Link of the Month: Rothbard's The Mystery of Banking

Question: If you deposit a dollar in your local bank, how much of it can the bank lend out? 30 cents? 75 cents? No. The bank can lend out approximately $10. In fact, banks essentially print money. (And so can you, just by writing a check; the difference is banks need but ten cents in the till for every dollar they draft.) The late George Ball, after spending a career in law and diplomacy, retired back to Wall Street; once there a few years, he is reported to have said, "How come no one ever told me about banking before?"

Unfortunately, primers on this fascinating system are almost as dull as the bankers themselves. From the Ludiwg von Mises Institute comes this lucid, if conservative and hard-money biased, out-of-print monograph. You'll need Adobe Acrobat to read it.

If you can get by his obsession with returning to the good old days of Grover Cleveland and the gold standard, "Rothbard's Complaint" will not only tell you everything you wanted to know about banking, it will entertain you at the same time (as long as you consume it in small bites). You'll never look at Alan Greenspan or your local bank in the same way again.

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