Banking Panics In The Past—That Was The Government
The post Banking Panics In The Past—That Was The Government appeared on BitcoinEthereumNews.com. Cortelyou shuffled that paper in a not-so-efficient way (Photo by Heritage Art/Heritage Images via … More Getty Images) Heritage Images via Getty Images We need the Federal Reserve because before we had it, the private banking system had panics all the time. Goodness gracious to we hear this justification for the Fed without surcease. We go over this theme in our new book, Free Money: Bitcoin and the American Monetary Tradition, because the government will not let us not do it. Federal websites to this very day—I’ll spare you the URL’s; they are in the book—say things like federal banking regulation pre and post the Fed strengthened and stabilized the American banking system, and by virtue of that, the economy. In Free Money, we tested the proposition. We found it wanting in every case. Here’s a paradigmatic one, to reinforce a column I wrote on this topic several months ago. There was a big bad banking panic in 1907. It was the one that resulted in the Fed. Everybody went so berserk over this panic that out came the Fed in 1913, and we have had this banking supervisor-in-chief ever since. What was this panic and what caused it? In the fall of 1907, banks throughout the country depleted their reserves as brokers cashed on their accounts to ship the farm harvest—an annual ritual that had been going on for eons—and by October, banks were starting to not pay up to depositors and trim their hours and shut their doors and have managers throw themselves out the window. J.P. Morgan lent some people some money at a profit and the whole thing passed. What caused the panic of 1907? Why capitalism, of course. Right. Wow has our historical consciousness been misled on this one. In Free Money, we followed the…
The post Banking Panics In The Past—That Was The Government appeared on BitcoinEthereumNews.com.
Cortelyou shuffled that paper in a not-so-efficient way (Photo by Heritage Art/Heritage Images via … More Getty Images) Heritage Images via Getty Images We need the Federal Reserve because before we had it, the private banking system had panics all the time. Goodness gracious to we hear this justification for the Fed without surcease. We go over this theme in our new book, Free Money: Bitcoin and the American Monetary Tradition, because the government will not let us not do it. Federal websites to this very day—I’ll spare you the URL’s; they are in the book—say things like federal banking regulation pre and post the Fed strengthened and stabilized the American banking system, and by virtue of that, the economy. In Free Money, we tested the proposition. We found it wanting in every case. Here’s a paradigmatic one, to reinforce a column I wrote on this topic several months ago. There was a big bad banking panic in 1907. It was the one that resulted in the Fed. Everybody went so berserk over this panic that out came the Fed in 1913, and we have had this banking supervisor-in-chief ever since. What was this panic and what caused it? In the fall of 1907, banks throughout the country depleted their reserves as brokers cashed on their accounts to ship the farm harvest—an annual ritual that had been going on for eons—and by October, banks were starting to not pay up to depositors and trim their hours and shut their doors and have managers throw themselves out the window. J.P. Morgan lent some people some money at a profit and the whole thing passed. What caused the panic of 1907? Why capitalism, of course. Right. Wow has our historical consciousness been misled on this one. In Free Money, we followed the…
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