Why again do we need a Federal Reserve or other central banks?

It would look like a positive feedback loop, running away until it crashed spectacularly in a panic that introduced a depression.

How do I know? Because we already ran the experiment. Look at the panics and depressions of the 1800s. They are your answer.

We created central banks for a reason. We really didn't like the way it worked out without them.

The so-called "free market" isn't really free. It's dominated by the biggest players, who do their best to manipulate it for their own self-interest. In order to have an economy that is broadly beneficial for the greatest number of citizens, regulation is absolutely necessary. And even then, market manipulation and unequal distribution of wealth is still a real problem.

Stefan Eich has recently published a book on precisely this topic.

https://press.princeton.edu/books/hardcover/9780691191072/th...