History

A sequence of posts about the history of Central Banking -- Currently a haphazard collection. Material needs to be organized into a textbook or organized lesson plan for course. Collection of related materials on Main Page for Money.

1. The Origins of Central Banking (1/5): Creation of Bank of England in 1690's to finance War against France

2. Monetization, Maturity Transformation, and MMT: Theoretical Aspects of BoE operations: different between perceptions and reality of banking operations.

3. Central Banks and Financing of Wars: 18th Century - 1690 to1814 This needs more work --  Some readings are listed on this page

4. The Hundred Years Peace: Karl Polanyi's account of Peace in Europe, and War (Colonization) on the World

5. Missing: More Material on 19th Century Finance - Investment in the Colonies, Railroads, etc.  What were banks doing during the hundred years of peace.

6. Central Bank History (2/5) 1814-1914 Hundred Years Peace: This post describes evolution of function of Central Banks. Central Banks learn about their responsibilities, instead of competing with smaller banks.

7. The Great Transformation of Economic Theory: How the transition from war finance to investment in colonies, and inter-Europe trade instead of war, affected the development of economic theory in the 19th century.

8. The Vital Importance of Understanding Global Financial Architecture: Discusses the emergence of the gold standard in the 19th Century, going up to its breakdown as a result of World War 1.

9. Monetary Policy from 1914-1980 - Somewhat expanded version, with a bit more detail, of next post (CBH 3/5 100 Yrs Peace). Natural Breakpoint is 1971 and Nixon Shock. THis should be adopted in subsequent writeup  -- TO ADD: Ellen Brown on Paul Volcker's Long Shadow - How Volcker fought inflation created by oil price rises by jacking up the interest rates, breaking the backs of working class and creating a template for a misconceived monetary policy for the 80's and beyond. Links to books on Nixon Shock and the Petro-Dollar, which cemented the oil-dollar relationship, of crucial importance in floating era post Nixon Shock.  Reference to Oil, Power, and War: A Dark History by  Matthieu Auzanneau 

10. Central Bank History (3/5) WW1 to Nixon Shock (should be the coverage). Condensed and edited version of previous post on Monetary Policy from 1914-1980.

11. Global Financial Architecture Part II:  The fate of the gold standard in the post WW2 period. How attempts to restore gold failed, despite strenuous efforts. The Bretton Woods agreement and beyond to Nixon Shock.

12. Understanding International Finance: A simplified and shortened version, for general public, of rise and fall of Gold Standard, covered in Global Financial Architecture Parts I and II. 

13. The Battle for the Control of Money: A broad perspective on how the power to create money is of central importance, and how the battle for public versus private control of this power has been wage. DISINFORMATION has always been the key to control of this power.

14. Fear of Floating: How the Nixon Shock of 1971 naturally led to floating exchange rates. Even though dollar was nominally pegged to gold, this was enough to create fixed exchange rates in pre-1971

15. The History of Money: A brief overviews of highlights of changes over 20th Century for general public

16. On the Nature of Modern Money: The harms of present banking system, and also of Islamic efforts to adapt this system to the Shari'a requirements. Rather,  a DIFFERENT system needs to be created.

17. An Islamic Version of the Iceland Plan for Monetary Reform: There are TWO problems with modern monetary systems - INTEREST and MONEY CREATION - Muslims have focused on the first, while secular Western economists have focused on the second. BOTH must be reformed to create genuinely Islamic alternatives to modern system of fractional reserve banking which is the raison d'etre for Central Banks.

18. Post Nixon-Shock to invention of Inflation Targeting in New Zealand. Reddell, Michael. "Origins and early development of the inflation target." Reserve Bank of New Zealand Bulletin 62.3 (1999): 63-71.  For a long summary, see Reddell on this site. A shorter summary, which also explains monetarist bias of Reddell is under preparation

19. History of Central Banks: Battle of Three Centuries = The Economist Article TEMPORARY LINK