A History of Central Banking in Great Britain and the United States (Studies in Macroeconomic History)

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This often-cited short paper lucidly explains how commercial banks create money and central banks influence that process. It dispels many common misconceptions about money. For instance, most introductory economic textbooks say that commercial banks lend out the money that savers deposit in them. In fact banks can lend money and create corresponding deposits even without savings flowing in–in other words, banks are quite literally creating “new money” when they make a loan and a corresponding deposit. This does not mean banks can lend with abandon. There are other constraints, such as the creditworthiness of borrowers, the interest rate at which banks lend which is influenced by the central bank and regulations on lending. Consider a consumer who buys an item from a vendor using money borrowed from a bank. The bank must settle the transaction with the vendor’s bank using reserves held at the central bank. If the borrower never repays the loan, then the bank’s reserves will not be replenished, reducing its ability to lend further. The 'scam' of the money-lenders is the ability to literally create money from nothing, and then lend and accumulate interest on "credit," and then re-lend that interest for further interest, in perpetuity, that creates pervasive, worldwide debt, from the individual, to the family, to the entire state. The Hidden Origins of the Bank of England ...all great events have been distorted, most of the important causes concealed…If the history of England is ever written by one who has the knowledge and the courage, the world would be astonished. - Benjamin Disraeli, Prime Minister of Great Britain

If we are to achieve real freedom, it is imperative that monetary reform be pursued with the same vigour and intensity as was displayed towards political reform during the struggle years. But that requires understanding the complex issues of how money is created, whom it belongs to and whose interests it serves. Ugolini concludes as follows: “central banking is deeply rooted in the economic and political context in which it happens to operate, and that the evolution of the former closely depends on the evolution of the latter” (p. 271). Readers of “institutionalist” style books of central banking would have reached the same conclusions. Hopefully, this is welcome as it means that the functional and institutional approaches yield similar results but this also means that no fundamentally new insights about the evolution of central banking are generated.

So yes, it is an informative, yet contentious book to read, but well worth the time. I do not agree with everything in the book and for this reason am indulging in the rebel-rouser, Yanis Varoufakis's, books as well. However, I expected some big differences, but I only encountered remarkable agreements between two authors who never met. But I'm still digging. The ‘scam’ of the money-lenders is the ability to literally create money from nothing, and then lend and accumulate interest on “credit,” and then re-lend that interest for further interest, in perpetuity, that creates pervasive, worldwide debt, from the individual, to the family, to the entire state. Stefano Ugolini, The Evolution of Central Banking: Theory and History. London: Palgrave Macmillan, 2017. xiii + 330 pp. €135 (hardcover), ISBN: 978-1-137-48524-3.

This work provides not only a broad sweep of the history of economics over almost two millennia, but insights into how the problems of usury have been confounding and enslaving mankind since its civilized existence first began.This book is bound to be controversial and engender strong reactions. Why would a seemingly arid subject matter such as the history of central banking and of the monetary system give rise to such strong reactions?

The Great Depression of the 21st Century Appendix I Appendix II An Analysis by Matthew Johnson Bibliography Foreword Both authors mention that no meetings are ever transcribed or recorded, no agendas and no minutes are taken in the board rooms and meetings of the top banking sector. Both had years of experience in this matter. Both are straight shooters.Money Creation in the Modern Economy. By Michael McLeay, Amar Radia and Ryland Thomas of the Bank’s Monetary Analysis Directorate. Bank of England Quarterly Bulletin. Q1, 2014.

Financial stability. While early central banks helped fund the government’s debt, they were also private entities that engaged in banking activities. Because they held the deposits of other banks they came to serve as a banker’s bank, facilitating transactions between banks. They became the repository for most banks in the banking system because of their large reserves and extensive networks of correspondent banks. These factors eventually allowed them to become a lender of last resort in the face of a banking panic. A later wave of central banks, e.g., the Federal Reserve in 1913 and the Swiss National Bank in 1907, were founded explicitly to provide financial stability. I do not have the expertise to say whether Goodson’s findings are accurate, but I do know that the raw nerves he touches are on account of central banking and the monetary system created thereunder being at the core of the persistent profound and inhumane differences in wealth distribution within any given country, and among countries. For this reason, for several years, my Party and I have argued that South Africa should reform its central banking and monetary system, even if that means placing our country out of step with iniquitous world standards.Up to 300BC there was an unsurpassed increase in public and private wealth of the Romans. This may be measured in the gain in land. After the conclusion of the Second Latin War in 338BC and the defeat of the Etruscans, the Roman Republic increased in size from 2,135 square miles (5,525 sq km) to 10,350 square miles (26,805 sq km) or 20% of peninsular Italy. In tandem with the expansion of its land area the population rose from about 750,000 to one million with 150,000 persons living in Rome itself. The first money used in Rome was the cow. This was not true money, but a barter system. Many early peoples used cattle as a medium of exchange. According to the legend of Herakles and the Augean stables, the cattle kept there, over 3,000 in number, represented the treasury of King Augeas. THE COPPER AGE (753 – 267BC) The solution is simple and self-evident. If we wish to obtain our liberation and sovereignty from the enslavement imposed by the private bankers, we must dismantle their fractional reserve system of banking and supporting central banks, or we ourselves shall be destroyed and consigned to oblivion. It also provides a record, both ancient and modern, of societies and civilizations that have flourished in an environment free from the burden of usury. The author offered the economic history behind the murders of Julius Caesar, Napoleon, Muammar Qaddafi (Real spelling Mu’ammar Muhammed al-Qathafi as the author provides it), JFK, and United States Congressman Louis T. McFadden after delivering a speech (fully included in the book) on the floor of Congress in which he exposed the Federal Reserve System in 1932. The cultural and material progress of a civilization will often relate to the degree by which it is free from the influence of debt, and the degradation that results when the money-lenders are permitted to abuse their power. Hence, Goodson shows that both World Wars, the Napoleonic wars, the American Revolution, the rise and fall of Julius Caesar, the regicide of Charles I of England, the overthrow of Gaddafi in Libya and the revolution against Tsar Nicholas, among much else in history relate to this “Hidden Hand”.