Every major economic downturn of the last 110 years bears the mark of the Federal Reserve. In fact, as long as the Fed has been around, it has swung the economy between inflation and recession. Yet Americans, surprisingly, have tolerated it.
But we shouldn’t expect that to go on forever. We had three central banks before the Fed and confined each to the ash heap of history. The problems inherent to central banking are cause to scrap the Fed as well.
Central banking dates to 1694, when the Bank of England was founded for the purpose of creating the hidden tax of inflation to provide cheap money to government—above all, for Britain’s many foreign wars. In exchange, the central bankers were paid well with interest.
Like any government-favored bank, the Bank of England lent money it didn’t have, lending far more than the silver in its vaults. The British government endorsed this fraud because the king and Parliament wanted the money.
Hellbound and Down 