IntroductionIn recent years, there has been significant debate over the causes of America's economic woes. However, few people choose to look at the causes of past economic recessions. Some believe that it is the responsibility of the government and the central bank to steer the economy in the right direction. While others believe that it is not their job, but that of the free market. Perhaps it’s a symbiosis of government and the free market working together to get things done. Many questions need to be asked such as: What is the history of currency and banking in the United States? What has proven sustainable in terms of monetary policy and to what extent has it been beneficial or harmful due to government involvement? These are important questions for the future of the United States. In the words of John Maynard Keynes: “The ideas of economists, whether right or wrong, are more powerful than is generally thought. Indeed, the world is governed by nothing else. » (Keynes, 2008) p247 The answer to these questions can be found through research on this topic. By answering these questions, I will also be able to answer the major question: what caused booms and busts in the past and how or can we avoid them? What is the history of money and banking? Before answering the major question, the history of money and banking must be discussed. It begins with the colonial era and ends with the end of World War II. The results will help understand the bigger picture. As FA Hayek joked: “The curious task of economics is to prove to men how little they know.” » (Hayek, Fatal Conceit)Colonial Era 1607-1762The Colonial Era was a period of emerging economic development and intrusion by the British Parliament. Middle of paper......e/c477c1cf-197f-4df7-8e6f-efc425f6fac3/page/709c5245-d33f-40a9-b18f-e56667a40431.Folsom Jr., Burton. (2009). New Deal or Raw Deal? : How FDR's Legacy Damaged America. New York, NY: Threshold Editions. “National Bank Act of 1863”. Gale Encyclopedia of United States Economic History. 2000. Retrieved November 26, 2013 from: http://www.encyclopedia.com/doc/1G2-3406400620.html “First Bank of the United States – Conservapedia” Conservapedia. Accessed November 26, 2013 at: http://conservapedia.com/First_Bank_of_the_United_States. “Second Bank of the United States” History Central. Retrieved November 26, 2013 from: http://www.historycentral.com/Ant/Economics/Second.html. “Great Depression – Mises Wiki, the global repository of classical liberal thought” Mises Institute. Retrieved November 27, 2013 from: http://wiki.mises.org/wiki/Great_Depression#cite_note-Folsom_sending-55