From 1728, this quote on the relationship between banks and government might sound familiar.

Richard Cantillon’s “Essay on the Nature of Trade in General” will resonate with you. He was one of the first guys to make a bunch of money in a bubble. Here’s what he said about the relationship between banks and government. Sound at all familiar?

“It is then certain that a bank, in concert with a minister, is able to increase and support the price of public stock and to lower the state’s rate of interest with the consent of this minister, when these operations are discreetly managed and in this way free the state of its debts. But these refinements, which open the door to making great fortunes, are rarely managed for the sole benefit of the state, and those who operate them are often corrupted. The excessive banknotes that are created and issued on these occasions do not disturb the circulation because, as they are employed for the purchase and sale of capital stock, they are not used for household expenditure and they are not converted into silver. But if some fear or unforeseen accident drove the holders to demand silver at the bank, the comb would explode, and it would be seen that these are dangerous operations.”

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