"The general fact that booms have always appeared with a great increase of investment, a large part of which proved to be erroneous .. fits in with the idea that a supply of capital was made apparent which wasn't actually existing. The whole combination of a stimulus to invest on a large scale followed by a period of acute scarcity of capital fits into this idea that there has been a misdirection due to monetary influences .. but this is capable of a great many modifications, particularly in connection with where the additional money goes .. Since [I wrote] so much of the credit expansion has gone to where government directed it that the misdirection may no longer be overinvestment in industrial capital but may take any number of forms. You must really study it separately for each particular phase and situation. The typical [pre-war] trade cycle no longer exists. But you get very similar phenomena with all kinds of modifications."
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