Why Hayek Won The Nobel

clipped from www.lewrockwell.com Now anyone at CPAC knows who Ludwig von Mises and F.A. Hayek were. Hayek won the Nobel Prize for showing how the central bank’s manipulation of interest rates – in other words, its intervention into the free market – leads to the boom-bust business cycle with which we are sadly familiar. Even those who claim to support the free market see nothing amiss in a monopoly central bank with the monopoly power to create money out of thin air.  They spend their time talking about what our Soviet commissar in charge of money and interest rates should do, instead of asking whether we need central planning of money and interest rates in the first place. The housing bubble could not have arisen without the Federal Reserve.  Had people started buying houses at unusually high rates, banks’ loanable funds would have begun to deplete, interest rates would have shot up, and that would have been the end of it.