While everyone should get a copy of Ron Paul’s “End the Fed,” to be available on September 16 but can be preordered now, there is another great book by Murray Rothbard called “The Case Against the Fed,” where anyone wanting to discover the history of the Federal Reserve and the real motivations behind creating it by some of the major bankers of that time, can delve into the highly readable book and have their eyes opened to the extraordinary events and personalities involved with it, and more importantly, what the terrible effects of its creation has brought about.
At the beginning of the book Rothbard deals with the biggest weakness in our present banking system: fractional reserve banking. He talks about and exposes how the banking system would collapse if there were runs on the bank because reserves are so low in contrast to the money floating around and being used in the economy.
When you hear about increasing reserves in the financial media, this is what it’s talking about: banks having more money in reserve to fight off circumstances like we’re in today, where the taxpayers have to bail out the banks which can’t meet their commitments.
The other major point made by Rothbard is in reference to inflation, which he asserts is caused solely by the Federal Reserve. If Americans and others around the world ever really understand the causes and devastation of inflation, it would incite a revolution in the financial industry, and one that would help sweep away the dross of the Federal Reserve and its fruit of inflation. Anyway, Rothbard hits it hard to show the reality of that powerful dynamic and how we need to fight against it.
Source link: http://archive.mises.org/10612/american-banking-news-reviews-rothbard/