# malinvestment Summary::An investment in wrong lines which leads to capital losses. An investment in wrong lines which leads to capital losses. Malinvestment results from the inability of investors to foresee correctly, at the time of investment, either (1) the future pattern of consumer demand, or (2) the future availability of more efficient means for satisfying a correctly foreseen consumer demand. Example of (1): An investment of available savings in a manner that cannot produce as much consumer satisfaction as the same funds could produce if invested differently. Example of (2): An investment which, before the end of its expected useful life, becomes obsolete due to the unforeseen development of more efficient means for satisfying the same consumer demand. Malinvestment is always the result of the inability of human beings to foresee future conditions correctly. However, such human errors and the resulting malinvestments are most frequently compounded by the illusions by undetected inflation (q.v.) or credit expansion (q.v.). From the viewpoint of attaining maximum potential consumer satisfaction, every political intervention, other than that needed for the preservation of the market society, must lead to malinvestment. > [[Human Action - Mises (HA)]] 394,550-65, 576,580-86; [[Theory of Money and Credit (M.)]] 314-18, 357-66; also [[Understanding the Dollar Crisis (PLG.)]] 187, 198-99, 205, 249-51. ## Synopsis A malinvestment occurs as the result of investors responding to false signals from market pricing. Rising prices indicate more demand than actually exists in investors invest in products and services for which the demand does not really exist. # Body # References / Links > [!Info]- Ignore dataview >## Backlink >Ignore this dataview. Plugins don't work on the website >```dataview Table Status, type as "Type" from [[]] and !outgoing([[]]) sort file.name asc >```