Thank you very much for your fast response, I am through “The origins of the Fed” now and it is clear to me now how the central bank influences the whole business cycle through the manipulation of the interest rate. But I still don’t really get the role of the individual “private” banks, especially from a historical point of view. I mean sure they borrow cheap from the Fed and expand the money supply through the system of fractional reserves. But is that the only reason why they could get so powerful? How could the governments become so dependent on those banks? Are their any papers or books which focus more on the development of the “private” banks?
Thanks in adcance for your help and I promise I won’t bother you anymore ;-)!
Greedings from Europe.
