Federal Reserve Notes, the stuff we call money, are backed by the full faith and credit of our dear leaders. That is why I call it ‘faith based’ money. The trouble comes naturally when people holding the paper lose faith. Back when money was gold and silver and banks handed out certificates as claims to the metals in the vault, a good old fashioned ‘run on the bank’ would take out the dishonest bankers and limit the damage to the crooks and their isolated victims.
Then came the ultimate (so far) banking fraud: the Federal Reserve System. This great system would be the cure to banking problems, no more economic distresses associated with ‘runs on the banks’. I’m not impressed.
Declan McCullagh has a review of Thomas Woods’ new book Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse. It looks like good reading, I’ll have to buy a copy while I can afford it.