I am back! – An update.

Paper Money Collapse Second Edition

Paper Money Collapse - Second Edition

Turns out my ‘final’ blog was not so final after all.

Yes, it is true. I am coming out of blogger retirement. It has only been a few months since I called it quits but here I am again. Why did I change my mind? First, I received a lot of very nice feedback from people who enjoyed my blogs and encouraged me to keep writing. It was great to see that some people really liked what I had to say and had a genuine interest in my views. Second, it was fun and I missed it. I simply enjoy blogging and writing, and I remain passionate about economics. Third, and this may sound immodest but what the heck, I say it anyway – I think this matters. Our fiat money system has finally achieved what all elastic money systems accomplish ultimately: it has manoeuvred itself into a corner from which there is no painless exit. All our troubles are systematic, not cyclical as the mainstream economic consensus keeps telling us. The arguments for the policies of easy money, inflation, and asset price manipulation are based on fallacies and misconceptions, yet they get repeated ad nauseam in a decidedly underwhelming public debate. The discussions in the media frequently make my heart sink. It is depressing. The new meme out there is that the system has been mended and that central banks are finally in ‘exit mode’ from their ‘unconventional’ policies [audience laughter here].

The case for free markets and sound money, and against fiat money, central banking and market manipulation, has to be made, and it should be made on the foundations of the Austrian School. As things unfold, I think there will continue to be demand for a well-considered alternative perspective to the dreary mainstream nonsense. Maybe this is even a public service, as a friend of mine suggested. I know I am not the only one doing this. Fortunately, the hard-money fraction and the Austrian School have some prominent spokespeople, and I may only be a small voice in this debate, but I think it has to be done. And I enjoy doing it.

What about those ‘projects’ I mentioned in my farewell blog a few months ago? One has been to explore ways in which I get involved in asset management or wealth advisory, and this project is still ongoing. Is there a risk that this may ultimately stop me from blogging? Yes, but there is also a chance that the two could coexist or even form a symbiosis. If that is indeed the case I expect this website to evolve over time and become a platform for other services, too.

The other project I have been working on was to thoroughly revise and update Paper Money Collapse for its second edition, which is due this summer. I cherished the opportunity to go through the text again with a fine comb, and to embellish and strengthen the argument further, an exercise in which I was greatly aided by the many queries, constructive criticisms, and suggestions I have received since the book came out, not least from readers of this site. The core argument and my conclusions have not changed from the first edition (“this will end badly…”) but the second edition gave me the opportunity to address some recent developments, not least the rise of Bitcoin, and also to include some additional reflections on Tullock’s critique of the Austrian Business Cycle Theory, on the arguments of the “free bankers” (Selgin, White, at al.) and the advocates of 100-percent-reserve-banking and a completely state-controlled money supply (the old “Chicago Plan”), and on the odd but strangely well-received attack on monetary economists by anthropologist David Graeber. These are not new chapters. I only deal with these topics to the extent that they relate to and matter for my main argument. I hope that this helps clarified my position relative to alternative theories and that it has made my own arguments stronger and the presentation of these arguments more complete. Work on the book reinforced my conviction that the topic is highly relevant and will remain so.

This is the second blog in which I explain my own decisions and projects. Enough of that. It is time to pay attention again to the big economic debate. I hope you enjoy the analyses presented here and find them enlightening and useful. Thanks for reading.




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Bitcoin has theory and history on its side
Final blog: Thank you and good-bye for now.


  1. MD says

    Good to have you back. I was beginning to think that the dip in gold had made you rethink your predictions! I have been following Peter Schiff in the meantime…

  2. Mindaugas Jonikas says

    Congratulations Detlev and welcome back! The Cobden centre page without your posts was clearly lacking inspiration recently. And yes, a responsible asset management would clearly be synergetic with an articulated Austrian worldview. Just look at the growth of Edelweiss Holding funds alongside their edelweissjournal.com
    I look forward to the expanded second edition of your book.

  3. Todd Stromswold says

    I am so glad to see this! And I’m really looking forward to your revised book. I’ve recommended it to dozens of friends and clients. Unfortunately it is extraordinarily difficult to convince people to take the time to educate themselves if the materiel can’t be summed up in a few bullet points. Your blog was a voice of sanity in an insane world. Thank you!!

  4. Lee Waaks says

    As you work on your second edition, you may wish to consult George Reisman’s brilliant book, Capitalism. He synthesizes monetarist/Austrian ideas when explaining recessions. Although he does stress malinvestment, he places more stress on the liquidity crisis that eventually develops when businessmen are tempted by lower interests rates to lower their cash holdings.
    Best of luck.

  5. Myno says

    Welcome back! During your absence I’ve been doing my best to see the world through the lens of your book and previous commentary, imagining how you might analyze events. Is is nice to have the real thing back, live, so to speak.

  6. Paul Troon says

    I’m looking forward to reading the 2nd edition of your book Detlev. You had me at Bitcoin, but it’s also time to refresh what I learned when I first read Paper Money Collapse.

    Thanks also for sharing your knowledge and clarity of thought on these issues via your blog. Falkvinger used a Swedish proverb recently, “The road turned, but Pekka didn’t.” I believe this sentiment applies well to the current central banking based financial system. The old tricks won’t work any more – people have more independent information thanks to the internet, and perhaps even some new options thanks to decentralized crypto-currency.

  7. Srinivas Muthadi says

    Certainly a happy news! There has been a vacuum for the past 6 months! Glad to see your blog active again. :)

  8. Sadiq Merchant says

    The world has never needed your voice more than it does now – and if the troubles are indeed systemic and not cyclical – then who better to comment upon the monetary policy endgames to be played out in DM and Japan over the coming months – than the Maestro Schlichter? Welcome back – you have been missed!

  9. Ants Viirlaid says

    “Maybe this is even a public service, as a friend of mine suggested. I know I am not the only one doing this. Fortunately, the hard-money fraction and the Austrian School have some prominent spokespeople, and I may only be a small voice in this debate, but I think it has to be done. And I enjoy doing it.”

    I add my voice to those here and elsewhere who thank Detlev for coming back.

    It is good to know that you enjoy what you do, Detlev!

    So while you do enjoy it, we all know that there are sacrifices in doing what you do, and certainly every word that you create takes care, thought, and deep reflection to put down here, and elsewhere, in “the record” — in other words, what we all know is that there is Real Work involved here.

    So pace yourself because even in this arena, that you enjoy, you can burn out.

    And, as you suggest, your contributions will remain.

    “The discussions in the media frequently make my heart sink. It is depressing.”

    Also, besides pacing yourself (through which I hope you can conserve your health and energy) I also hope, that, if you can, please release from your psyche those ‘depressing’ aspects of the topic we are all interested in and worry so much about. Your taking on any internal depression only will make the struggle (to explain to others) that much harder.

    I have always personally tried to live my life with respect for other Life — and my own. Separating out the depressing aspects of the subject you deal with, will make you a better ‘doctor’. Much like an oncologist, who refuses to let cancer’s many victims get her depressed, you are much more powerful as a healer for all of us, if you don’t let your subject matter EVER get you down!

    The arena you deal with concerns a critical social issue in that so many people have been victims (virtually all of them unknowingly) of The Federal Reserve and other central banks and the broken credit-money systems that they operate along with the fractional reserve banking systems they oversee. I daresay that even most central bankers have no idea that they cause harm — quite the opposite, in that what they do, they do with good intentions — which is perhaps the most ironic and tragicomic aspect of all of this.

    Historians have a hard time (and so do we all) with teasing out just how much the Great Depression had to do with subsequent historical events, but we and they know that wars and hard times are linked. And many of us happen to believe that booms followed by busts (all engineered within the broken system we live in) create just those perfect conditions wherein wars are given birth, people die, and violence and suffering are magnified.

    Did the Holocaust have to happen?
    Did the Second World War have to happen?
    Did Hitler and Stalin have to happen?

    Did the First World War have to happen?
    Did Russia have to take the tragic path to Communism early in the 20th century when she had a chance to establish a true democracy after the rule of the Tsars?

    What role did money manipulation have in the tragic turns of events in the last century? Was Hitler created by the Weimar Republic’s folly with paper money?

    How much does the Federal Reserve have to answer for, in having first created the Great Depression and then having exacerbated it? An entity that was founded in 1913 to putatively lessen the business cycle booms and busts engendered by the fractional reserve banking system it was supposed to oversee did what? Created a century of greater monetary disruption than had ever been seen previously, that’s what! Of course excepting our current century which has yet to unfold.

    What you are fighting for is nothing less than true justice for the victims of that past tragic history alluded to above.

    Furthermore, what you are trying to promote is a system that would lessen or even avoid altogether those other future historical tragedies which similarly will have their roots in the faulty credit money system that you have so clearly and brilliantly outlined in your work.

    Please know that your followers wish you Godspeed for your future endeavors.

    Your quest is a noble one.

  10. Adriano says

    Dear Ants,

    I am impressed by your words!
    It seems to hear Von Mises reminding us how important economics is, after all, for everyone even in those aspects we can’t possibly grasp at first.

    Let me join you in cheering for Detlev’s return!

    Comments like yours are a good reminder to us on how important people like Detlev are for all of us…

    • Ants Viirlaid says

      Thank you Adriano, I knew that my words represented many of us — given the other comments posted before mine, but your affirmation is most welcome!

      And thank you, Detlev, for fixing my typos.

      cheers, Hans

  11. Paul O'Neill says

    Hi Detlev,
    I’m really pleased that you’ve re-entered the blogosphere. So much the better. I think this year will be a great year for Austrian-style commentary and perspective giving, and you do that very well. So, I look forward to reading your blogs as well as your 2nd edition.

    Nice to see gold back on the up, eh?



  12. George Thompson says

    Mr. Schlichter, I too wish to add my ‘welcome back’ to the others preceding mine. In this insane world, we need more strong voices advocating a return to sanity. Your absence left a void none could adequately fill. Even your points with which I disagree, Bitcoin the star example, make me think and rethink my position – and that’s proof enough that yours is more than a voice crying in the wilderness. I would like to close by simply mentioning that what you describe as ‘the old Chicago Plan’, to this yank living right down the Blues Highway from Chicago, it seems that it is the present Chicago plan, considering that’s where its greatest practitioner did his best work before taking a job decidedly above his pay grade.

    Just your simple getting back to this work makes me feel smarter already.

    And a shout out to the Cobden Centre for all it does to restore monetary sanity to a fiat world.

  13. Eli Gabay says

    If you ever decide to take this blog offline as you were suggesting then please publish the articles somewhere, whether in a book or other format so that the wisdom in these pages does not get lost. Thanks for all the great things you have written.


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