Money and Banking

Recorded at Jekyll Island, Georgia; 27 February 2010.

Recorded at Jekyll Island, Georgia; 26 February 2010.

The governments of almost all countries are engaged in a campaign against the capitalists.

The governments of almost all countries are engaged in a campaign against the capitalists. They are intent upon expropriating them by means of taxation and monetary measures.

But unlike today, the deflationists and hard-money men had the upper hand. As a result, the depression ended rather quickly (by 1821) when confidence in currency was restored and currency once again was redeemable in specie.

The Federal Reserve was created in 1913 by Morgan men to cartelize the banking system and limit competition. This is fractional reserve banking rather than 100% reserves. Rothbard thinks it is fraud. It increases the money supply in an inflationary manner by creating money out of thin air.

The chief objective of present-day government interference is to intensify further credit expansion. This policy is doomed to failure. Sooner or later it must result in a catastrophe.

Those Americans who twice succeeded in doing away with a central bank were aware of the dangers; but they failed to see that the evils they fought

People did not conceive that what they lamented was the necessary outcome of policies directed toward a lowering of the rate of interest by means of credit expansion.

"Menger's work provided the foundation for all of the Austrian School and the bedrock for monetary theory, laying the groundwork for Mises, Hayek, and Rothbard."