Money and Banks

Our analysis holds that the key reason for financial instability is not the repeal of the Glass-Steagall Act as such but the existence of the central bank.

"Any individual who would live beyond his means, voting himself into a home that he cannot afford, is not a desirable neighbor for those who adhere to the concepts of private ownership and control of property."

Economics is about the most important and interesting drama of all — human action.

We can understand the reaction today to people calling to "end the Fed."

Presented by Douglas E. French at “The Failure of the Keynesian State,” the Mises Circle in Houston, sponsored by Jeremy S. Davis.

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 Sherman Act outlawed restraint of trade. The Clayton Act added to that. Anti-Trust hysteria came in the 1940-50s. Whatever you did would be considered monopolistic. The charges didn't come from consumers, they came from whining competitors.

Colonial governments tried to manipulate the Spanish peso when they couldn't control the commodity monies. They increased the supply of pesos (inflation) and encouraged exports. Prices increased until the process was banned.

The World Economic Conference of 1933 met to deal with America's Great Depression, but, without consulting anyone, FDR declared that the U.S. would not agree to the proposal because he wanted to take the U.S. off the gold standard in order to inflate the dollar.  The gold-supporting British and French were horrified; Nazi Germany was delighted.