| Title | : | The Case Against the Fed |
| Author | : | |
| Rating | : | |
| ISBN | : | 094546617X |
| ISBN-10 | : | 9780945466178 |
| Language | : | English |
| Format Type | : | Paperback |
| Number of Pages | : | 158 |
| Publication | : | First published January 1, 1994 |
The Case Against the Fed Reviews
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This is the best starting point for anyone who wishes to understand the problems with debt-based central banking. Given the economic turmoil over the past year, I suspect this book would garner more attention, as it should.
Rothbard deftly illustrates the dangers of fractional reserve lending, which is the primary source of a bank's income on its deposits (which it is not allowed to count as revenue). The Federal Reserve rules the roost in the banking world, and sadly it is not a reserve, has never been audited, and is one of the most corrupt entities in the American government.
Rothbard gives a brief history of the Fed, and then shows the reader how it prints money, distributes this money, creates inflation, which in turn hurts investors and people who wish to retain savings.
If you want to understand the current economic problems in America, take it from one of the foremost experts in the Austrian school of economics. -
An excellent and highly accessible analysis of central banking in the United States. The Federal Reserve is a regressive, redistributive institution responsible for a number of catastrophic boom/bust cycles. It has also made possible the devaluation of our currency and an adventuristic foreign policy - the full scope of that calamity is difficult to fathom. Rothbard makes a persuasive case for the abolishment the organization and a return to commodity-backed currency (gold would be his commodity of choice). Great book.
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Ever since the creation of the Federal Reserve, the U.S. taxpayers have been hostages to the banking cartel.
This book simply explains how the Feds cause the cycle of boom and busts, and how they profit from it. It explains how inflation and fractional reserve banking works, also to their benifit at the expense of the taxpayer.
In summary the book expains how the Morgans and Rockerfellers have a monopoly on counterfieting the U.S. dollar with the "full faith and credit of the U.S. Government".
This book, though written in 1994, helps one understand what is going on in todays "economic crisis". -
I think it helped that I've done some reading on the federal reserve before I read this, but Murray Rothbard is one of the most clear and relatable writers on this subject, without skimping on intelligence (because I'm still often completely lost.)
Understanding how the fed operates and affects our lives should be one of the most crucial points in economic and political analysis, and this seems to me to be one of the most important books on the fed. -
The Case Against the Fed exposes the Federal Reserve System as the most secretive and fraudulent federal agency that is accountable to nobody where it is not even subject to budgets or audits nor Congressional Oversight. Basically, it has complete immunity from any transgressions because the banks have convinced the government and the public to grant the Federal Reserve full monopolistic and absolute power over the monetary system without any accountability.
The Federal Reserve System engages in fraud by counterfeiting through the process known as fractional reserve banking; banks commit fraud by inversely pyramiding deposits by lending more than what is in reserves. In the process, fractional reserve banking expands the money supply, for the result is consequently the boom and bust cycle.
Over the history of central banking, counterfeiting money has proven to be tricky because it is impossible without monopolization, for the only method to control money is to eliminate free market restrictions on fractional reserve banking. America has had four central banking systems, and each system was incrementally designed to monopolize money. Free market restrictions prevent commercial banks from inflating the currency by issuing pseudo banknotes. Commercial banks can’t inflate universally without the assistance of a central bank acting as the lender of last resort, so when the public realizes the banks’ insolvency, the central bank bails them out.
Rothbard explains how bankers, academics, politicians, and businessmen hoodwinked the American public through widespread propaganda tactics to convince them that the only way to fix the run on banks was fractional reserve banking with a central bank even though the apparent cure was already the problem.
The existence of the FDIC is rather an amusing notion because how can fractional reserve banking possibly be insurable considering all banks are inherently insolvent; besides no business can be properly insured because insurance is managing risk from uncontrollable events whereas business has controllable events yet impossible to manage risk of the marketplace.
Overall, Murray Rothbard is undeniably and irrefutably an economic genius along with being a brilliant author. The Case Against the Fed is more geared towards novice readers of economics, yet every time I indulge in a book with Rothbard’s name on it, it is always enjoyable no matter what. -
Diante das atuais discussões, em todo mundo, sobre a ação dos bancos centrais em relação a aceleração da desvalorização das moedas, a mortal inflação, The case against the fed é uma obra de leitura mais do que obrigatória. Apesar do livro, como o título deixa claro, tratar das origens e funcionamento do banco central americano, ele serve também como uma reflexão geral sobre a ação e a justificação da existência dessa instituição.
Uma coisa que Rothbard deixa clara é que Bancos Centrais são instituições contra civilizatórias, isto é, eles não surgem como um desenvolvimento natural da sociedade, mas são impostos pelos governos para que banqueiros se protejam contra as crises criadas por sua própria atividade de expansão do crédito sem lastro. Dessa forma, não se trata de um desenvolvimento natural da sociedade, mas de um obstáculo para a correção dos excessos dos banqueiros. Ou melhor, uma proteção para os banqueiros contra a sociedade. Nas palavras de Jesús Huerta de Soto, em seu livro, Moeda, Crédito Bancário e Ciclos Econômicos:
“O banco central, longe de ser um resultado espontâneo de cooperação social, surge de forma inevitável quando a atividade bancária privada se baseia em um coeficiente de reserva fracionário, uma vez que os próprios banqueiros privados acabam por reclamar a criação de um emprestador de última instância nas situações de crise e recessão econômica geradas ciclicamente por tal sistema.”
Devemos nos perguntar, portanto, a quem o Banco Central protege afinal. Sabemos que a moeda não é, posto que uma de suas metas declaradas é a desvalorização controlada da mesma, a infame meta de inflação. Bancos Centrais protegem única e somente banqueiros contra a insolvência inerente de um sistema baseado em reservas fracionárias, que nada mais é, nas palavras de Rothbard, “um sistema de falsificação legalizada”. Bancos Centrais se constituem, dessa forma, numa espécie de emprestadores de última instância a fim de manter a solvência do sistema as custas da diminuição do valor das unidades monetárias, isto é, através da expansão monetária - ou melhor, do empobrecimento progressivo da sociedade para benefício do setor bancário e, claro, do próprio Estado, já que esse é o maior tomador de empréstimos da sociedade.
Um ponto interessante apontado logo no início do livro diz respeito a crença de que um banco central independente garante estabilidade ao setor financeiro. Na verdade, uma suposta independência do Banco Central apenas torna ainda menos sujeito a correções e responsabilização por seus malfeitos, já que não responderia por seus atos mais nem indiretamente por pressão política, nem diretamente, já que não possui acionistas. Se um banco central controlados por políticos já é ruim, um controlado livremente por banqueiros que não podem ser responsabilizados por seus atos é ainda pior.
Porém, nos dois casos, a suposta independência do Banco Central será sempre ilusória, posto que uma de suas funções é o financiamento do próprio estado.
A ideia de que o banco central protege os interesses da sociedade contra a ganância dos banqueiros não passa de uma crença destituída de qualquer evidencia. Na verdade, o sistema bancário é naturalmente inclinado a cartelização, uma vez que além dos depósitos originais, os bancos também podem aumentar suas reservas fracionárias por meio dos próprios empréstimos concedidos com esses depósitos. Isso acontece quando o empréstimo não é levantado pelo tomador, permanecendo em sua conta corrente no banco, funcionando, na prática, para o banqueiro como uma forma contável de expandir ainda mais a concessão de crédito. Isso também acontece quando o tomador do crédito paga um cliente que deposita o dinheiro no mesmo banco do pagador. Por esse motivo, o setor bancário sempre faz pressão para que o governo garanta monopólios ou cartelização, sendo um dos setores econômicos mais avesso a livre concorrência.
Isso porque o sistema de reservas fracionárias implica a necessidade dos agentes bancários coordenarem entre si a taxa de expansão de crédito para que os bancos menos expansivos não subtraiam os recursos dos mais expansivos. Bancos centrais podem supervisionar e controlar a expansão do crédito. Os perigos de uma expansão creditícia não coordenada é que aqueles bancos mais agressivos, que expandem o crédito mais volumosamente, tendem a perder suas reservas para os bancos menos expansionistas. Essa redistribuição de reservas é algo muito perigoso caso os bancos não pratiquem suas expansões coordenadamente, ao mesmo tempo. Se o banco A expandir artificialmente o crédito de maneira mais rápida que o banco B, os meios fiduciários criados pelo banco A irão parar nas contas dos clientes do banco B. Estes clientes poderão resolver sacar esse dinheiro, o que obrigaria o banco B a restituí-los em ouro. Sendo assim, o banco B, por sua vez, apresentará esses meios fiduciários para o banco A, exigindo o ouro deste, fazendo-o perder reservas. Porém, se ambos os bancos expandirem o crédito no mesmo ritmo, seus clientes irão apresentar a mesma quantidade de meios fiduciários para a restituição em ouro. Suas reivindicações mútuas cancelarão umas às outras. A expansão do crédito irá reduzir as reservas de ouro em relação aos depósitos criados, é fato, mas os bancos não irão perder ouro para seus concorrentes. Por outro lado, não houvesse essa expansão coordenada, haveria o risco de perdas de reservas e uma subsequente falta de liquidez. Para fazer esta coordenação, os bancos podem formar um cartel — porém, sempre haverá o risco de que um banco possa quebrar o acordo e sair do cartel, ameaçando assim o colapso de todos os outros. A solução para esse problema é a introdução de um Banco Central que possa coordenar a expansão do crédito.
Portanto, o Banco Central garante que o sistema bancário sempre aja contra o interesse dos usuários da moeda do país em benefício dos banqueiros, os quais, por sua vez, retornam o favor ao governo, permitindo ao estado expandir sua dívida impunemente e repassar para o pagador de impostos a conta.
Dessa forma quanto menor o número de bancos concorrente, mais fácil é coordenar o ritmo de expansão do crédito. Se, por outro lado, houver milhares de bancos concorrendo entre si, o coordenação da expansão do crédito se torna muito difícil e o esquema de cartelização muito frágil.
E ainda há que se pergunte porque o setor bancário é tão fechado no nosso país, para que o governo se financie as custas do povo é necessário que o banco central limite a concorrência bancária. Simples assim.
Não é a toa que se iniciou nos últimos anos uma corrida para a implementação do CBDC (moeda digital de banco central). A criação do CBDC dará controle total da moeda aos bancos centrais, posto que não haverá mais como retirar a liquidez do sistema bancário por meio de saques em espécie, fazendo com que todo a movimentação monetária da sociedade se transforme em movimentação bancária, o que, por sua vez, garantirá ao governo o poder de inflacionamento ilimitado da base monetária, sem a necessidade de fazer concessões ao setor bancário. O cartel bancário está em vias de ser substituído pelo monopólio total dos bancos centrais, e a subtração de qualquer resquício da quase nenhuma liberdade financeira que ainda nos resta. -
Murray Rothbard cuts through the popular dogma our government expects us to sheepishly buy into. Rothbard showcases his ability to present the facts in a way a layperson can understand it in lieu of the technical jargon and higher mathematics of the professional economist. This books covers the creation of money and with it, its subjective value based on acceptance by the masses. He shows a stark comparison of gold and other forms of "money" as it was adopted by other countries and civilizations and how specifically gold had become the standard of many societies.
Rothbard explains the detrimental effects of the "Federal" "Reserve" and the affects it has on our economy. He also breaks down the creation of the "Fed" and the perpetrators of this deplorable organization. This is an excellent book for any layperson who is interested in understanding money's creation, fractional reserve banking, and the role the "Federal" "Reserve" plays in our economy. It is not a long book but is replete with great information and insight.
I was never "into" economics or really government insofar as I voted and toed the party line. However after stumbling on to Dr. Ron Paul and listening to his message, I realized that the "Fed" and the economics of this country play a paramount role in how we "behave" as a country. I have read some other authors recommended by Dr. Paul, Hayek, Mises, etc and this is my first step into Rothbard's work. I plan to continue to read his work since I enjoyed this one so much. -
The most important thing I learned in this book is that the private ownership of the Federal Reserve is not the most interesting part of its sneakiness. It is the control and power which the Federal Reserve can exert by expanding and contracting credit at will - totally unregulated, that makes it so pernicious. The issuance of high-powered money (money at stage 1 of the inflation process) to the Fed's friends and families makes it terribly powerful.
One more interesting tidbit was the fact that Marriner Eccles (a latter-day saint) was part of the Rockefeller-led ousting in 1930s of the Morgan family who had principle control over the Fed initially. He also served as Chairman of the Fed from 1934 - 1948. Hm. -
Besides Ron Paul's similar stance on the issue, there is not many other books out there that present such a full, convincing, and scathing case against the Federal Reserve being the central bank in the U.S. and the undue influence it has over the economy, markets, and the actions people take on a daily basis.
The benevolence of the Fed is quickly laid 6 feet under and you will be caught thinking about the dollars you hold in your hand every time you go to the store. If you are interested in the markets, economy, money, or what the future has in store for the U.S. dollar, this is an absolute must read. -
the first half of the book is very pertinent to our current economic situation and the second half exposes the in-bed-ness of industry and central banking.
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Excellent. Just wish it covered the whole New Deal too, not jsut the beginnning few years!
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The book starts off strong with a clear description of the genesis of money starting from barter and money-commodities, the mechanism of monetary inflation via the money multiplier effect embedded in fractional-reserve banking, the concept of bank reserves etc. The author presents credit expansion as legalized counterfeiting which dilutes the value of previous money and redistributes wealth to the new owners. He compares banking to warehousing of other goods, fungible or infungible, to argue that money multiplication in the form of credit is embezzlement. He lampoons the notion that central bankers are "inflation hawks" when they are the ones creating price inflation via monetary inflation. He does so in very clear terms and it's hard not to agree with him or at least understand his perspective.
He then covers the events that led to the creation of the Federal Reserve system, spending most of the time writing about events before it, not after. Unfortunately, this section of the book contains a lot of name dropping of little meaning, while staying light on the details and effects.
At one point, the author introduces the idea of cartelization of each industry by their leading players, with the central bank being the cartel coordinator for banking. He compares this to similar regulations in other industries, including the Meat Inspection Act in meat processing. He frames it as the leading industry players intentionally lobbying the government for introduction of additional regulation which would make it more difficult for smaller companies to compete due to additional costs. Seeing the author frame the Meat Inspection Act, which actually raised the meat processing standards in the US and was overall a very desirable introduction, as this very elaborate con made me realize that the author is very one-sided and that he won't present both the pros and cons of the Fed and central banking in a balanced way.
The book covers the events leading to the creation of the Fed well (albeit one-sidedly), but is very skimp on the post-creation events, especially how the Fed fared through the Great Depression, the Bretton Woods era and the official ending of the gold standard in 1971.
To end the book, the author suggests simply liquidating the Fed and returning to the gold standard for commercial banking, as a precursor to the more ambitious goal of total abolishment of fractional-reserve banking in general. Here again, he does not go into great detail into what the effects of this reform could be.
All in all, a short, clearly-written book with great explanation of basic monetary concepts, but suffering from great bias and a lack of detail. -
Rothbard starts by giving a history lesson on the origins of the Fed. Powerful banking elite in the US ,many connected by business and intermarriage , decided the country needed a central bank. After decades of political manoeuvres a central powerful bank called the Fed Reserve was created and passed into law late Dec 1913.
It was given the power to create money it was independent of government interference and it was controlled by a cabal of wealthy businessmen and banking families.
A move slowly away from the gold standard was a long time in planning with its final stage in 1973 after this date money is backed by faith in the Fed and government alone .
Rothbard teaches us about the basics of fractional lending and how it can be used to increase or decrease money supply. Depending on the banks deposit requirements , it decides how much a bank can lend say 1 to 5 or 1 to 20. The higher amount inducing inflation. Raising a banks requirements tightens market liquidity.
The Fed is able to write itself a cheque then buy bonds on market and park this created money in the commercial banking sector .
This allows banks to lend out new money using the fractional lending principal .
Rothbard suggests abolishing the Fed and moving back to the gold standard so as to remove the boom and bust cycles he says the Fed creates by increasing or reducing money supply by buying or selling bonds. Of course interest rates are also controlled by the Fed. Gold should be revalued up to reflect the debt the Fed holds .
An interesting read that all should do. -
Informative even if this book is old. The first 50 pages or so explain fractional banking, then you get the history of how the fed came to be, and why and by that point you see the pros and cons. Worth a read in my opinion. It’s short too. I’ll probably check out one of his more recent books on the subject for his latest take on things.
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A must read book to understand the reason d’être of the Fed and how it operates and has been operating for almost a century. Important wake up call to distrust financial institutions and to carefully plan investment and wealth management decisions.
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Rothbard does a good job of laying out a case for why the Federal reserve is the great enabler of the 'state'. Unfortunately, many people will reject this as libertarian nonsense without giving it a chance.
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Good. Some of it was too dense for me, but overall I agree. I'm not sure how practical it is to actually get rid of the Federal Reserve. That would be so painful that I think it's more likely that the Federal Reserve will implode on its own.
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Paranoid nonsense, but I promised I'd read it to expand my "scope of thinking" - a gold bug's wet dream.
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Half of the book is raw (the history part)
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Information all Americans should know about the history of the Federal Reserve System and what it actually does.
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Not the most detailed book but it does give novices in monetary economics basic information on how the Federal Reserve and the entire banking system is run on a deck of cards.
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The Mises Institute hosts this book as
PDF and
audio.
The first half of the book is a great introduction to how fractional reserve banking works and why it sucks.
Unfortunately, the later half is devoted to a dry and biased account of the history of the debate on central banking in the US and its culmination in the creation of the Federal Reserve. In it, the public are stupid, there are no legitimate arguments for central banking, and the tiny subset of pro-fed lobbyists are either rich banking tycoons or their lackeys. Rothbard often basis such claims on such rock-solid evidence as being married to the cousin of a guy who once dated the daughter of the president of a bank once owned by J.P. Morgan. (some slight hyperbole, but you get my drift) Ultimately, the layers upon layers of innuendo are meaningless in the context of the supposed thesis of the book since the advocacy of Morgan, Rockefeller, et al says nothing about the utility of the central banking system. At least the last three chapters return from the conspiracy abyss to provide some useful insight into the FDIC.
If the book ended at page 70 I'd rate it four stars. Alas, it gets three stars. If you pick this one up, don't bother with pages 70-134. -
I'm sure this was a very informative, but it was also extremely dry. Even though I haven't read something this boring, since my Palestinian Hamas textbook in my senior polsci research class, I was going to prove I could finish it. I didn't finish it since I have a newborn, and Kim wanted to pick it up. I didn't start reading it until it had been in my house for about a month. I read 3/4 of it in about a week before I ran out of time. It seemed to contradict the documentary, The Money Masters on some points. I wonder which one has more facts straight, or if they are both sort of right in their interpretations. Maybe they weren't in contraction on some points, I just was reading the book wrong, or maybe its been too long since I watched the movie. If I was going to suggest one, I would suggest the documentary, The Money Masters it was better at adding drama. The Fed is a scary organization so I would think it would be easy to add drama to written piece as well. Maybe I'm sounding stupid and naive by writing all this, but the book was one of the driest text books I have ever read. Although it was informative.
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I read The Case Against the Fed, as it was selected as Book of the Month for February 2012 by people participating in
http://freedombookclub.com
I don't really like the Star rating system. The book itself is pretty good, and provides a lot of background on the creation of the FED, the major players, the Morgans vs. the Rockafellers and that sort of thing is quite interesting. Also, the liquidation of the FED that is proposed as a prescriptive action is also quite illuminating.
I disagree with Rothbard that the United States should be on the gold standard. I think that every individual should aspire to the highest standard possible, and strive to achieve that standard. For some that is gold, others, platinum, palladium, or copper, silver, or a cryptography based standard like bitcoin. Isn't it the austrian school that teaches us that value is subjective? Then why is Rothbard's prescription so narrow in scope?
I'm kind of burnt out on this topic, personally. Last year I read 3 books on monetary theory and history. I'll post a more substantive review when I get time.
