It should now be crystal clear what the attitude of commercial banks is and almost always will be toward the Central Bank in their country. The Central Bank is their support, their staff and shield against the winds of competition and of people trying to obtain money which they believe to be their own property waiting in the banks' vaults. The Central Bank crucially bolsters the confidence of the gulled public in the banks and deters runs upon them.
BooksFebruary 8, 2011Murray N. RothbardThe Fed did not originate as a policy response to national need. It was founded by two groups of elites: government officials and large financial and banking interests.
BooksMay 27, 2009Elgin GrosecloseGroseclose shows that at no time in its history has the Fed actually achieved what it promised: low inflation, economic stability, stable growth, reliable regulation of the banking system.
JournalsJuly 6, 2007Benjamin AndersonThe present glut in the money markets, with excessively cheap money and its attendant evils and dangers to the credit structure of the country, is due to the concurrence of three main causes.
By the 1890s, the leading Wall Street bankers were becoming increasingly disgruntled with their own creation, the National Banking System. In the first place, while the banking system was partially centralized under their leadership, it was not centralized enough. Above all, there was no revered Central Bank to bail out the commercial banks when they got into trouble, to serve as a “lender of last resort,” The big bankers couched their complaint in terms of “inelasticity,” The money supply, they grumbled, wasn't “elastic” enough.
The Civil War wrought an even more momentous change in the nation’s banking system than had the War of 1812. The early years of the war were financed by printing paper money—greenbacks—and the massive printing of money by the Treasury led to a universal suspension of specie payments by the Treasury itself and by the nation’s banks, at the end of December 1861. For the next two decades, the United States was once again on a depreciating inconvertible fiat standard.
I. STABILIZATION OF THE PURCHASING POWER OF THE MONETARY UNIT AND ELIMINATION OF THE TRADE CYCLE
1. Currency School’s Contribution
“Stabilization” of the purchasing power of the monetary unit would also lead, at the same time, to the ideal of an economy without any changes. In the stationary economy there would be no “ups” and “downs” of business. Then, the sequence of events would flow smoothly and steadily. Then, no unforeseen event would interrupt the provisioning of goods.
Where did this thing called the Fed come from? Murray Rothbard has the answer here -- in phenomenal detail that will make your head spin. In one extended essay, one that reads like a detective story, he has put together the most comprehensive and fascinating account based on a century's...
At the price determined in an unhampered market all those who consider it satisfactory can sell and all those who are prepared to pay it can buy. if commodities remain unsold, this is not due to their "unsalability" but to speculation on the part of their owners; they hold out because they expect that they will be able to sell later at a higher price.
The Federal Reserve seems determined to deny the role they and President Bush has played in creating the hugh U.S. current account deficit. First it was Ben Bernanke who tried to blame it on a "global...