Monetary-gold

This book first written in the early 1980's by the honorable Congressman from Texas and Lewis Lehrman discusses the feasibility of bringing back the gold standard. Moreover, Paul makes the case for the gold standard and the case for abolishing the Federal Reserve, which has to its credit: a Great Depression, bloated government growth, skyrocketing public and private debt, stagnating economic growth, and an inflationary boom in the 1970's.

Amidst, rampant inflation of the 1970's, a skyrocketing deficit... Things didn't look so good and a number of business and political leaders seriously enterained and supported the idea of reverting back to the gold standard. Sooner or later the financial institutions and fiat money cartel will abuse its power of the press and inflate us into another depression. Perhaps then instead of migrating to a world bank and currency structure, we will kill the fiat money machine once and for all.

Lastly consider these words: "Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues... A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government spending under a gold standard is severely limited.... In the absence of a gold standard, there is no way to protect savings from confiscation through inflation.... This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this insidious process..." Moreover, the author also makes it known that the gold standard wouldn't have the prolonged economic distortions and vicious boom-and-bust cycles that fiat money systems have. Who was the author? None other than Alan Greenspan in an essay called Gold and Economic Freedom. When Greenspan, the Federal Reserve Chief, is face-to-face with Ron Paul... in the back of his head, he knows Paul is right and that the central bank is wrong!

A technical analysis (written by a Phd in Economics) of a pure gold standard. Well written and very convincing.

Eichengreen and Flandreau put together a tour-de-force through the most intriguing meanders of the gold standard, a monetary system governing world trade and payments from 1870 to World War II. From the simple and powerful analysis of Hume in the eighteenth century, the book features many contributions from the most influential architects of the system. Keynes, Nurkse and Triffin speak from its pages. Also, contemporary leading economists, with the perspective that only history provides, analyze it in hindsight. A must have for the economic historian and the monetary economist.

Barry Eichengreen's book Gold Fetters is a classic on the Gold Standard and the Great Depression. The cover of this one claims that it will become a classic on the international monetary system. While it's good, it certainly isn't a classic. It's a great book, but spoilt by its lack of breadth.

Globalizing Capital is full of details and gives readers a terrific account of how mainstream exchange rates were managed (or weren't) in the period from 1870 to 1997. Each of the four main chapters is self contained (1870-1914, 1918-1944, 1944-1973, 1973-1997).

Globalizing Capital has two broad threads. Firstly, the only periods in recent history when exchange rates have been stable have occurred when there have been a) high levels of international co-operation or b) periods when governments have been able to choose between high capital mobility and extending democracy. Trying to court both the masses and international traders has often been the trigger for banking and currency crises.

The second theme is the choice between fixed and floating regimes. The world nowadays is characterised by instantaneous communications and highly mobile capital. Small countries can chose to float and large groups with deep interlinks can form monetary unions, but the rest are faced with increasingly unpleasant choices. As capital becomes more mobile, the choices faced by those left in the middle will become even more perilous.

While the theoretical line is flawless, the content isn't. Globalizing Capital is extremely G7-centred and gives little if any indication that there was a world outside the North Atlantic until Japan emerged in the 1960s. There is little mention of the history of colonial currency boards prior to Hong Kong in the early 1980s, no attempt to tackle the issues thrown up by recent debt crises in Latin America and nothing on transition countries in Eastern Europe and Asia who dispensed with central planning and multiple exchange rates in the 1990s.

This book is not for the casual reader. However, we do recommend it strongly to anyone interested in understanding the relationship between global politics and international economics. Our consulting staff uses it often when discussing pricing policies and long-range financial planning with experienced and sophisticated exporters. John R. Jagoe, Director, Export Institute.

Globalizing Capital: A History of the International Monetary System is better described by its subtitle than its title, but even that fails to suggest just how up-to-the-minute it is. This book really provides a crucial key for unlocking the puzzles of today's global financial crisis. It tells the whole story of how the gold standard worked, how the Bretton Woods system worked -- and why and how they stopped working. If you wonder what the differences between floating and fixed exchange rates really are, this book will tell you, in all dimensions. It shows very clearly that the international financial crisis we see today is a great deal like what has happened at some times in the past, and it explains what worked, what didn't, and why in the past in dealing with similar crises. The author's entirely non-ideological -- where there are two intellectually-respectable sides to an issue, he presents both, explains why he comes down as he does, and tells you where to look for more information. The book is brief (about 200 pages), well and clearly written, and doesn't assume that you know much about economics or banking. There's a nice glossary in the back which explains all those mysterious terms you hear about these days. I understand that the new paperback edition has been updated to carry the story right up through the Asia crisis.

W. D. O'Neil

This is a collection of Bordo's scholarly work on the Gold Standard. It's mostly academic in style and contains quite a lot which will be beyond the generalist reader. Also, there is little here that will be new for those who know the topic well.

What I did like was the introductary chapters which describe how the system worked at different times and also how differently its workings were percived amongst central figures at the time. I found this very useful since most texts would have you believe that the system was a smooth functioning and uniform entity. It obviously wasn't. Thank you MB for this valuable insight.

I used the book, particularly Eichengreen's chapter on modern perspectives, for a scholarly article I am writing. My field is speech communication rather than economics, and it seemed like a reasonably coherent book to me.

While Peter Bernstein is an engaging writer, his perspective on gold and silver is in many ways quite superficial. The subtitle of the book - "The History of an Obsession" - betrays his real agenda, which is to subtley pooh-pooh gold's historic monetary role as being the result of a kind of psychological disorder. Bernstein's anti-precious metals bias becomes especially apparent in his discussion of the monetary history of Asia and in his discussion of the world-wide abandonment of the gold standard in the 20th Century.

From reading the Asian chapter, one would scarcely realize that much of Asia was effectively on a silver standard for hundreds of years, and that at least in China this situation was brought about because of repeated failures of paper money experiments. Asians learned through bitter experience that a natural commodity whose stock is beyond the control of politicians is essential for preserving purchasing power in the face of social upheavals.

Likewise, Bernstein's tale of the alleged deflationary tendencies of gold causing the Great Depression and eventually necessitating the fiat paper money we have today is utter nonsense. For one thing, prices were very stable during the heyday of the gold standard (and throughout much of the rest of history for that matter); far from being deflationary, numerous studies have documented that the purchasing power of gold has been extraordinarily stable over many centuries.

For another thing, the instability of the post-World War I financial system was strictly a banking phenomenon; both the expansion of the money stock in the 1920's and the rapid collapse of the money stock in the early 1930's was almost entirely due to the irresponsible manner in which central banks mismanaged the creation and destruction of money substitutes, especially bank and savings accounts.

Rather than stabilize the financial system by getting rid of fractional reserves, Franklin Roosevelt and his successors have chosen instead to continually bail it out by inflationary means. The institutionalization of inflation, not any monetary defects of gold itself, is the real reason why governments tried to minimize gold's monetary role during the 20th Century.

The sad truth is that our current ruling class has a vested interest in the continual depreciation of the dollar. It also has a vested interest in risking a hyperinflationary collapse of the global economy, replicating on a world-wide scale what happened to Germany in 1923 and to many other countries throughout the thousand-year history of the paper money fetish.

It is too bad that Bernstein's readers won't learn the real lessons of monetary history from him, otherwise they might learn to trust paper less and develop a healthy "obsession" with gold too.

Having expected this book to be more about the get rich schemes or preparing for the collapse of the world economy, I found this book to be more like a world history lesson on gold instead. The book provides an interesting look at gold from a historical perspective, and how it has dominated civilizations around the world in both the past and present. Gold has, as few would doubt, stood the test of time akin to a financial Rock of Gibraltar, and this book presents why that has been so and why it will continue to be so.

Peter Bernstein has written a fascinating account of the role of gold throughout history. This book should help solidify him in the front rank of current economic writers. Starting with the physical properties of the metal which help explain its attraction to cultures around the world, Bernstein traces the evolution of the precious metal from the time of Croesus through the abandoment of the Bretton Woods system.

The book is as much a sociological study as a financial treatise and readers looking for a strictly economic argument about the merits/demerits of a gold standard should probably look elesewhere. Having worked for a money management firm who was the largest owner of gold equities in the world, I am familiar with the obsession of the true believers and they will not be satisfied with this account. But true believers aside, perhaps the most powerful argument that Bernstein makes is a question - namely, why should the pace of human economic development be controlled by the vagaries of nature and changes in extraction technology.

This book would probably make a good textbook for a college course on international financial affairs, but for someone like myself who just wanted to know what the gold standard was, this book is like pulling teeth. Mr. Eichengreen's "Golden Fetters" just goes into too much detail. By page nine of the introduction I wished I hadn't bought the book, by page 30 I was ready to donate it to the local library. If you live and breathe the stock market or international finance, this book may be for you. I'll just wait for a good documentary on the subject on television.

Barry Eichengreen's classic tale of financial hubris and mismanagement is almost ten years old. But it's still riveting. It's a broad-sweep introduction for generalists and financial buffs alike. And it's very well written too.

The book begins by describing the inner workings of the gold standard and how it evolved from its inception in the 1800s. This part may be a bit dry for generalists, but once underway all the terms become quite easy to understand. It's worth persevering since WW1changed the way the world worked. In particular, the after effects of the war made staying on gold much more difficult for countries experiencing persistent balance of payments deficits.

After that, Eichengreen goes on a tour of the interwar years and aims to show why the collapse of the gold standard and the plunge into depression had nothing to do with the US stock market and everything to do with rivalries and mismanagment on an international scale. The US crash was a symptom of an international crisis, not the cause.

All the classic powderkegs are there. The UK's mindless attempt to rejoin the gold standard at the overvalued, pre-war rate. Vindictive French domestic politics and the hyperinflations in continental Europe. Vindictive French attempts to humiliate the Germans over reparations. Bank runs in Germany and Austria. French and American attempts to bend the rules of the Gold Standard for their own national interests. Wild swings in capital flows from Europe to the US and back again. And the cataclysmic days of 1931 when the whole system collapsed under the weight of banking crises and currency contagion - in ways very similar to Asia in 1997.

After the crash, we get down to the Great Depression and who fared the best. This part is much shorter since it isn't as complicated. Basically, those countries that devalued quickly and went the free market route fared much better than those that didn't. Sweden was a star performer. The US can be found towards the back of the class. Dear old Blighty gets full marks for going solo, although more recent evidence shows this had more to do with throwing in the towel than playing with new ideas.

Strangely there's little mention of Japan. Nippon took a beating in the late 1920s while the yen remained fixed to gold. Once sterling devalued, the Japanese followed suit. The recovery was swift and full blooded. But the central bank forgot to stop the printing press once growth returned and ended up fighting hyperinflation in the late 1930s. So Eichengreen's line that giving up was the great panacea isn't quite as true as he'd have you believe.

All told, Golden Fetters is great. While it lacks facts and figures on banking problems and doesn't really provide convincing evidence on contagion, it works really well as a diary of contrasting fortunes in Europe and the US after the guns fell silent in 1918. If you like history then this is for you.

Eichengreen does it again. His easy-reading prose takes the reader through the monetary meanders of the post-WWI scenario, alternating historical narrative with clear, in-depth looks into economic theory and economic thought. The book features a comprehensive analysis of the intricacies of the interwar gold standard. The international conferences, the German hyperinflation, the roller-coaster of the Franc between 1924 and 1926 and the monetary determinants of the Great Depression are studied with extreme accuracy. This magnificient account will not disappoint either the academic reader or the learned non-specialist.