From the byzantine assortment of evil federal government agencies, if you were to ask me to single out the most appalling, the most menacing, the most sinister of them all - the one political cornerstone of the welfare state against which all defenders of freedom and individual rights should press their activist energy - I would answer that it is the one upon which all the others depend, i.e., its financier. I would say it is the one that is not a federal government agency at all, but instead designed to exist in perpetual legal limbo in order to offer its leaders the full power of the leviathan federal apparatus while simultaneously shielding it from public scrutiny. I would say that It is the one that serves its master, not through a conspicuous, petty kind of thievery, but by levying a mysterious and almost unknowable tax - inflation - a tax so insidious that some brilliant minds regard it not as a parasitic malady to be razed as an economic matter of life and death but as a benefit - an elixir able to "stimulate" the economy while conjuring the confiscation of wealth out of thin air. Of course, I would single out the Federal Reserve.
"Give me control of a nation's money, and I care not who makes its laws" was said to be a maxim of the House of Rothschild. This statement captures a fundamental truth, that a nation's money is woven into the fabric of society, touching every facet of an individual's life. In a sense, its history is the history of virtually everything. The soundness of money in a society is in a sense a barometer - a barometer not only of the nation's economic health, but necessarily, its political and philosophical health.
The history and theory of central banking has been chronicled in excruciating detail. Yet, fully appreciating the nature and role of central banking in your life and in the life of the nation's economic system does not necessarily require a technical treatise or even expert knowledge. It takes integration - the integration of knowledge from many different specialized fields along with an ability to distill essential principles in such a way that a lay audience can fully appreciate the scope and importance of this institution on their daily lives and what it means for the future of civilization itself.
To fully appreciate the destructive potential of the Federal Reserve, one needs to understand something about the history and nature of money and banking. What is money? What role does a bank play in a free market economy? Historically, how and why has government policy resulted in the monetary framework we have today? How are the actions of the Federal Reserve today going to affect the future? And, what can be done about it?
I hope to take on some of these questions in forthcoming posts to go along with previous posts on the subject. I'm even considering setting up a separate blog only about this topic, but not sure. Stay tuned. In the meantime, here is an index to a three part series I did on the boom-bust cycle. I never completed part 4, but instead decided to open this up as a continuing series.
Part 1 - Today's crisis as an instance of the classic inflation-depression or boom-bust cycle
Part 2 - Positivism, empiricism and the self-induced myopia of the economics profession
Part 3 - Brief review and analysis of 19th century monetary history; gold the hero, government the villain