Henderson is always good to read. He wrote his for the same reason I wrot mine. The term “market fundamentalism” is a term of derision, as though enlightened people only worship the god of government.

Thanks for the link.

The Federal Reserve Bank is one of the many heads of the hydra of monetary manipulation by government. The artificial manipulation of interest rates and inflationary credit expansion is the real cause of the bubbles and busts. Yes, there were bubbles and busts before the fed, but there were also fractional reserve banks and effective means of political manipulation before then.

In the 1870’s, there was a severe bust, but it was preceded by a huge inflationary bubble. Instead of the Fed causing the problems then, the 1860’s had the centralized and inflationary national banking system, and Jay Cooke and Company with a monopoly over the issuance of federal bonds, which he did in spades. Then as today, the government benefited from destructive inflationary credit, while it hurt all ordinary citizens that don’t get their hands in the till.

British Parliament in the late 17th century let William Paterson use The Bank of England to buy government bonds with money created out of thin air, just as the present fed does. It created massive inflation, just as the current Fed does. It precipitated the South Sea bubble just as the current fed precipitated the real estate bubble, the dot com bubble, those in the 1980’s, the 1960’s. The bubble of the 1920’s precipitated the depression of the 1930’s. While it was severe, what made the 30’s depression into the Great Depression was the incredibly stupid policies of Hoover and FDR, the same stupid policies our present government is pursuing, both the previous and current administrations.

When there were booms and busts throughout modern history, there was also inflationary credit from money made from nothing, from central banking and/or fractional reserve banking. The fractional reserve banking system magnifies and systematizes it. So in reality, the fed is obviously not the cause of all booms and busts throughout history, but it and the current banking system is the present manifestation of the same phenomenon.