I read in Rothbard’s America’s Great Depression (which I just finished) that depressions can only be caused by central banking and fractional reserve banking distorting economic calculation for businesses. While I’m inclined to agree with this theory, I am wondering what caused the Panic of 1907, wh…

Fractional reserve banking distorting economic calculation for businesses? What’s the Fed have to do with it, they just act to sync the different bank’s inflationary activities under a cartel. It isn’t neccessary to have a central bank for the banks to inflate the money supply.

A bunch of large banks colluded to call in loans and shrink the money supply. This forced smaller banks into bankruptcy. They then used this panic as justification to create the Federal Reserve. A fractional reserve bank is technically insolvent at any given time, if all customers simultaneously d…

Nice. Did you watch that David Icke video I posted in your comments?

I just watched the bits on the Compound Interest Paradox. That was 2 hours long! I prefer written resources, because I can read faster than someone can talk in a video.

Fair enough. I think it was actually 3 hours long. I try to listen to podcasts during the day, and watch video at the end of the day when my focus has wandered. I listen to Lew Rockwell’s new podcast when I make my morning coffee run.

A bunch of large banks colluded to call in loans and shrink the money supply. This forced smaller banks into bankruptcy. They then used this panic as justification to create the Federal Reserve. A fractional reserve bank is technically insolvent at any given time, if all customers simultaneously d…

On banking, you absolutely want to read these three books (see link). [image] Overview/Explanation of American Economic History from a Free Market/Austrian perspective History Wow, can’t believe I missed this and it only got one response. Rothbard was a great…

I’ve already read America’s Great Depression, and I understood the role the Fed played in creating that disaster. I have not read the other two books yet, so that is why I was wondering how a depression could have occured without a central bank artificially setting low interest rates and maintainin…

In the late 19th century, the Supreme Court legalized limited liability incorporation. Limited liability corporation encourages dishonest behavior by a nearly insolvent bank, because their liability is limited. Suppose a bank has $100M in assets and $99M in liabilities. Without limited liability in…

I would like to add that the depression of 1819 was caused by the federal government temporarily allowing banks to refuse redemption on deposits in specie. Any protection of fractional reserve banking can cause a business cycle. central banking and fiat currency are simply interventions designed to …

Panic of 1907

Economics Economics Questions

liberty_student July 25, 2008, 12:24pm 8

On banking, you absolutely want to read these three books (see link).

They are all available for free, online courtesy of the Mises Institute.

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Panic of 1907

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