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RE: The Mathematics of Fractional Reserve Banking

in #mathematics8 years ago (edited)

As a side note, this has been going on for about 100 years.

The very first time this happened (at least in the US) was 7 years before the federal reserve existed. Almost 100 years to the day before the start of the housing crisis.

The first time it happened was called "the panic of 1907" or the knickerbocker crisis and it was by far the most interesting and dramatic iteration of the cycle... I don't have a list with me, but theres a few good books on it that ill post later. The wikipedia entry for it isn't terrible either. The panic of '07 is why we created the fed in the first place.

the early 20th century was pretty much awesome in every way. If you think economics is dry, but you want to learn the basics of it, the economic history of the early part of this century is the place to go.

As a further sidenote: JP Morgan is the hero of this particular story (though i think his bank is shitty now)

He pretty much singlehandedly stopped the US from becoming a third world nation. The financial system was falling apart, and he basically stepped up and said "im going to be the LOLR", 7 years before there was a federal reserve.