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The 'boom-bust' cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.
Murray Rothbard
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Interpretation

What this quote means

The boom-bust cycle is a phenomenon caused by the manipulation of money supply, particularly through bank credit, leading to economic fluctuations.

Murray Rothbard's quote highlights how monetary policies, especially those involving expansion of bank credit, can create cycles of economic prosperity (boom) followed by downturns (bust). This intervention disrupts the natural market balance, leading to periods of unsustainable growth followed by corrections that can result in economic hardship.

Themes

Boom-Bust CycleMonetary InterventionBank CreditEconomicsMarket Fluctuations

In practice

Example use cases

In a discussion on economic policies, one might refer to Rothbard's quote to illustrate the dangers of excessive credit expansion.

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Ultimately, there is no entity called 'government'; there are only people forming themselves into groups called 'governments' and acting in a 'governmental' manner.
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No one may threaten or commit violence ('aggress') against another man's person or property. Violence may be employed only against the man who commits such violence; that is, only defensively against the aggressive violence of another. In short, no violence may be employed against a non-aggressor. Here is the fundamental rule from which can be deduced the entire corpus of libertarian theory.
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If government manages to establish paper tickets or bank credit as money, as equivalent to gold grams or ounces, then the government, as dominant money-supplier, becomes free to create money costlessly and at will. As a result, this 'inflation' of the money supply destroys the value of the dollar or pound, drives up prices, cripples economic calculation, and hobbles and seriously damages the workings of the market economy.
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Once one concedes that a single world government is not necessary, then where does one logically stop at the permissibility of separate states? If Canada and the United States can be separate nations without being denounced as in a state of impermissible β€˜anarchy’, why may not the South secede from the United States? New York State from the Union? New York City from the state? Why may not Manhattan secede? Each neighbourhood? Each block? Each house? Each person?
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Quote by Murray Rothbard | QuoteProject