... but it rhymes. - Mark Twain
The following is a quote from Elihu Root, recounted by Thomas woods in his speech the other day. Root, who was the recipient of the Nobel Peace Prize and served under Presidents McKinley and Roosevelt at the turn of the century, was referring to the disastrous nature of inflation at the hands of central banks:
“Little by little, business is enlarged with easy money. With the exhaustless reservoir of the Government of the United States furnishing easy money, the sales increase, the businesses enlarge, more new enterprises are started, the spirit of optimism pervades the community.
Bankers are not free from it. They are human. The members of the Federal Reserve board will not be free of it. They are human....Everyone is making money. Everyone is growing rich.
It goes up and up, the margin between costs and sales continually growing smaller as a result of the operation of inevitable laws, until finally someone whose judgment was bad, someone whose capacity for business was small, breaks; and as he falls he hits the next brick in the row, and then another, and then another, and down comes the whole structure.
That, sir, is no dream. That is the history of every movement of inflation since the world's business began, and it is the history of many a period in our own country. That is what happened to greater or less degree before the panic of 1837, of 1857, of 1873, of 1893 and of 1907. The precise formula which the students of economic movements have evolved to describe the reason for the crash following the universal process is that when credit exceeds the legitimate demands of the country the currency becomes suspected and gold leaves the country."