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The Mystery of Banking

4.25 of 5 stars 4.25  ·  rating details  ·  250 ratings  ·  21 reviews
Mystery of Banking, The by Rothbard, Murray N.. 8vo.
Hardcover, 298 pages
Published September 10th 2008 by Ludwig von Mises Institute (first published November 1983)
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Justin Tapp
The Mystery of Banking by Murray N. Rothbard. Austrians have made pretty much all of their books free, which is part of why their ideas are far-reaching.

This book reads like a well-written textbook and has basically three parts:
1) A primer on supply and demand for money. (Those are parts I quoted from in my previous post).
2) An explanation of how fractional reserve banking works.
3) A history of banking in the U.K. and U.S., with some prescriptions to how an ideal Rothbardian system would work.

(I actually read this as a PDF.)

This is classic Rothbard. Well written, well within the reach of the average person, and even humorous. Like What Has Government Done to Our Money?, it's short and sweet. This one quickly covers the concept of money, then gets into how increasingly sophisticated civilization has made it a bit harder to comprehend the actual definition of money supply, and then deals with the meat of the mystery of banking: the conflating of loan banking and deposit banking. There
The Mystery of Banking exposes fractional reserve banking as a highly sophisticated ponzi scheme through practical, theoretical and historical perspectives. It is an inherently fraudulent and inflationary monetary system that is operated by a central bank granted special privilege from government decree. Money is pyramided on top of reserves where credit is arbitrarily created out of thin air and injected into the economy as if it were actual savings. The early holders of the new money benefit a ...more
Hector Combe
Probably the best analysis out there of fractional reserve banking, the public subsidies granted to private banks, and the devastating effects this has on the economy, .

Essentially, central banking exists to co-ordinate inflation amongst banks in order that natural limits on credit expansion are removed. A central bank can effectively control expansion of the monetary base via reserve requirements and creation of new base money, client commerical banks then pyramid circulating bank credit on to
Zachary Moore
A fantastic read for our current times, as yet another bank-credit bubble bursts around us. Rothbard does an excellent job explaining the technicalities of money and banking in a refreshingly readable way. I also found his narrative histories of central banking in Britain and the United States in the later chapters of the book to be immensely informative. The author's steadfast attention to the fact that the bankers and thier friends in government are the chief (and essentially the only) benefic ...more
Andrew Skretvedt
This book is an excellent primer on money, banking, and the concept of monetary systems and policy. It will take anyone with at least a vague recollection of their Econ101 and bring one quickly up to a useful, practical, and serviceable knowledge of banking systems from the perspective of the brilliantly lucid Austrian school.

This book is great, eye-opening, gobsmacking fun for anyone with the curiosity to want to learn what's happening when they deposit funds in their bank, and what's all the f
Vinh Nguyen
I'm going to copy a review of this book from my original article at

“The Mystery of Banking” by Murray N. Rothbard inclines toward the idealism of free banking, and it insists that fractional reserve banking system is the force behind perpetual boom and bust cycle of inflationary economies where banks are likely to find themselves in bankruptcy and requiring bailouts from central banks, in our case it would be the Federal Reserve. Whether you and I even c
The Mystery of Banking is a full on attack of the central banking system by Rothbard. Rothbard began with basic concepts such as supply and demand, Says law, gold standard, etc to complex ideas on demand deposit, fiat money, reserve banking etc. While attacking the fiat money, Rothbard explained the history of the finance system and examples on how different systems in the world have drastically different results. A well written book for people interested in basic econometrics.
This is a great book. I'm rating it five stars for its content and clarity. It's information that I wish that I would have understood in junior high. It's information that the vast majority of the world never learns. Alas, we are beaten over the head by it daily.

The book begins with a review of supply and demand theory written in a very approachable manor. It then proves that the amount of money in the system is irrelevant as long as its stable. The book then launches into a review of how the mo
Great book that explains fractional reserve banking and its history. It provides a solid argument for free banking and defines what "free banking" really is. Many people seem to not realize what "free banking" really is. It also points out how the modern banking system is highly inflationary and that the government keeps feeding this highly inflationary process.
Banking is boring so, unfortunately, this book about banking is a little boring at times. Still, I'm giving it 4 stars because banking is important to our civilization &, to this non-expert at least, Rothbard seems to make a lot of sense. If Rothbard's right then our financial system is designed to create bubbles & crashes, while enriching insiders -- & it doesn't have to be that way.
If you want to really understand how banking or the FED works read this book!!

Its not always so easy, lots of balance sheets to look at and some in-depth description of the history of banking regulation and laws, but I really think this book makes it as easy to understand as possible.

The author certainly has an opinion on the whole bit, but its not too preachy.
Mike Fox
This book pulls the curtain back on the entire banking industry and explains the fraudulent fractional reserve system and the inner workings of the evil federal reserve all while using double entry bookkeeping to clearly show how the system works. Essential reading to understand how bad things really are and how scary and uncertain the future is.
Dean Akin
Well written and a very informative book on how our banking system works. The first half of the book shows how our system of banking is always in a chronic state of bankruptcy and the unintended consequences it creates. The second half is a brief history of the U.S. banking system and how it simply doesn't work. Eye opening.
An excellent book about how the modern banking system works, and how it doesn't work. Rothbard traces banking theory back to the Arab invention of double entry bookkeeping and give us economic reasons as to why our current banking system is failing.
All the things this book says about how the current monetary system is flawed have actually gotten worse with time...

I'd really like to know if there's an updated version of this book.
John Boettcher
Allows anyone to understand the fallacies of the fractional reserve banking system. Written by one of the most prolific authors the Austrian School of Economics has to offer.
Very grateful for Murray's help in understanding the fraud that is banking and the hidden tax that is inflation.
Jakub Maly
Explains thoroughly the history of money, banking and schemes and principles of modern central banking.
Buku yang layak dibaca. Ia memiliki kejernihan logika, alur historis serta bergaya akademik.
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Murray Newton Rothbard was an influential American historian, natural law theorist, Aristotelian and economist of the Austrian School who helped define modern libertarianism. Rothbard took the Austrian School's emphasis on spontaneous order and condemnation of central planning to an individualist anarchist conclusion, which he termed "anarcho-capitalism".

Source: Wikipedia
More about Murray N. Rothbard...
What Has Government Done to Our Money? and The Case for the 100 Percent Gold Dollar For a New Liberty: The Libertarian Manifesto The Ethics of Liberty The Case Against the Fed Anatomy of the State

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