This is a short chapter, and in it, Congressman Paul notes the strange “coincidence” that the 20th century was the century of central banking, and also a century saturated with global warfare.
In reality, as he aptly points out, central banks supply, in the most extreme cases, an endless supply of money and credit to governments so that they can wage frequent, long wars, and punt to future generations the inflation they caused.
It is a well-known fact that poor monetary policy in Germany led to World War II. After the severe reparations placed on the German nation because of their defeat in WWI, the government began printing money to such an extent that the period between 1921 and 1924 has become the classic example of hyperinflation. The instability helped fan the flames of unrest and resentment among the people, and led to the rise of Adolf Hitler in the late ’20s and early ’30s.
A few good quotes from this chapter:
Franklin Roosevelt…went even further [than Hoover] in destroying the nation’s money system. He closed the banks, made private gold ownership illegal, and dealt a massive blow to what was left of the gold standard. The New Deal did not end the Depression. Unemployment was as high before World War II as it was in 1932, and incomes and productivity had actually declined. But the Fed was more powerful than ever, standing ready to fund yet another war.
Imagine an irresponsible teenager with an unlimited line of credit. The parents, teachers, pastors, and authorities in his life are ultimately powerless to change his habits. Now imagine that teenager armed to the teeth and also immune even from the rule of law. This is what we have with a government backed by a central bank.