How come? There was no federal reserve, for sure, and no central bank for decades. What was it then? Were there other government distortions/regulations causing the panics? What were these regulations, and how did they cause panics? Were the panics comparable to the Great Depression or the current collapse?
I have a vague notion of these things, but I need a good, thorough refresher. In particular, I am seeking resources online to read. I figured I’d get some help here, thanks.
The US in the 19th centry was supposed to be on the “Gold Standard” but at times fell off the wagon. The US un-Civil War was an example where the administration introduced the “Greenback”. The reality is that throughout the 19th century the US Government mucked around with money and most of the Panics happend after this mucking. The primary regulators at the time were states so there was not a lot of inter-state banking and banks were prohibited from getting as large as they would in the 20th century.
Understand that the ABCT says it is the artificial creation of money and credit that causes business cycles. Institutions that practice fractional reserve banking will create money from nothing. This money will signal entrepreneurs to make malinvestments and the boom will have consumers overextending themselves just like they do with central banking.
The issue that I see with current central banking is the volume of debts and the massive creation of money. This seems to be causing the frequency of business cycles to increase. Now we have a boom in government; including this current boom we have had 3 booms in less than 15 years.
Recessions are not caused by central banks, per se.
Nowhere does the ABCT suggest that a central bank must exist in order for a recession to occur.