Another click of the ratchet

Once again, we see the not-so-invisible hand of government setting us up for yet another major economic disruption. And then, we can expect people of a certain political stripe call for greater government involvement to bail us out of the mess they helped to make.

The problem we face today, however, is that financial institutions, flush with easy Fed money have become heavily invested in the oil industry – just as prior to 2008, financial institutions, flush with Fed money, poured money into housing. If the oil industry contracts, the losses will extend deeply into the financial sector and the other bubble industries that have grown up around the industry in recent years.

via Blog | Mises Institute.