Reply To: Some ABCT questions

[ronigafni]

“The further the misallocation proceeds, the greater the divergence between the lengthened production structure and people’s time preferences”

Can you expound on this a little? In such a case, Fed policy made entrepreneurs believe that they should invest in capital goods today in order to profit tomorrow. When tomorrow comes and there is no profit and the prices are all bid up too high, how does further Fed policy necessarily increase the discrepancy between peoples wants and the structure of production?