A Quote by Murray Rothbard
As 'Austrian' business cycle theory has pointed out, any bank credit inflation sets up conditions for boom-and-bust; there is no need for prices actually to rise.
Related Quotes
The 'boom-bust' cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.
There is no such thing as agflation. Rising commodity prices, or increases in any prices, do not cause inflation. Inflation is what causes prices to rise. Of course, in market economies, prices for individual goods and services rise and fall based on changes in supply and demand, but it is only through inflation that prices rise in aggregate.
Repeal the entire Banking Act of 1933, and Austrian School economists will cheer, especially if the current system were replaced by a 100%-reserve competitive banking with no central bank. That banking reform would give us a sound money system, meaning no more business cycle, bailouts, or inflation.
Boom and bust cycles are very difficult for businesses because you're hiring a bunch because you're planning for the future. And if the future is going to be very big, you need to hire people, or suddenly you go to boom to bust, then all of a sudden, you're kind of battening down the hatches and trying to sail, you know, through the storm, it's a different thing. So part of it is making good decisions about, well, how long is a boom cycle going to be, you know, don't plan on it going forever.
We create these boom-bust cycles by manipulating the money supply and the interest rates and directing it where it went in. And that is what happened with housing: pushed into housing combination of easy money plus all the regulations, and we created this boom-bust cycle, and corruption, because corruption goes with it, because you don't have the same discipline. So we've got to stop all that.
The 20th Century approach to economics, resource depletion and over-consumption means we boom and bust until we bust more than we boom; that is precisely what is happening. In a low growth economy, the true meaning of resource efficiency in business and in everything we do is essential
Government policies try to prevent the emergence of serious unemployment by credit expansion, i.e., inflation. The outcome was rising prices, renewed demands for higher wages and reiterated credit expansion; in short, protracted inflation.
Once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities will not cease to rise, everybody becomes eager to buy as much as possible and restrict his cash holdings to minimum size... If the credit expansion is not stopped in time, the boom turns to crack-up boom: the flight into real values begins, and the whole monetary system founders.
What people today call inflation is not inflation, i.e., the increase in the quantity of money and money substitutes, but the general rise in commodity prices and wage rates which is the inevitable consequence of inflation.
Models used to describe and predict inflation commonly distinguish between changes in food and energy prices - which enter into total inflation - and movements in the prices of other goods and services - that is, core inflation.
A crucial responsibility of any central bank is to control inflation, the average rate of increase in the prices of a broad group of goods and services.
Short cycle business are being impacted by credit, and are being impacted by gasoline prices, food, distribution businesses, chemical business.
All markets have boom and bust cycles, and I think venture capital market has even more exaggerated boom and bust cycles.
Stocks actually can be a very good hedge against inflation, and short of hyperinflation, stocks will have the ability to increase their dividends to match the rise in prices.
If global oil prices or commodity prices are high, then it is bound to create inflation. So, we should not be too worried if the inflation is created by global commodity prices. When they come down, inflation will automatically come down.
The president has very little effect on the economy. If you want to put blame or credit, the main person who influences the business cycle is the head of the Federal Reserve Bank.
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