1. At any given time there is a fixed amount of labor and raw materials available for production. 2. The interest rate is how the economy balances what could be produced given the resources available against what people are actually willing to pay for when they have to choose. 3. Any government interference in the economy, especially interest rate manipulation, causes investment in the production of things people want less than what they would otherwise have chosen - malinvestments. 4. The accumulation of malinvestments is what causes recessions. 5. Recessions are simply the liquidation of malinvestments and the release of resources back into the market so that they can be redirected into other lines of production.