“You don’t take a very responsible job at a time like this and jump after eight months to make money in the private sector.”

-       Anonymous ‘Senior City banker’ quoted in The Financial Times after John Kingman of UK Financial Investments said he was stepping down. This response would seem to indicate that a) banking itself is irresponsible; b) the anonymous banker explicitly acknowledges he himself is in it for the money; c) bankers still dominate the field in the hypocritical delivery of advice to others; d) the coinage ‘banker’ has now completely replaced its assonant rival as a term of abuse to describe the hopelessly objectionable and contemptible.

The great Austrian economist Ludwig von Mises had the final word about a terminal credit crunch:

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” (Mises, ‘Human Action’, 1949.)

But there is an almost insurmountable problem in viewing the investment markets through the rigid and unforgiving prism of the so-called Austrian school. Mises wrote of the world as it should be. We live in the world as it is. Our own investment markets, or at least those of the supposedly developed west, are now government-directed parodies of free markets – having theoretically been at economic war with socialism and communism, and having seemingly triumphed as the Berlin Wall fell, the governments of the west have now adopted much of the socialist-driven command economy model that they had ostensibly vanquished as recently as 1989.

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