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The Mystery of Banking Hardcover – September 10, 2008


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Product Details

  • Hardcover: 298 pages
  • Publisher: Ludwig von Mises Institute; 2nd edition (September 10, 2008)
  • Language: English
  • ISBN-10: 1933550287
  • ISBN-13: 978-1933550282
  • Product Dimensions: 9.3 x 6.2 x 0.8 inches
  • Shipping Weight: 1.1 pounds (View shipping rates and policies)
  • Average Customer Review: 4.3 out of 5 stars  See all reviews (36 customer reviews)
  • Amazon Best Sellers Rank: #291,188 in Books (See Top 100 in Books)

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Customer Reviews

It can easily seem like Rothbard wrote this book just a few weeks ago.
Erez Davidi
If you really want to understand the mystery of how money is created, what inflation is, and how the modern banking system evolved, you will not be disappointed.
Samuelson
A great explanation of the history of banking and the monetary system as well as the economy.
THS

Most Helpful Customer Reviews

83 of 84 people found the following review helpful By Jeff on December 28, 2002
Format: Hardcover
I just finished reading this book and found that it filled in many inconsistencies that I have noted in my mainstream economic study. The author explains clearly and concisely the origins of and money and its importance to any economic system. He proceeds to describe the evolution of banking to its current inflationary state. He clearly shows that this inflationary states results from a combination of fractional reserve banking, the government's grant of monopoly powers through a cental bank (the U.S. Federal Reserve in the case of the U.S.), and the central banks open market operations to manipulate bank reserves (e.g., monetizing debt). Finally, Rothbard makes it clear that the banking industry's inflationary policies are beneficial to the banking industry itself and leave the reader no doubt that this industry has a vested interest in the status-quo.
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67 of 68 people found the following review helpful By A Customer on August 12, 2001
Format: Hardcover
I found this book to be the most interesting and revealing book I have ever read about the banking system and the Federal Reserve. Rothbard has a very different perspective than most conventional economists, but his explanations are very clear and compelling. He explains how fractional reserve banking makes banks inherently prone to bankruptcy, how the Federal Reserve and other central banks create inflation, and how money has evolved and been debased. Gene Epstein, the Barron's columnist, recently recommended The Mystery of Banking as the best book to read for anyone interested in understanding how our banking system works.
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38 of 39 people found the following review helpful By Michael Tozer on April 12, 2006
Format: Hardcover
Murray Rothbard writes clearly and yet with a technician's precise knowledge of the operation of money and banking. This book should be read by any who truly desire to understand these important aspects of the ecoonomy. And, oh, by the way, you don't really have to fork over $98 bucks for this important book. Resourceful readers can locate it for free online. Who says there's no such thing as a free lunch?
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25 of 25 people found the following review helpful By Scott E. Regener on October 13, 2008
Format: Hardcover
The first 100 pages of this book read like a review of standard Austrian theory on things like price theory when it comes to money. I've read better explanations from Ludwig von Mises. However, beginning with the chapter on Loan Banking, Rothbard's work comes into its own, demystifying modern banking. If you ever wondered why there is a business cycle or how bank runs work, this is the book for you. Unlike most modern writers, his book builds upon itself - it is all one long argument with each chapter depending on the one before to establish its arguments. Skimming is not recommended.

The serious flaw deals with free banking, his ideal model. In the main text, he provides Scotland in the early 1800s as his only real-world example. Then, in an appendix, he admits that he was duped by poor research and that the Scottish system was not free after all. Fine and good, but he does not then provide a better example to prove his hypothesis. One is left to assume that free banking has either never been tried (quite likely) or never worked in the way his theories suggest.

This book is especially timely with the recent financial issues facing the US.
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23 of 23 people found the following review helpful By Amazon Customer on January 14, 2010
Format: Hardcover
You can read this book as a pdf at [...] Just Google: Mystery of Banking. Very informative and enlightening book.
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15 of 15 people found the following review helpful By DAA on October 10, 2008
Format: Hardcover
In a brilliant and interesting manner, Murray starts off with some basic economic science concepts, which he then proceeds into explaining the theory of operation behind this monster that is now revealing itself to all of us in great confusion. This book was written in the early 80's and I bet anyone who had read this book back then is not surprised by the current financial crisis.
Some of the main questions he explores are: What is money? What is the money supply and how much of it do we really need? How do modern commercial banks work? What is the purpose of the central bank and how does it operate? And how did all of this evolve into the current system that we have today, which itself was only possible with the power of government. Murray also explains the nature of the business cycle(boom and bust), and how the business cycle is a direct result of the inherent nature of the banking system, and not the result of free markets or capitalism like everyone assumes. Murray filters out all of the financial and economic jargon used in the media that only confuse the wide public, as well as many economists themselves.
I think most readers will be shocked to learn how a modern bank works and will immediately feel the urge and need to spread the information to others. I think many bankers themselves will be shocked to learn how the broad theory of operation itself is actually hidden from the common bank employee. In the context of the current financial turmoil, the reader will immediately grasp the vast ignorance among the public, politicians, and many so called experts. This is simply a must read for the ordinary person, the banker, as well for the professional economist.
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22 of 24 people found the following review helpful By Samuelson on December 3, 2009
Format: Hardcover
I have to say, this is a gem of a book, even if it does come from the Ludwig von Mises Institute. I would normally give publications from this stable a very wide berth, and there are indeed numerous gratuitous sideswipes at various liberal policies in the book. However, if you can bite your tongue and roll with the punches what you get is more than worth it. If you really want to understand the mystery of how money is created, what inflation is, and how the modern banking system evolved, you will not be disappointed. Rothbard's basic objective is to do a hatchet job on fractional reserve banking and fiat money, and by God, he almost pulls it off. My only quibble is that although his critique is indeed devastating he never really explains the other side of the argument. Yes, Governments routinely (as a matter of policy) debase the currency by insisting that the money supply grows more quickly than the quantity of goods and services. Yes, banking is a scandalous oligopoly which makes extraordinary profits by creating and lending newly created money at interest (they win twice, once through being protected from competition and insolvency and twice by being the first to benefit from newly created money before its inflationary effects have cascaded through the economy). Nevertheless, many would argue that in spite of its inflationary effects fractional reserve banking still makes sense, as the creation of money results in greater economic activity (ie. increases in the money supply lead to the production of more goods and services because it creates new incentives where they would otherwise be lacking). So, the argument goes, the residual inflationary impact is a price worth paying for the resulting increase in economic value.Read more ›
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