The ultimate purpose of this book is to give the reader a solid grasp of how money works in today’s world. Yet before diving into the particulars of central banks, repo markets, and LIBOR—all topics that will be covered in future chapters—we should first provide a general framework giving the basic theory or “economic logic” of money and banking.

I would like to thank Bill McKivor (of The Copper Corner) for his permission to reproduce photos of privately-minted coins and tokens, as well as his generous time in advising me on the topic. George Selgin introduced me to Mr. McKivor and provided guidance on the mechanics of the US gold standard. Joe Salerno also provided numerous recommendations of readings on the gold standard’s theory and history. Finally, I would like to thank Scott Sumner for helpful feedback on an initial draft of my critique of Market Monetarism.

The purpose of this short book is to provide the intelligent layperson a concise yet comprehensive overview of the theory, history, and practice of money and banking, with a focus on the United States. Although the author (Murphy) considers himself an Austrian school economist, most of the material in this book is a neutral presentation of historical facts and an objective description of the mechanics of money creation in today’s world.