Soaring inflation will lead to a fictitious boom.  Goods will be purchased because the masses understand the money is losing value.   This will give rise to the crack-up boom.  The boom prior to that was manufactured, and the bust is a man-made disaster.  The crack-up boom is a symptom to printing money.  This will distort economic figures.  It gives the appearance of health, but it’s a sign that the economy is considerably worse.

The masses become afraid that the money they have won’t buy the goods they need.  It will continually lose value in the bank.  They use the money now to buy goods that’ll hold value better than cash.  This is a flight to real values.  It’s not a sign of economic growth.  It’s a symptom from excessive money printing.  It could very well be a sign of monetary breakdown.  The pseudo-economists can’t explain this.

As soon as the masses are ready to swap their cash for real goods, the crack-up boom has started.  It doesn’t matter to them whether they need the goods or not.  What matters is that the goods they buy are expected to hold their value better than cash.  The cash used now may be worthless when it’s needed.  It’s happened before and it will happen again.  As long as paper is used, the economy is primed for an extremely fictitious boom.

It’s impossible this could be addressed by trying to alter definitions.  This might confuse the public, and drag them into a debate that isn’t needed.  However, the reality of the situation doesn’t change.  The public doesn’t have confidence in paper.  There is a low expectation that they can buy the goods they need.  Continual money printing, and expanding credit can lead to the crack-up boom.

The final stage of the crack-up boom is a complete breakdown of the monetary system.  The banks would go bankrupt if they attempted to redeem deposits.  The crack-up boom can be prevented if gold is used.  Not just that, contractual obligations must be maintained.  No fraud, no banking cartel, and no counterfeiting.  That means, 100 percent of demand deposits are on hand at all times.

References

Ludwig von Mises; Human Action

Jesús Huerta de Soto; Money, Bank Credit, and Economic Cycles