Tyler Cowen and Sybil have both pointed to this link, and I will do the same. I have long sense assured myself that Monetarism will neither significantly affect Inflation, or stabilize bubbles. It will not impact Inflation, due to the fact that the two real Sources of Inflation is Government deficit spending, and the excess funds available for Investment when there are no Investments capable of being Profits-producing at Market standard (what the article in the WSJ means about their being durable, but not fungible). The term ‘fungible’ means the ability to translate into Cash, either through Sale or Production activity. Austrian theory suggests an alternate expectation that too much later Investment in the recent buildup has been of high Risk-Taking, while enjoying little Profits potential. I agree with this assessment.
The Austrian proscription for Monetary controls mirrors the policy of Burns as Fed Chairman, which proved to be a medium-sized disaster for the American economy. I personally think that current Fed rates are too high, but do not advocate their reduction before introduction of proper Controls necessary to counter the effects which the article stipulates. There is only one effective Proscription for Inflation and Control of Bubbles–higher Taxation.
Almost every Economist–including the Austrians–would not agree with the area of Taxation needed, which is increased taxation of Business Profits. Governments must pay for their own Expenditures; best funded by taxation of Business Profits; something which does not significantly limit Investment capital under modern Financial institutions and Instruments, and it is insane to tax Consumers when the need is for them to purchase the Product Sales necessary for Business Profits to be realized. Business taxation leads Business to curtail excessive Expenses (to trim both Production and Management expenditures), generating careful Management supervision of Production, Distribution, and Sales, and finally; inciting increased expansion of Investment, but Investment which meets the standard Market Profitability. lgl