Is the Surge In Capital Goods Orders Due to Malinvestment?

Is the Surge in Capital Goods Orders Due to Malinvestment? by Frank Shostak, Ludwig von Mises Institute Orders for US non-military capital goods excluding aircraft rose by 0.6 percent in August after a 0.2 percent decline in July to stand at $73.2 billion. Observe that after closing at $48 billion in May 2009, capital goods orders have been trending up. Most commentators regard this strengthening as evidence that companies are investing both in the replacement of existing capital goods and in new capital goods in order to expand their growth. Responding to Markets or the Central Bank? There is no…