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Is central banking inevitably deceitful, corrupt, and grafting?

Section: Daily Dispatches

10a ET Saturday, July 26, 2008

Dear Friend of GATA and Gold:

Working with GATA, you eventually discover that you're working with not just the secret knowledge of the universe -- the power of gold -- but also and just as important the largely forgotten knowledge of the ages. A powerful reminder of this can be found in an essay written five years ago for the Mises Institute in Auburn, Alabama, by one of its adjunct scholars, H.A. Scott Trask, "The Fed's Predecessors in American History."

Trask's essay is a brief history of the Second Bank of the United States, which functioned from 1817 to 1836. Trask shows how this central bank quickly resorted to market manipulation, deceit, patronage, and corruption to maintain its power and subvert democracy. Some of the methods cited by Trask are identical to those being used now by the successors of the Second Bank of the United States, the Federal Reserve and the Treasury Department.

Trask quotes the economic historian William M. Gouge as attributing the failures of the Second Bank of the United States to the very concept of central banking. "The fault is in the system," Gouge wrote. "Give the management of it to the wisest and best men in the country, and still it will produce evil."

Each day's news out of Washington and New York makes it harder to argue with those who think so.

You can find Trask's essay at the Mises Internet site here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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