While BIA will work with each client to create a customized philosophy and strategy for each account, the context or worldview in which BIA conducts this work is heavily influenced by the teachings and precepts of the Austrian School of Economic Thought.
Leader’s of Austrian School Economics such as F.A. Hayek and Ludwig von Mises have long warned of the dangers and temptations of politicians and central banking to credit expansion and inflationary policies. In fact, in 1974 F.A. Hayek won a Nobel Prize in Economics for his work on the Austrian Theory of the Business Cycle. While such policies seem to work in the short run, in the long run they are not sustainable and have historically led to significant periods of inflation, deflation or the worst of both worlds: stagflation.
While Austrian School Economics can not give us a crystal ball in terms or market forecasts, it does reveal the fallacies and potential risks associated with easy money policy and can guide you as an investor in developing your philosophy and strategy to deal with such risks.