Fifth, the new combination of the emergence of groups, it is easy and inevitable to the prosperity of the period to explain the fundamental characteristics. It can explain why the increase in capital investment for the future prosperity of the first signs of why the production of capital goods companies first showed unusually excited, it is particularly important, why increase consumption of iron. It can explain the boom of a large number of new purchasing power, as well as the resulting increase in prices of the characteristics, and these problems alone, cited the increased demand or increased costs can not be explained. More entrants, which could explain the decline in unemployment and rising wages, interest rates rise, the increase in freight, balance of payments for banks and bank reserves growing tighter, and so on and, as we have said, but also explain the secondary wave or secondary wave of release - and spread prosperity throughout the economy.
3. C the emergence of entrepreneurs in bulk is the only reason for prosperity, the impact of its economic system, different in nature from the time entrepreneurs successive uniform system of economic impact, as long as it does not like the post - who, as a continuous means, and even can not be perceived to interfere with a balanced position, but a jump of interference, a different order of magnitude of the interference. When a row by the entrepreneurs to the emergence of the interference caused by absorption can be continuous, batch or groups of entrepreneurs in the emergence of a special need to identify the absorption process, a merger and new economic system with adapted to the process, a clean-up process, or as I have often said, in order to explore a new way of static state. This process is a cyclical nature of depression, therefore, based on our point of view, it can be defined as the struggling economy to a new equilibrium state, to adapt to the interference by the prosperity of the situation changed.
The essence of this problem does not lie in the fact that only care about their own business plans of the various entrepreneurs, with no regard to others to follow in batches, so it failed. From the perspective of individual enterprises is considered correct behavior, the results are likely to be of the same act of the majority of people the role of the general quiet away or arrival, which of course is true. When we explained that the producers in their efforts to maximize profits in the process of how to launch a tendency to eliminate the residual value of the entire system and its operation mechanism, we realized that the most important aspects of the case. Similarly, the general effect may also be here to make those things the right individuals into a fallacy, and that such elements will in fact play a role most of the crisis, because, in spite of the entrepreneurs in this rush and after to the situation, that he may have known in advance, and he can not, however, the situation of the scale and pace of development may often estimate the error. However, the interference caused by the prosperity of the essence, is that it often does not disturb the fact that entrepreneurs intend to, but the following three conditions
First, the new entrepreneurs of the purchasing power based on the new demand for the means of production - well-known period of prosperity, the competitive scramble for means of production , cited in Laidler, then - raised the prices of these items. In fact, this trend has been weakened by the fact that at least some of the new enterprises will not be parallel with the old business there, but among the older generation and businesses will not be old and not a profit-ray production, and is still have to earn some quasi-rent. However, we can the nature of such business to make the best, if we assume that all of the innovation embodied in the newly established industries, are separate from the purchasing power of the new funding to open up, and took place entirely in a number of the flow cycle and available non-profit, which started as a result of the increased cost of production of the industry losing side. Real-life conflict with the idea of the situation, than we imagined less. In fact, only over time in an atmosphere of prosperity on the cover up the fact that shortly after the beginning of prosperity, and as long as it is to express the increase in demand, then the prosperity of many producers would mean suffering, even though when the price began to rise it will reduce the time. This suffering, as explained in Chapter II, as is the withdrawal of the means of production from the old industries and new uses for a form of process.
Second, new products or in a few years to find the market more quickly and with the old product competition previously created by the purchasing power of commodities to add - from the theory of purchasing power and more than offset - to enter into the circulation cycle. On the other hand, the results of this process in effect for the reasons described in a pre-moderated further, due to the fact that the relaxation, which is due to investment in certain procedures from the final product, so this can only be gradually added appeared. However, this has not come into contact with the nature of the process. The beginning of the period of prosperity, the rising costs of old industries after, as long as consumers demand more favorable to innovation, then innovation and competition with the income of those industries to reduce first, and then all the old industries have reduced income. Regardless of profitability and innovation brought about by secondary to the possibility of how the loss of their production can only be only temporarily effective buffer quasi rent of the check. It is precisely because most of the old industry base thick, and seems to enjoy the credit of particular treatment, so their loss will not immediately lead to the production of the collapse. Part of their bankruptcy will affect the success of new enterprises. This bankruptcy by the following explanation of our framework with the fact that most of the buffer First of all this prosperity has never been universal, but rather focus on the industrial sector or a number of departments, so that other areas are not disturbed, and Later, just in a different way and secondary effects of other areas. As entrepreneurs en masse en
masse as there their products there is also a bulk, as the entrepreneurs do not all kinds, but do very similar things, which is almost at the same time their products appear on the market. Before the appearance of new products that must be experienced by the average amount of time - despite the fact it is natural to want to depend on many other factors - can be explained simply the length of boom. The emergence of new products, price drop, the drop from the termination of this in terms of prosperity, may lead to crisis, or is bound to lead to depression, so all the rest of the things one after another for us.
Third, the new enterprises that lead to the result of the emergence of the credit crunch, because entrepreneurs are now in - with sufficient enthusiasm - to pay off the debt status at the same time as the other did not intervene in. borrowing, which led to the purchasing power of the newly created the disappearance of just the purchasing power of the legitimate goods such supplements at the time of emergence, so it can flow the way to the cycle repeated production. This argument needs careful maintenance. First of all, this deflation and the other two cases must be distinguished. The emergence of new products will be caused by deflation, the reverse is not only the price level during the period of prosperity, but also reverse the depressed period of the previous price level, even if the means to pay the debt in the process of entrepreneurs did not completely disappear, because it is clear new products and the price is greater than under normal circumstances the total amount of these debts. This should, in spite of a lesser extent, the same generation and the effect of clearing debts but we now only consider the effect of debt reduction. Deflation also emerged that already exist in the banking sector or the expected recession, and as banks take the initiative to limit credit. This factor is very important, and often the real cause of the crisis but it is incidental, not inherent in this process. Here, we still do not take this factor into consideration, although we do not deny the existence of this factor does not negate the importance of it, but its causal role in the first. Thus, further, our formula contains two abstract concepts, they will make those things all the more substantive clear, but ruled out the great importance of the buffer the impact of reality. First of all, it ignores the following facts The new products are generally only invest in the production process includes depreciation share a small part, therefore, when the new business ready to go into production at a total cost of the boom, only part of, and are only a small portion of it to be the form of sales to the market the new purchasing power created only gradually leave the circulation, in part, only in a period of time after the prosperity of the credit when more suitors credit
seekers are brought into account when the money market. Through savings on the purchasing power of a new re-absorption, deflation does not change anything in the process - but in many countries, autonomous regions, as well as the event of agricultural mortgage bank is to reduce the demand of enterprises, and that the situation is quite different. In addition to the gradual disappearance of the liabilities of entrepreneurs, we also must remember that when the interest rate cycle flows infiltrated into the modern economic system, the credit may even be permanently preserved in circulation, as long as there is production of goods year after year, corresponding counterparts - this is the process to further buffer the second factor. However, because of all those reasons, the trend of deflation is still effective, and successful companies appear to carry out clean-up of the debt situation. Therefore, when prosperous, when fully developed, even if deflation in a very mild form, it will automatically as a result of the objective situation and the necessity arise. This theory led to a long-term price level in the development process of the conclusions must be dropped, in fact, has been the history of the 19th century to make the price it is worth noting to prove. Has not been a revolutionary change in the monetary system by disrupting the two periods, that is, from the Napoleonic Wars to the California gold discovery period, as well as for the period 1873-1895, in fact, we have theoretically demonstrated the expected characteristics, namely, every a cyclical downturn deeper than before, at the same time, the elimination of the cyclical fluctuations of the price curve is downward-sloping moving.
Finally, we must also explain why other entrepreneurs do not seek credit for the regular access to clean up the debt situation. There are two reasons for this, and in fact can also be combined with other reasons, these other reasons or can be described as the basic elements of what we call the result of, or incidental, or as a result of the impact of the outside world, and In that sense, or secondary, unessential, subsidiary. First of all, one of the reasons is that if the kind of show in the success and prosperity of the industry under the stimulus of many new businesses have emerged that play a role in the full time, producing a large number of, by falling prices and rising costs - such decreased and increased, even in our investigation of the industry subject to increasing returns in the so-called law of the case, it will still be there - to eliminate the corporate profits of the products, then further along in this direction will impact the consumption of almost do. In fact, even in a competitive society, the elimination of profit is only approximate, and this process is not excluded from the preservation of some of the profit or loss immediately excluded. To entrepreneurs in other industries where there can be restrictions, as well as the development of sub-wave phenomenon caused by the restrictions can be defined similarly. When the time limit, the impact of this prosperity has been exhausted. The second was a reason to explain why prosperity is not new to the ensuing straight because a group of entrepreneurs at the same time the action has changed the economy of the fact that it destroyed the balance, thus causing the economic system obviously does not campaign rules, and this is our idea of a balanced position to a new struggle and struggle. This makes impossible a precise calculation of the general, and especially for the planning of new enterprises. In fact, only the latter factor - the kind of prosperity due to the creation of the new and unique to the uncertainty - is often observed immediately first name restrictions are only in some places. However, they both, first, many individuals will be expected of the kind of foresight consequential phenomenon, very vague. Some people will be faster than others began to feel nervous, as the case of banks some people do feel, as well as other elements of the cost increase, as many old enterprises and thus react accordingly - in most response is indeed the case it is too late, but when they, especially those that are weaker, and indeed is affected by the impact of the way panic reaction. Second, they will be made by chance events ambiguous, although these events will always occur, but these events are in the prosperity generated by the uncertainty of miu miu bag never had to gain significance. That explains why people who have experience in almost every crisis, he could have envisaged the events cited by chance, for example, that the adverse political rumors, as the reasons for, and why in fact often the driving force generated by these. Third, they are acts of interference from outside very vague and that the reins of the central bank39s conscious act of driving is usually interfere in the most important.
4. If the reader for the things to ponder on, and on the actual material or crisis and the economic cycle based on any theoretical arguments, to be tested, then he will know how to prosperity now is being explained is how to create one39s own kinds of objective circumstances, and such an objective situation, even if the neglect of all the elements of adjunct and casual, but also the end of prosperity will easily lead to a crisis will inevitably lead to depression, and thus lead to a temporary state of relative stability, as well as the disappearance of the development. This recession, we can re-absorb and clean-up called the normal process With regard to the following series of events characterized by the crisis - fear the collapse of the credit system, bankruptcy, as well as its further spread of the results - we are I call them the clean-up of non-normal process. And duplication in order to complete some of the points, we are now on the process a few things to say about, but this is only on the normal process, because the process does not irregular to show what the fundamental problem.
Above, a direct result of the Depression and all the basic understanding of the characteristics of the secondary, the performance of these features is a single component of a causal link. Itself is bound to lead to prosperity and a wide range of industries operating at a loss, caused by the drop in prices outside of deflation, in addition to the credit crunch caused by the adoption of deflation - in a series of events in the process of all sub-surge. More entrants, capital investment and the reduction of business activities, thus the means of production arising from the production of industrial stagnation,index steel consumption, as well as a similar drop markings, such as United States Steel Corporation is not full of orders, explanation can be obtained from here. With the decline in the demand for capital goods, interest rates - if the insurance factor was eliminated - as well as employment will also decline. With the decline in monetary income, the reasons for this decline can be traced back to the deflation, even if this demand increase as a result of bankruptcy, etc., but for all other commodities will continue to decline in the demand for the final, and that this process has been thoroughly into the entire economic system. Depression declared the completion of this picture.
However, there are two reasons for these features can not be made in accordance with the causal relationship between their position, according to the time the order shown. The first reason is the fact that they not only were the acts of individuals is expected and is in a very unequal extent, been anticipated. This occurred in particular plays a huge role in the specialized speculative markets. In this way, the stock market is sometimes far from a real turning point in before the arrival of the speculation on the performance of the initial crisis, the crisis has been overcome again and still belong to the same period of prosperity in 1873 and 1907 the further increase in exercise, create the conditions. But there are other things much more important. In fact, as a rise in prices, often as it is expected that the cost of the reasons for the increase as a result of a similar phenomenon here. When the prosperity achieved as long as its external pole before taking into account the inevitable result of this process, then we have been talking about the meaning of the meaning of the reduction in capital investment, the same reduction in entrepreneurial activities, as well as the means of production such as the stagnation of industry, may there will be but not necessarily that they should be. Conversely, if these signs of prosperity, as usual, appeared before the termination, then this is because they are very quickly that can predict what will be coming under the influence of factors. However, the second, the situation will lead to all sorts of things happen in the actual process, it is often more than a factor of secondary importance to highlight the main factors. For example, lending on the rise in interest rates to show anxiety, and depression just to late, as things that are usually the most essential characteristic of the normal process from very early on the impact of shows will be shown. Reduction of labor demand such changes should be a very early symptom, but, as due to the existence of unemployed workers, as usual, so that wages will not improve in the immediate period of prosperity, as the amount of wages and employment barriers due to the existence of a series of well-known , which usually will not look like the people as rapidly declining. Business community efforts to protect themselves against the falling prices and competition is not completely free place - a completely free where in fact there is no - that when the funding provided by the banks, it and the temporary the success of resistance, thus an increase in the maximum price level is often later than the turning point. This is a crisis in the basic work of the investigation should be given to all these points. However, without further confirmation, this suffices to show that all of these did not change the substance of things, but I mentioned above took place in other areas similar to the phenomenon, but to support the argument against the theory of prices.
The development of depression during the course of things shows uncertainty and irregularity of the picture, this uncertainty is irregular and we find a new equilibrium point of view, or from adapting to the already very rapid and very substantial changes in the general situation to explain. This uncertainty and irregular it is easy to understand. Information on day-to-day focus on each industry to change. But the extent and nature of change can only come through experience and understanding. With new competitors the old customer and the merchant does not appear the past on the new economic facts of the correct attitude to be found unpredictable events - no doubt to the credit of the refusal - that may arise at any time. Pure business in the face of the existence of the problem beyond the conventional, in the face of the problems he is not accustomed to, in the face of these problems, he caused the error, and these errors will be the further emergence of an important secondary reason for trouble. Speculation is a further reason for the adoption of the distress experienced by speculators, but also through the speculators to forecast a further fall in prices, making all of these elements is well known to stimulate the growth of each other. Not a place to see the final outcome crisis has nothing to do with weaknesses in any place will be displayed. Business contraction and expansion of enterprises, it will eventually prove to be the right way to react, and can not be made at the time of the issue or issues that should be reason to believe. The situation of this complexity and uncertainty, in my view, unfounded theories used to explain the causes of recession, actual events will truly become an important factor.
Included in the adjustment process in the new data and the value of uncertainty, as well as the law and can not be expected to clear losses, resulting in the unique atmosphere of recession. Notes generate views the transaction as well as in the prosperity of the period from the business and the community was especially significant speculative element, in particular difficulties. For many people, especially the speculative class, as well as some depend on the demand for luxury goods producers, in essence, than they also demonstrated by the bad - for them, it seems that all of these things have come to the end. From a subjective point of view, especially if the producer prices to resist the inevitable, then the turning point appears in front of the producer, as is so far the potential of overproduction of the outbreak as well as the same as the result of the recession. Goods have been produced by the lack of sales, more serious to those who will continue to produce goods from the lack of sales, enough to pay these costs under the monetary tightening caused, or may even be unable to pay and so further well-known phenomenon is so typical, so that each economic cycle theory must explain it. As the reader can see, our theory is this, but it does not regard the fact that such a typical and independence as the basic reasons. This overproduction has been noted and we have already explained by the prosperity and increase the distortion. On the one hand, such environmental conditions, as well as in the recession process on the other hand, appear in many industries in the effective supply and the gap between effective demand, making it possible to use a variety of theories to describe the lack of co-ordination of the external form of depression. Each of the essence of this theory, is to attempt to explain the emergence of non-conforming, as well as the existence of which, according to the view that lack of co-ordination of the special number. For us, the number of commodity prices and the lack of co-ordination between, which in many places is due to the economy arising from loss of balance, as overproduction, is an intermediate phenomenon, not a basic reason. In relation to this, in various industries that may exist between the income of the non-conforming, but in different economic strata do not exist between the income of non-conforming, because the profits of entrepreneurs and others may be subject to interference between the revenue, there is no the proportion of normal relations and in addition to the monetary form of fixed income, other income with the same speed of movement of the trend in favor of or detrimental to the corresponding fixed-income profits or damaged, but so that the total consumer demand interference.
Deviation or departure from prosperity on track, in many cases also have such an outcome, that is, the tense and dangerous situation, all sectors of industry, not the same degree. Experience has also taught us, as has been describedfarmers, and almost entirely free from any interference in many sectors, some departments have also only been less interference. In each industry will be new business in general than the old enterprises more heavily involved, this seems to contradict our description. This can be explained this way the old enterprises have buffers quasi-rent , and more importantly, the accumulation of reserves generally. It is embedded in the protection of relationship, often for many years been the status of the bank with an effective support network. It may defeat a number of years, and its creditors do not feel uneasy. Therefore, the old enterprise than to maintain the long-term than new enterprises. The new business is always strictly and are suspected to be examined it does not reserve a maximum of only overdraft facilities and it shows that as long as the signal experiences difficulties, will be considered to be the verge of bankruptcy debtors. In this way, all the circumstances of the role of changes in response to the new business enterprise than the old, it is necessary to reveal more and more alarming earlier. Therefore, it occasions in the former than the latter occasion in a more easily lead to the final outcome - bankruptcy, and for the latter began a slow decay. This distorted picture of reality, and is the reason why a crisis can only be selected in order to process an important restriction on the reasons for them because only the kind of strong support by the manufacturers, rather than their own most of the manufacturers to improve with the best chance to survive the crisis. However, this does not affect the essence of this phenomenon.