boom.

When I look at what the government is doing in a boom-bust cycle I see that they are making it even worse.

Nowadays the recessions are caused by government interventions. The interventions hurt everyone. It is impossible to immediately change factories and plants. So we will see recessions and job loss. But when central banks and the government are out of it the damage is much worse.

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