Abstract
This introductory chapter provides a background of central banks. A century ago, when the Federal Reserve System was first established in the United States, central banks based their own creation of money and credit on their holdings of gold. These two institutional practices—central banking, and the use of gold as monetary reserves—were the bases of the world's first truly globalized credit system. This global system was originally centered in London, with the Bank of England at the center of the center. Today, the actions of central banks continue to move economies, perhaps even more than they did a century ago. Gold-backed currencies are a thing of the past, but central banks nonetheless remain the biggest owners of gold, while gold markets seem to have an ongoing monetary significance.
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