Money and Banks

Patrick Newman covers Jekyll Island, the National Citizens’ League organized as a front to manufacture grass-roots support, and the pivot once Congress refused the Aldrich plan.

Patrick Newman traces the National Banking System from Salmon P. Chase’s wartime bond sales and initially hostile relations with New York financiers through the pyramid of bankers’ balances that concentrated reserves on Wall Street.

As the Federal Reserve desperately tries to force down interest rates of long-term US bonds, we should remember that the only way for those rates to effectively drop is for American savers to lower their time preferences.

Monetary authorities are wanting to remove currency and coin from the economy altogether and just have electronic transfers. That would be a mistake that would damage the free market.

The war could not have been financed under the old gold standard.

Manufacturers can choose the free market. Bankers rarely do.

Despite claims that the Federal Reserve System is a “stabilizing” force in the US economy, the truth is that the Fed is and has been the main engine of inflation for more than a century.

In a recent interview with The Economist, Elon Musk boldly contended that “money won’t matter in 2036.” He doesn’t understand money’s role.

Mainstream economists believe that central banks can “control” inflation, which they believe actually boosts the economy. The only thing inflation boosts is more inflation.

Mainstream economists tend to think of cash balances as the heart of new savings. Actually, real savings involves much more than that.