Thursday, 31 October 2013

The Inherent Contradiction in Central Banking

It is impossible to ignore the contradiction inherent in the institution of the central bank, which was theoretically created to curb monetary expansion, maintain economic stability and prevent crises, but which in practice is devoted to providing new liquidity on a massive scale when banks face crises and panics.

Jesús Huerta de Soto (Money, Bank Credit and Economic Cycles, 3rd ed)

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