After making this contribution to the Austrian Business Cycle page:
Financial crisis of 2007–2010
The financial crisis of 2007-2010 has resulted in a revival of interest in the Austrian business cycle theory,[31] but has also resulted in a revival of interest of theories more critical of Austrian theory, such as Keynesianism and Post-Keynesian economics.[32] In 2006, before home prices began their decline, Peter Schiff, a supporter of the Austrian school, made predictions regarding a crash in home prices. Schiff predicted a dramatic fall in home prices as the result of a bursting housing bubble which was inflated by artificially low interest rates, adjustable rate mortgages and real estate speculation. Schiff felt the bubble was being fueled primarily by the Federal Reserve and GSEs. [33] Ron Paul also indicated that housing was in a bubble back in September of 2001 for the same reasons noted by Schiff. While Paul did not put a date on when he expected a crash in home prices to occur, he did indicate that eventually a crash in home prices would result from the expansionary policies of the Fed and GSEs.[34] Ron Paul also spoke about the Austrian business cycle repeatedly throughout his 2008 presidential campaign.
Through 2008 to 2009 Schiff’s investment firm had not been able to turn a net profit from his strategies, although his firm did have a track record of profitability prior to the 2008 correction.[35][36] Schiff responded to his critics by stating his investment strategy time horizon was longer than the course of a year. The following year, Schiff’s managed portfolios were producing a net profit once again. [37]
Austrian economist Walter Block produced a list of over 25 Austrian school economists who made accurate predictions regarding artificially inflated home prices and the nature of the correction in housing prices that would ultimately precipitate from this.[38] The economists on the list followed the same logic laid out by Schiff and Paul to arrive at their predictions.
My revisions were reverted back to this version:
Financial crisis of 2007–2010
The financial crisis of 2007-2010 has resulted in a revival of interest in the Austrian business cycle theory,[31] but has also resulted in a revival of interest of theories more critical of Austrian theory, such as Keynesianism and Post-Keynesian economics.[32] After the United States housing bubble began its decline in 2006, Peter Schiff, a supporter of the Austrian school, made some predictions[33] regarding a housing crash in the US, though (as of early 2009) Schiff’s investment firm had not been able to profit from strategies based on his predictions.[34][35] Ron Paul also spoke about the Austrian business cycle repeatedly throughout his 2008 presidential campaign.
continue reading about this nonsense
here.
The predictions made by Paul and Schiff (the Ron Paul video will floor you if you haven't seen it before... trust me):
Schiff:
http://www.youtube.com/watch?v=2I0QN-FYkpwPaul:
http://www.youtube.com/watch?v=48Gfzgxh3ZQ
