Why are they called “Recessions or Depressions?”
By R. Nelson Nash
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” — Charles Mackay from his book, Extraordinary Popular Delusions and the Madness of Crowds.
In the economic world today we hear the words, “recession” and/or “depression” used regularly to describe a downturn in economic activity. There have been booms and busts in the economy throughout all history. Graphs are presented that illustrate the highs and lows over a period of time.
In the health field, Merriam Webster defines depression as “ a serious medical condition in which a person feels very sad, hopeless, and unimportant and often is unable to live in a normal way.” This means that something needs to be done to remedy this condition! This really is serious business!
Another example comes to mind. In the movie about the Apollo 13 voyage to the moon, “Houston, we have a problem” became a legendary phrase. Their problem definitely was a deviation from normal! They had to change to “plan B.”
Do the words recession and/or depression have different meanings in the economic and health fields? Is the low in a business cycle inferring that this phenomenon is a deviation from normal?
Rarely do we hear about the cause of the business cycles. Instead, the general attitude that we hear and read about seems to lead one to conclude that booms are the normal economic condition and the busts are aberrations that call for government action to remedy the situation.
I submit that this is backward thinking. The cause of the booms is the action of central banks. They increase the money supply sharply and people think they have more wealth when the truth is that they do not. I submit that this activity is the real aberration, and therefore, should be avoided. They only have dollars that are worth less than before. The “no-thinks” claim that they have “stimulated the economy.” It is all a lie! They have only deferred the inevitable correction which the money manipulators call a recession or a depression.
Words have meaning. The phenomenon that “the authorities” call depressions should be correctly classified as a return to reality because the increase in money supply did nothing more that create an illusion which always leads to a downturn in economic activity. This is deception in its purest form! Many writers have made the case that “the correction is equal and opposite to the build-up.”
Our central bank, The Federal Reserve, was created and put into law in late 1913. The dollar at this time is only worth two cents in comparison with the dollar in 1913. This means that it will take 50 of today’s dollars to do what one dollar would back then. Does this mean that we are wealthier today than in 1913? I don’t think so! Money is simply the medium of exchange that we use. As Murray Rothbard taught many years ago, in the economy, any amount of money will do.
I was a Second Lieutenant in the U.S. Air Force in 1952. The monthly base pay was $213.75. Housing allowance was $75.00. Food allowance was $41.00. Do you realize that we all got along very well with that monthly pay?
Where did all this current thinking come from? Who are these people who influence the thoughts of people? Maybe a better question is — why do people listen to this chicanery? Joseph Goebbels, Reich Minister of Propaganda in Nazi Germany from 1933 to 1945 provides a probable answer when he said, “If you tell a lie big enough and keep repeating it, people will eventually come to believe it.” He also said, “Think of the press as a great keyboard on which the government can play.”
Government has become the means of manipulating our lives through control. Their primary weapon has been government schools. But, the real puppet masters in this entire scenario are the bankers! Puppet masters are out of sight – but they are pulling the strings. In the last one hundred years they have totally captured the minds of people. Money and banking are the lifeblood of an economy. Our medium of exchange, money, must be warehoused somewhere for ultimate use in our lives. It needs to be warehoused in a location that cannot inflate the money supply. The place that best qualifies for this activity is a contract with a dividend-paying mutual life insurance company. There are thousands of people who have learned this truth through the teachings of the NELSON NASH INSTITUTE utilizing The Infinite Banking Concept.
It’s all about how you think– or is it, how you don’t think?