You can tell it was a struggle for the author to write this book, and The Price of Time is much less interesting than it really needs to be. There's a lot of information here, certainly, but it's too much "one damn thing after another" history rather than history that's well-threaded and well-structured in a way that helps readers organize the information usefully in their minds.
This book also feels like a rewriting of Devil Take the Hindmost, Edward Chancellor's history of market crashes. The difference is that The Price of Time offers an underlying reason as it tisk-tisks its way through history's panics, bubbles and crashes: it blames them on too-low interest rates.
This is correct, of course, but the book Chancellor wrote to say so is a disappointment. It was work to read, not a pleasure, and in fact it reads as if the author himself suffered writing it, organizing it, identifying a unifying thread to hold the book together. There's a telling quote in the acknowledgments: "If I have managed to complete this book without being driven mad or, at least, hopelessly off course, it is because I have received a great deal of help from my friends."
Perhaps the author could have benefited from stepping back from this work for a few years to decide what precisely he intended to do. And then write that book, rather than this one in which he threw far too much stuff against the pages.
If you're a "civilian" (a non-finance industry) reader, you could certainly grind through this book. But you could also save dozens of hours by memorizing the phrase "setting interest rates too low is a bad thing and leads to all sorts of economic distortions." If you're a finance turbo-autist, you will find in this book everything you ever could have possibly wanted to know about interest rates, interest rate policy, and all the clown central bankers who always want to keep rates too low.
[As always, a friendly warning: DO NOT READ ANY FURTHER. These are just my personal notes copied down as I read the book. You'll be wasting your time, even if you only just skim the bold text!]
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Notes:
Introduction: The Anarchist and the Capitalist1) Debate on the legitimacy of interest between Pierre-Joseph Proudhon and Frederic Bastiat, Proudhon famously coined the phrase "property is theft." Proudhon is interesting on some level because you can't afford to forget that people actually think like this--thinking that credit should be literally free while having no comprehension of what type of system of rewards and incentives would result as the consequences of these views.
2) Proudhon had another critique of interest: that because it compounds over time thus it will grow to take over the world, eventually, or in the nearer term take over an entire economy. On one level this sounds reasonable, but note the obvious counterpoint that any equity, assets, and business ventures collateralizing this debt also grow/compound.
3) Note also that Proudhon had high-flown rhetoric but was a midwit and couldn't analyze; see also Joseph Schumpeter's comment that Proudhon’s arguments were "absurd" and "instead of inferring from this that there is something wrong with his methods, [he] infers that there must be something wrong with the object of his research."
4) Bastiat's final pamphlet "What is Seen and What is Not Seen" lamenting economists who can't see the second-order consequences of a policy or economic action but only the first-order and obvious, visible consequences; see also Henry Hazlitt further addressing Bastiat's parable of the broken window in his book Economics In One Lesson.
5) "...influencing the level of inflation is just one of several functions of interest, and possibly the least important."
Part 1: Of Historical Interest
Chapter 1: Babylonian Birth
6) The first clay tablets in the Mesopotamian region; credit transactions were commonplace during the third and second millennia BC (!); Loans are recorded on clay tablets and broken when the loan is paid off, thus the tablets we have in the archaeological record are of unpaid debts, "of which there seem to have been a great number." [Note how reading this now after having read The Breakdown of the Bicameral Mind you can't help but work in this idea of a lack of self-consciousness at this time as an explanatory hypothesis for why there only existed ledgers from this era; no literature, no poetry, no thinking at all: just lists of transactions. Note also that there's probably a contra-argument that you'd have to have self-awareness and self-consciousness in order to think about and keep your own mental record of these debts, who you owed money to who owed money to you, etc.]
7) Barley loans at 33.33%.
8) Anticretic interest: interest that can be repaid in the form of labor services performed either by the borrower, another family member or a slave.
9) Second millennium BC: we observe the first credit network; merchant bankers; even female creditors.
10) The development of the debt jubilee in Mesopotamia; then also the conceptual framework of having a jubilee every 50 years or at the beginning of every new reign of a Babylonian king; these were consumer debts only, not commercial debts; thus likely used to manage "social consequences of excessive personal debt"; see also Solon ordering the smashing of mortgage stones, "thereby releasing citizens from debt bondage."
11) Note how interest rates remained incredibly stable over very long periods during the Babylonian era as well as during ancient Greece.
12) Many of our assumptions about interest rates were not borne out by antiquity; the idea that interest rates were correlated with economic growth, that they were determined by real economic growth, even that they were driven by the money supply; interest rates declined after Alexander the Great distributed large stocks of Persian gold and silver for example; there's no strong support for any view as to what drives interest rates. In the modern fiat money era it's much easier to manipulate the interest rate than it was in ancient times.
13) Roman emperor Tiberius, AD 33: the first example of quantitative easing as Tiberius decided to lend out the imperial treasure free of interest to patrician families which halted a banking crisis. [As usual it's the wealthiest members of society who benefit!]
14) On "the myth of barter" and how it's more likely that credit predated money and the earliest forms of credit bore interest.
15) "It is notable that when the emperor Augustus flooded Rome with treasure, interest rates fell and house prices rose. Little has changed since then. Two millennia later, property markets remained sensitive to changes in the money supply and interest rates."
Chapter 2: Selling Time
16) Various historical intellectuals griping about interest: Aristotle, Plato, Saint Augustine, Shakespeare etc; but then see Sir Moses Finley: "Debt was a deliberate device on the part of the creditor to obtain more dependent labour rather than a device for enrichment through interest." [Debt as a device to keep you on the modern plantation]
17) Note that the standard (Aristotelian/Aquinian) critique of usury ignores the full suite of purposes of money; ignores the fact that money is a store of value; the exchange of a loan is a form of time value, an intertemporal transaction of value in the form of the use of someone else's money for a period of time.
18) Note Seneca's contradictory and hypocritical comments about usury when he was one of the biggest and most extractive lenders who acquired a great fortune thanks to his service under Nero. [An early cantillon insider!]
19) Increasing sophistication and accounting with double entry bookkeeping in northern Italy; various banking and letters of credit; overseas bills of exchange (which incorporated interest in a foreign exchange transaction); all of these added to the effective money supply and contributed to a decline in medieval interest rates.
20) The religious proscription against usury "was suited to a self-sufficient agrarian society, in which loans were primarily for consumption purposes. This ideal world was shattered by the extension of trade and industry throughout the Middle Ages." Even Thomas Aquinas changed his view when it came to lending at interest.
21) Interest defined as "the price of time"; "To bee a tyme seller" per Thomas Wilson, Elizabethan-era diplomat and judge, 1572. Per the author, "Interest has been described in many ways over the years--it's often referred to as the 'price of money'. But Wilson knew better. Interest he said is the price of time. There is no better definition." Also, around this time we started to see a linguistic difference between the idea of usury and interest: one being extortion of the needy, the other being a fair rate charged for the use of money.
22) Anne-Robert Jacques Turgot, 18th century French economist and statesman; made the first known reference to the idea of time preference; acknowledging that capital is sort of like a commodity or raw material used in the production or conducting business; note also however that money borrowed in order to finance consumption is by its nature "unproductive," so we need an explanation for why people would do this, hence Turgot's concept of time preference. [Predictably offered retelling here of the Stanford marshmallow experiment right here, where one can think of the "bonus" marshmallow as a type of interest]
23) Irving Fisher and his definition of interest: "human impatience crystallized into a market rate."
24) What if the prevailing rate of interest does not reflect society's time preference? This is a problem that Hayek, Mises and Schumpeter worried about: what happens when interest rates are kept below their natural level? Typically malinvestment happens or "investment returns don't justify the initial outlay."
Chapter 3: The Lowering of Interest
25) Mid 17th century England experiences the bubonic plague, the great fire of London, a loss to the Dutch fleet, and a default on England's debt thanks to Charles II's extravagances, Josiah Child recommended lowering the interest rate to help England recover, drawing from Elizabethan-era statesman Sir Francis Bacon; this was something clearly beneficial to the aristocracy as well as to commercial interests [even then the elites saw clearly that lowering interest rates would help enrich them]. The maximum rate of interest was cut from 10% to 8% and then 6% and then Josiah Child advocated for 4%, Note also Child had control of the East India company which was funded by high cost debt, thus he was talking his own book here on a bunch of levels.
26) [Quick side note here as the author quotes philosopher John Locke on the topic of interest, while noting that he "had just returned from a period of exile in Holland"... One can't help nothing today the various censoring actions happening in England (Russell Brand and Andrew Bridgen come to mind among others). It makes you wonder if history will repeat itself in the coming decades and we'll see others enjoying similar "periods of exile."]
27) John Locke noting the disadvantages of artificially lowering interest rates, there would be winners and losers, it benefits those putting out money like brokers, bankers and "scriveners"; Locke also argued that the low interest rates in Holland were not an effect of a law to lower rates but a consequence of their well-run economy; he notes also that England did very well economically during Queen Elizabeth's reign when rates were at 10%; Locke's view was that interest rates should not be regulated and they should find their own natural level.
28) The next question taken up in the 19th century was what happens if the interest rate diverges from its natural level? See Henry Thornton, writing in 1802, arguing that artificially lower interest rates create an unstable financial boom; or Swedish economist Knut Wicksell in the 1920s arguing that too low an interest rate would produce inflation, and too high a rate would produce deflation; this is still conventional wisdom today. The author argues that in reality "the natural rate of interest is unobservable, a pure abstraction." Note it's also an assumption necessary for oversimplified economic equilibrium models.
29) The author helpfully lists Locke's argument for the damage produced by artificially low interest rates:
* Financiers benefit at the expense of widows and orphans
* Wealth is redistributed from savers to borrowers
* Creditors are inadequately compensated for risk
* Bankers hoard money rather than lend it out
* Too much borrowing takes place
* Money flows abroad in search of higher returns
* Asset price inflation makes the rich richer
* You won't revive a moribund economy anyway
[This is also a Murray Rothbard type argument as well, likewise Bitcoiners will instantly understand it, and modern central bankers appear clueless about this way of thinking]
Chapter 4: The Chimera
30) [This chapter covers the John Law events in France, the first major experiment with easy money and ultra-low rates, and the boom and bust that followed, all interpreted as a historical analogy for what we're doing now.]
31) John Law, escaped from jail after being arrested after winning a duel, fled to the continent at age 23, 25 years later was appointed France's Finance Minister in 1720. Also head of the French Central Bank and founder (and in charge) of the Mississippi Company. [In the modern era this guy would be a classic ticket-taker, someone who rose up out of nowhere, without any history or credibility to anyone who really looked into his background, see for example Sam Bankman-Fried today.]
32) Note what Joseph Schumpeter said about John Law: "He worked out the economics of his projects with a brilliance and, yes, profundity, which places him in the front rank of monetary theorists of all times."; Law can be thought of as the original monetarist; "His monetary policy prescriptions form the basis for modern central banking." [Note here the author isn't talking about this guy's fraudulent Mississippi bubble, more his idea of expanding France's money supply and cutting rates.] "...the world's first experiment with easy money."
33) John Law's innovative idea that money did not have to derive its value from precious metals, it was just a yardstick of value, like a measure or a unit of account, but it didn't have intrinsic value and thus didn't need to be "backed" by gold or anything else. Also that you could establish a central bank that issued paper money collateralized with land rather than gold or silver; note that these ideas were not original to him, however, the "land bank" idea came from William Potter during Cromwell's reign in England for example.
34) Law fails to sell his plan to the English, the Scots, or even Louis XIV, but he does succeed with Louis XV. Step one was to set up a central bank, then Law took monopoly control trading rights and claims to French Louisiana, fused it with France's other trading monopolies in Senegal, East India, etc., along with the tobacco monopoly to create the Mississippi Company, and then took over France's entire national debt in exchange for an annual payment; then giving government creditors the opportunity to swap their French bonds for shares in this new Mississippi company. The Mississippi company was issued at 500 livres, traded flat for the first couple of years, but then Law started raising the money supply (since he controlled the Royal Bank and its notes were denominated in livres, note there was no limit to the amount of money that could be issued/printed). The price of the Mississippi Company then went up 20x to 10,000 livres over the course of 1719. "The French coined a new word, millionaire, to describe these lucky fellows [who invested]." Then a speculative bubble followed that happened across Europe.
35) You could buy shares with 10% down, thus the investments were leveraged; Law also did secondary offerings at programmed higher prices, $500-550-1000, then 5000 livres, etc. Law was a world class stock promoter.
36) See also the French Royal Bank's money printing excursions: sounds familiar if you've read When Money Dies by Adam Fergusson, paper manufacturers could not supply enough printing paper, also interest rates collapsed, which is interesting. The price of real and personal property went up because of inflation, but interest rates on government debt fell.
37) Note that the Mississippi Company borrowed from the government at 2% to buy its own stock back and then later was able to borrow at 0%; then the Royal Bank and the Mississippi Company were merged into a single entity.
38) February 1720: the French government bans the ownership of gold and silver as well as as well as the wearing of precious metals, diamonds and pearls; also the company was given powers to search for hoarded gold coins (!) Sounds familiar! John Law was able to do this because he used the monarch's absolute powers. He also uses this power to force people to traffic only in paper money, not unlike certain governments' efforts today (we're looking at you, Australia!) to quietly gradually, abolish physical cash...
39) On how did John Law's "System" was 'irrevocably committed' to easy money, with interest rates below their natural rate.
40) "The verdict on Law and his System provided by modern economists is surprisingly favorable. Some even deny that a bubble existed in 1719." Typical modern ivy league economists today "warmly applaud" John Law's monetary notions.
41) The author cites many similarities with the post-2008 Great Financial Crisis monetary response: printing money, keeping rates much lower than normal, and having a state buy its own national debt with newly printed money.
42) Note also Richard Cantillon's point that "when a national bank turns on the printing press and buys up government debt, the newly created money is initially trapped within the financial system where it inflates financial assets rather than consumer prices, and only slowly seeps out into the wider economy." Hence the expression the Cantillon Effect.
43) Law never admitted to the flaws of his system, while "Central bankers, who resort to printing money, manipulating interest rates and fueling asset price bubbles, exude a similar error of infallibility."
Chapter 5: John Bull Cannot Stand Two Per Cent
44) [This chapter is loosely focused around the insights of Walter Bagehot; it's a history of speculations and manias that happened in England largely because of too-low interest rates.]
45) On the development of the modern business cycle; in the early 18th century and before, cyclical downturns tended to be triggered by random events like a war or crop failures, but from the 18th century on monetary factors--specifically interest rates--tended to drive a trade cycle.
46) See Walter Bagehot, renowned editor of The Economist writing in the 19th century about how interest rates have to be raised promptly in any late stage of a boom; this is to produce deflation and and a panic so that savings can accumulate all over again; he sounds like a 19th century version of an Austrian economist.
47) See the 1825 panic in London thanks to speculation and bonds from newly independent South American countries, an inflow of gold from abroad, reducing interest rates and raising stock prices. Interest rates on English government debt fell to 3% or lower, causing investors to stampede into foreign securities, specifically high-yield bonds from Latin American republics; many of these bonds were issued in Paris to evade England's usury laws; thus this is an early example of proto-offshore regulatory arbitrage.
48) Note that Bagehot was a witty writer with clever aphorisms; see for example the quote "John Bull can stand many things, but he cannot stand two per cent." On Bagehot's intuitive understanding that people would habituate to a certain return on their investments and if that income was not available they would take more risk.
49) [I don't think the author is aware of recent research convincingly showing that the "tulipmania" in Holland didn't really happen: it was psyop from Calvinists trying to impose thrift.]
50) [Also another psyop that's kind of interesting: Bagehot wrote in his book Lombard Street about different types of stock promotions, some of which were obvious spoofs: for example an offering "For an Undertaking with shall in due time be revealed." It's fascinating (and embarrassing) that this written about in the famous history of market bubbles Extraordinary Popular Delusions and the Madness of Crowds, but that author wrote about this offering as if it was a real thing, not a parody!]
51) On the 1840s British railway mania; another fascinating (and embarrassing) factoid here: Charles McKay, the author of Extraordinary Popular Delusions and the Madness of Crowds (a book I read many years ago and still can't get its condescending smell of retrospective tisk-tisking off me)... how ironic that it turns out this author himself got sucked into the 1840s-era railway mania himself. (!!!)
52) The 1866 Overend, Gurney (aka Corner House) collapse, which caused a panic: Overend, Gurney discounted commercial bills but tied up a lot of its capital in illiquid and non-performing securities. [Good quote from the English banker John Mills at the time, "as a rule, panics do not destroy capital; they merely reveal the extent to which it has previously been destroyed..." See also Buffett's famous quote, "Only when the tide goes out do you discover who's been swimming naked."]
53) The Bagehot Rule, this began the formalizing of the central bank as "lender of last resort." He wasn't the first person to come up with this notion, that was Francis Baring in 1797.
54) Bagehot was cited repeatedly by US central bankers Tim Geithner and Ben Bernanke; but notice in the great financial crisis the US Fed loaned at low rates and kept rates artificially low for a long time afterwards: this is not consistent with Bagehot's doctrine. Worse, the gov't loan terms were not for a short period but rather for years on end as well. Note also these modern central bankers' fear and loathing at the idea of deflation which is something that did not worry Bagehot at all.
55) Note the extended mild deflation period from the 1870s to the end of the 19th century throughout the industrialized world; perhaps because of no significant gold discoveries, the expansion of global trade, large-scale immigration to the US, etc., all of these may have put downward pressure on prices and incomes as well as interest rates.
56) Walter Bagehot died at age 51 in 1877 of pneumonia. "One wonders whether any of them [meaning modern central bankers who cite him frequently, like Geithner and Bernanke] has actually opened the pages of Lombard Street and encountered its ruminations on John Bull and his wild investment proclivities."
Chapter 6: Un Petit Coup de Whisky
57) [This chapter is about the post-WWI era leading up to the 29 crash, featuring collaboration among major central bankers in Europe and the US. This story is far better told by Liaquat Ahamed in his book Lords of Finance.]
58) The famous 1927 meeting between the four key central bankers: the US, England, France and Germany, where the US cut its benchmark rate to take the pressure off England's economy, providing an accelerant to the US stock market.
59) See the prior 1907 Knickerbocker Trust collapse, which led to a panic which was "rescued" by J.P. Morgan, this was followed by the 1913 creation of the US Federal Reserve with an elastic monetary policy.
60) On the automatic and more simplistic economic "regulator" of a gold standard versus a paper or "fiat" standard, where the money supply was much more elastic; note also there was a sort of hybrid gold exchange standard after World War I where gold and government securities were considered as reserves: in this case a country could "sterilize" gold inflows by issuing governement bonds equal to the value of gold imported.
61) Note England's attempt to get back on the gold standard after World War I: this caused tremendous unemployment and required short-term interest rates as high as 7%; suddenly interest rates became political; see for example the English general strike in 1926. "Interest rates are now a political as well as a financial question" per English Central banker Montagu Norman. See also the concern about deflation which often involved cuts in wages; this all gave rise to new monetary orthodoxy of "price stability" [but if you really think about it what they really mean is some inflation and the avoidance of deflation at all costs].
62) There is also a perspective in the 1920s era that the central bank had no concern at all with stock markets or stock prices.
63) GDP growth ran around 8% per year between 1923 and 1928; in other words the economy was growing rapidly due to technology advancements (electrification, "Fordism"-style assembly line management techniques). It's actually a little hard to tell whether interest rates were high enough or not during that decade because of these exogenous drivers, but the Central Bank ran rates around 5% through most of the decade, and inflation was practically nonexistent that decade.
64) Note the tremendous scale of stock margin lending in those days: broker loans were a third of Federal Reserve member banks' loan books.
65) Note the arrogance of monetary interventionists in that era: it was believed that the Treasury had really stabilized seasonal agricultural-driven fluctuations in the economic cycle, and treasury secretary Andrew Mellon claimed during the decade "We are no longer the victims of the vagaries of business cycles." But all this did was encourage long-cycle speculative behavior, creating a larger, longer boom that would have an even more catastrophic collapse.
66) "Don't give me a low rate, give me a true rate, and then I shall know how to keep my house in order." German Central banker Hjalmar Schacht. This is a famous quote supposedly from this 1927 meeting of central bankers on Long Island (see note #58). The US Fed's decision to cut rates to help England here turned out to be a catastrophic decision in retrospect. [Interesting to see a naive mistake here from the author where he says President Coolidge "declined to intervene" when there was nothing the President could do! The Federal reserve was an independent institution that had no accountability to the executive branch.] The stock market went up 20% in response in the second half of 1927; also note that the Federal Reserve Bank of Chicago did not cut its lending rate and had to be coerced to do so.
67) Then-Fed chairman Benjamin Strong retired due to deteriorating health, and then in response to the stock market's increase the Fed raised rates from 3.5% to 5% over the course of 1928; allegedly the stock market was already a "speculative inferno" (as the author phrases it) and it was too late.
68) Interesting conversation recorded between Swiss banker Felix Somary and John Maynard Keynes in April 1928 where Keynes said, "We will not have any more crashes in our time... I think the market is very appealing, and prices are low." Wow. Interesting since Keynes had a reputation for being a savvy investor for running Cambridge's endowment.
69) Keynes later realized that he was only looking at goods inflation and failed to see both asset price inflation and an increase of the total volume of bank credit (credit inflation) as indicators of an overheated economy.
70) Discussion here on whether deflation is good or bad: it can screw up lending contracts if there's a lot of deflation; can cause wages to decline also, but if there is a greater decline in the cost of living this actually can benefit everyone; also note that wages are "stickier" than prices. Also price declines from technological improvements have shown to be very beneficial: see for example cost curves in memory, semiconductors, transmission of data, etc.
71) See also the idea of "good deflation" versus "bad deflation": bad deflation comes from overindebtedness and the crunching of liabilities after a crash; note however Hayek's conclusion that attempts to avoid good deflations only make bad deflations more likely. Also the bad deflation is a symptom not a cause of economic malaise. It's an adjustment from the malinvestments made during the speculative boom.
Part Two: How Low Rates Begot Lower Rates
Chapter 7: Goodhart's Law
72) [This is a strange chapter that starts off talking about the 1980s Japanese boom and bust and then launches into a history of modern central bankers in the United States starting with Martin, then Volcker, and ending with Greenspan. Not sure what is the thread here?]
73) Goodhart's Law: "When a measure becomes a target, its ceases to be a good measure."
74) On the general rejection of Hayek's interpretation of the 1920s boom and bust; how we now narrate economic intervention under the guise of maintaining price stability at all costs. See also the modern central banker's horror at the idea of deflation.
75) See the Japanese bubble economy that happened, beginning with taking rates to a post-war low of 2.5% after 1987.
76) Volcker "breaking the back of inflation"; he even needed a security detail after an armed intruder broke into the Federal Reserve building threatening to kill members of the Fed's open markets committee; then the author moves on to Greenspan, allegedly a radical libertarian who really turned out to be on of the most interventionist Fed chairmen ever.
77) Benanke et al blaming the housing boom/bust on a savings glut; also how these guys totally failed to see it in advance, and worse, not taking responsibility for puffing it up with lower than necessary rates. The author sure doesn't think much of team Bernanke nor of his ownership of responsibility for the housing boom/bust.
78) Adopting "inflation targeting" as explicit central bank policy, NZ was first, Bernanke also got the Fed to adopt this. 2% inflation target set by the Fed under Yellen.
79) On various tyrannies of metrics, citing the workmanlike book The Tyranny of Metrics which I happen to have reviewed here on this site. Nice quote here: "[metrics] imitate science but resemble faith."
80) See also Charles Goodhart noting that whenever the Bank of England targeted a particular measure of the money supply, that measure's relationship to inflation would break down: thus Goodhart argued "any measure used for control is unreliable."
81) Also there's no rationale or theoretical basis for choosing a 2% inflation target; prices move up and down at different rates for different things for different reasons. Also ultimately this book is going to show in Chapter 15 that in order to maintain a 2% inflation target during a period of financial stability with flat declining prices means interest rates are going to be set too low or even at negative levels, thereby encouraging speculative activity.
82) "The pursuit of inflation targets resembled a massive real-time Milgram experiment, with the world's citizenry as guinea pigs. Obsessed with their targets, technocrat central bankers were blinded to, or at least encouraged to downplay, any adverse results of their policies."
83) Note also the credibility risk that happens when a central banker clings to a target and can't seem to reach it, and as a result they get more and more vociferous about the target and more and more blind to the negative side effects.
Chapter 8: Secular Stagnation
84) Harvard economist Alvin Hansen, "known for introducing Keynesian ideas into the United States" with a new justification for ultra-low interest rates, the fear of secular stagnation due to slowing population growth, demographic headwinds, even the idea of economic maturity being a factor in long-term secular stagnation. The author argues that "Hansen's secular stagnation claim is one of the worst forecasting errors ever made by an academic economist. Its resounding failure makes it all the more curious that the idea should resurface, little changed, some eight decades later" as Larry Summers threw it out there in the years following the great financial crisis.
85) Good comeback here for anyone claiming that the era of innovation is over: basically secular stagnationists conflate what they can't conceive with that which is not possible, this phrase is borrowed from William Bernstein the finance writer.
86) Larry Summers later flip-flopped his opinion and came to the opinion that ultra-low interest rates are responsible for secular stagnation, rather than the other way around.
Chapter 9: The Raven of Basel
87) David Hume imagining what would happen if money dropped from heaven: his views anticipated Milton Friedman's comment on "helicopter money," this is echoed by central bankers who canonically assume that interest rates are determined by real factors, not by the money supply per se.
88) Bernanke and the central bank blamed low interest rates on secular stagnation when it was really the other way around.
89) The author claims here that the BIS (Bank of International Settlements) economists William White and Claudio Borio predicted the great financial crisis with a paper they wrote in 2003. [It's pathetic to think that you can "call a crash" five full years before it happens and can still be "vindicated" as the author phrases it. If you were running real money you'd be bankrupted, insane and out of a job.]
90) Borio talked about the recursiveness of the finance world; not mirroring reality but acting upon it.
91) While central banks directly control short-term rates and claim that markets, as well as savings, productivity and other real factors affect long-term rates, central banks actually "influence the expectations of bond investors" which affects long-term rates. See the textbook example of the Federal Reserve under Bernanke as it started publishing "forward guidance" on the future direction of rates.
92) Reference here to an old joke asking the way to a certain village in Ireland and being told by a local, "if I were you, I would not start from here." Here applied to getting out of the trap of having ultra low interest rates; Borio's assertion that "low rates beget lower rates."
93) On Borio not using formal models, or being mocked for not being able to "model" his work; also see Hyman Minsky who likewise was unorthodox and didn't use formal models, who also better predicted things like the great financial crisis.
94) "Over the following chapters we examine in greater detail Borio's thesis that 'low rates beget lower rates'. These chapters are arranged around the various functions of interest, namely its influence on the allocation of capital, the financing of companies, the capitalization of wealth, the level of savings, the distribution of wealth, the measurement of risk and the regulation of international capital flows."
Chapter 10: Unnatural Selection
95) On Schumpeter's concept of "creative destruction," borrowing from Darwin's theory of natural selection. Also, Schumpeter arguing that "interest rations capital."
96) See Arthur Hadley, late 19th century American economist and president of Yale, citing the interest rate as an important aspect of the natural selection of an economy, to eliminate the "industrially unfit." See how the Depression was a selection and evolutionary fitness event for the US auto industry; see also tremendous efficiencies put in place by railroads during the 1930s as well.
97) "Paradoxical as it may seem, The riches of nations can be measured by the violence of the crises which they experience." 19th century French economist Clement Juglar; an idea here to think about is the "pit stop" view of recessions: "seeing them as periods when efficiency measures are most likely to be undertaken"; also "Capitalism without bankruptcy is like Christianity without hell"--Frank Borman; see also Perry Mehrling and his quote "...a central bank that intervenes to control instability runs the risk of killing off growth by stifling the new on the way up and coddling the old on the way down."
98) See Eurozone debt prices in 2010, where one interest rate didn't fit all the Eurozone; rates that were set low for a lethargic Germany were too low for Ireland and Greece which had housing booms; see also monetary interventions where the ECB made cheap loans available to indebted countries Spain, Portugal, Italy, etc., where they could buy back their own sovereign debt (which would push down spreads) to save Europe from its debt crisis in the short run, but create different problems down the road.
99) See the so-called zombie thrifts post the USA savings and loan collapse in the early 90s: thrift institutions that stayed alive just drove out healthy competition; see also the zombie companies left after the collapse of the Japanese bubble in the 1990s; these are examples of "unnatural selection" which determine the allocation of capital, a type of Gresham's Law for companies (rather than money); in the same way post-2012 Europe was a breeding ground for a new generation of corporate zombies.
100) [I think if you game-theory this out, any given country's central bank and "establishment" has a huge interest in maintaining jobs/employment levels (or at least appearing to do so) in the short run, and not letting a loan writedowns happen such that business assets and companies go immediately into the hands of creditors. While the latter actually might be "good" for an economy and for the price level in the long run and on the second order, to be honest it looks terrible from political/PR standpoint in the short run and on the first order. Thus you should never expect government policy to favor ruthless-seeming bankruptcy, purge/cleanup-type policies; this is why you always see central banks cut rates and let companies limp along with lower rates than normal until they can earn their way out of the problem. The Hayek method of letting the collapse happen to purify everything seems too "mean" and too brutal and possibly puts even more resources in the hands of wealthy people, and does so even faster. It's like the old joke about John D. Rockefeller during the Depression saying, "I have been investing in a broad group of common stocks" but a comedian at the time retorted "that's because he's the only one with any money left!"]
101) Malinvestments in unicorn companies; James Grant said unicorns "feed on interest rates"; Theranos, WeWork, etc.
102) See also theories that this zombie phenomenon is driving subpar productivity too.
103) Weak metaphor here comparing forest fire policy with central bank policy.
Chapter 11: The Promoter's Profit
104) [Interesting--and sadly incomplete: I'd love to know more about this financial era--numbers here on negative treasury yields between 1880 and 1893 for certain maturities after a string of federal surpluses. The author says this is the first and only time that long-term interest rates turn negative prior to the 21st century. Also: doesn't this imply that the government needs to run at least some sort of debt level to prevent interest rates from getting too low? Especially if it brings about all the horrible things the author believes low interest rates do.]
105) Cheap money in the 1890s enabled the building of tremendous conglomerates: U.S. Steel and The Northern Securities Company (Edward Harriman's railroad trust) as typical examples.
106) The author makes the case, and it's a strong case, that the modern era looks a lot like the Gilded Age of the late 1800s with gigantic trust-type companies who dominate marketplaces, corporate monopoly-type enterprises and highly concentrated industries across the economy.
107) Share buybacks were made illegal during Roosevelt's New Deal era, this law was repealed in 1982. [Interesting. I didn't know this, but I'm pretty sure the author isn't technically correct here: companies could still buy back stock, they just had to do it via a tender offer, they couldn't just buy back stock in the open market like they can now.]
108) [Note that the author here doesn't really understand buybacks: he thinks about it from a financial engineering perspective only (and yes, financial engineering is a reason why some companies buy back stock). He gives an example on page 165 of a textbook example of buybacks used in the financial engineering sense. Note however, he's incorrect in claiming that short-term investors benefit from this, if anything the opposite is true--as long as the company buys its stock below intrinsic value and continues to compound value in the future. This notion is something Warren Buffett talks about all the time, but it appears to be lost on this author. The author also struggles with certain nuances of what drove buybacks after the financial crisis: note that a tremendous amount of dilutive equity was required to be issued due to the TARP program, for many many financial companies, AIG, GM, etc. The government required these fresh shares to be issued, but then the companies were allowed to buy them back once they stabilized their balance sheets. I'm pretty sure that the TARP program was the initial impetus behind most of the statistics that he's citing here.]
109) Note also this doozie. "Some firms, including Exxon and IBM, operated what were in effect Ponzi schemes by distributing more in buybacks and dividends then they earn by way of profit." [You could only say this with a straight face if you had no idea how financial statements worked and didn't know your accounting.]
110) Note the discussion of "financialized firms", the author cites the usual: General Motors, GE, AT&T, Kraft Heinz, Valeant, etc.
Chapter 12: A Big Fat Ugly Bubble
111) The author lists all kinds of bubbles post the GFC. Where was he when they were happening? Why didn't he play them and short the shit out of them, rather than tisk tisk about them in a book years later?
112) On how low rates favor technology companies and startups because there are profitability is in the distant future; the business valuation based on these hypothetical future earnings gets discounted much more when interest rates are higher. [The longer your asset's duration, the worse it sells off when rates rise.]
113) Sadly predictable non-comprehension of Bitcoin. "What [Satoshi] had unleashed was not so much a new type of money, but rather than most perfect object of speculation the world had ever seen." Note that the author footnotes Digital Gold, but clearly did not read it. He cites the 10,000 Bitcoin pizzas, noting those Bitcoin were later worth 200 million [if you're so smart to mock Lazlo for buying pizza with his Bitcoin why weren't you on the other side of his trade?]. He uses the simple fact of its rapid rise in price as evidence that it's a bubble. Also: "Bitcoins were more easily stolen than lost." These are things you would only say if you did not comprehend Bitcoin at all. Sad that none of the people he had editing or cross-checking his manuscript could help him with this part of the book.]
114) Musings from the author about what true wealth is: things that are useless in themselves or things that have value because we can use them; see John Stuart Mill and John Ruskin's opposing views; also Frederick Soddy on viewing wealth and capital to be a form of stored energy. [I really with the author had listened to a few podcasts between Robert Breedlove and Michael Saylor when Saylor talks about storing economic energy with Bitcoin.]
115) [Interesting rhetorical choice right here. "The [USA] possessed more real estate agents than farmers." (the author is speaking of the US economy becoming more and more financialized.) This one is pretty transparently unrigorous, clearly farming scales far better than real estate sales and we all know that the labor market in the USA went from mostly agricultural to a fraction of a percent working in ag as the agriculture industry migrated from horses/manual labor (at low crop yields) to efficient capital and technology use (at much higher crop yields). The idea about the increasing financialization of the US economy still stands, but this is a pitifully unrigorous way to "prove" it.]
116) Note the irony of this quote the author produces from Virgil Jordan, warning of a bubble economy in the United States... in 1948. Hey, thanks, dude for keeping me out of the greatest economy in the world for 80 years! Sure glad I missed that bubble in 19...48!
Chapter 13: Your Mother Needs to Die
117) On how low interest rates cause people to not save and consume more, also it's pointless to even bother to save when you get such a low interest rate on your savings. [Note of course that cash accumulated is also ammunition, for buying assets at good values...]
118) The author does not go into this deeply, but he does mention some economists that argue that low interest rates are contractionary, that they drag down growth, because of foregone interest that they would receive, or the fact that because interest rates are low people have to save more. Interesting: so do low interest rates do this contractionary thing, or do they do the opposite and create stock market bubbles and phony bubble economies?
119) Suddenly the author moves to existential threats to insurance companies; this is a good example of how the book bounces around without any coherency.
120) Pension liabilities, municipal defaults; the author could describe defined contribution versus defined benefit plans much better than he did here on page 197, also he could talk about the benefits of defined contribution plans, like portability as you change jobs, etc.
Chapter 14: Let Them Eat Credit
121) On financialization: when financialization outpaces economic growth it drives inequality; see the late 19th century, the 1920s, as well as the last 20 to 30 years in our current era; various statistics here on the finance world--many of which kind of fall apart if you think about them, like his example that "finance workers get an income premium"... this is true, but probably as much due to most finance jobs being in high cost of living cities, not that they are finance jobs per se.
122) This quote is a little bit embarrassing: "In 2007, more than a quarter of Harvard graduates applied for jobs on Wall Street. The Ivy Leaguers were smart enough to know where their skills would be most generously rewarded, even if their timing left something to be desired." The statistic is hilariously meaningless unless we know what percent of Harvard graduates typically apply for Wall Street across time, also the snarky quip about their timing kind of makes you wonder: doesn't this prove the exact opposite of what the author is trying to argue?
123) "..low rates begot inequality and inequality begot lower rates"...[yes, this is true, but unfortunately high rates structurally enforce inequality too, because the wealthy can just take their loose cash, invest it at higher rates and innoculate their cost structure. Both low and high rates seem to somehow enforce economic striation no matter how you look at it.]
124) On the "great compression"" a compression of inequality during the Great Depression, this did not happen after the Great Financial Crisis: per the author, we avoided a depression by keeping interest rates low which produced even more wealth inequality.
125) Various tisk-tisking examples of conspicuous consumption: expensive art auctions, property purchases in cities like New York, luxury cars, etc. I have mixed feelings about high-end real estate, it seems sort of win-win for cities who need the budget income from property taxes.
126) "The OTX Classic Car Index--which tracks a basket of blue-chip vintage cars--quadrupled between 2005 and 2018, handily outperforming the world's stock markets."
127) [Certain things this author cite are self-contradictory: for example here on page 211 he talks about how a decline an interest rates helps retirees and the older generation because it raises the value of their investments, but earlier he's repeatedly said how low interest rates harm savers and depositors, who are typically retirees and older people, thus low rates harm them because it hurts their incomes. I'm always suspicious when an author has sort of a fixed view of a phenomenon and then rotates around facts as necessary to support his argument when clearly in these two examples--if you had a sequential memory of the book--you'd recognize they are contradictory. At the end of the day it seems like whatever this author discovers, whatever facts he finds, no matter what, low interest rates are just bad. Except in certain instances when they are not bad. At the least, be forthright and cite that this is a contradiction from arguments made elsewhere in the book.]
128) On the student loan phenomenon; see Peter Turchin's expression "elite overproduction" which refers to the fact that we are producing college graduates for a labor market that is already sated with them, and the economics of college are warped now beyond recognition.
129) On how inequality experts get it all wrong: they ignore too low interest rates as a factor in inequality; some think of interest is unjust thing in the first place, but of course ironically, if there were no interest the rich would really get richer; also others would say that the Fed contributes to inequality by choking off recoveries and hiking rates whenever labor incomes start rising. Good points here.
130) Sidebar here on Thomas Piketty's famous error in his book Capital in the 21st Century. r > g where r is the return on capital and g is the rate of economic growth, and where inequality rises whenever r exceeds g. It turns out that the exact opposite happens. I never looked into Piketty's work but what I've read about it also suggests that he made some basic math errors in his work as well.
Chapter 15: The Price of Anxiety
131) See the 18th century economist and wit Ferdinando Galiani: "Those who have so much to say about the sin of usury have not ordinarily been endowed by Providence with the means for committing it."
132) See Galliano's view of anxiety of loss inducing anxiety in a lender, which is why the lender should be compensated for the use of his money, thus "the price of anxiety." On connecting the idea of interest and risk, also considering it as a type of insurance premium; also looking at a bank lender as a type of insurance company; also looking at it like selling a put option, where the lender earns a type of insurance premium but sometimes has to absorb losses if the borrower defaults. All quite interesting ways to look at lending.
133) The idea of moral hazard occurring when the price of insurance (read: the interest rate) is set too low, then financial risks are mispriced.
134) On different types of carry trades; returns can be asymmetric, with many small gains offset by sudden large losses. Also losses are black swan-like/fat-tailed. [Also you could think of banking as a type of carry trade structurally speaking]; see also the mother of all carry trades: issuing debt in order to buy back shares. [Although note that this technically isn't true either because with a carry trade you have to unwind both sides--here, you can retire the stock and no longer pay a dividend on those shares, and then later you only need to unwind the debt side by either paying it back or rolling it.]
135) Duration risk; people went long different types of debt in order to profit when interest rates went even lower; sovereigns/governments responded by offering longer and longer-term debt: Italy with a 50-year 3% loan, Ireland and Belgium with 100-year bonds, etc., also certain companies to offering 100 year bonds. Of course this crushes the bond buyer if/when interest rates go back up.
136) On liquidity: generally people will surrender some yield for greater liquidity, but when interest rates are very low "investors blithely surrender liquidity for a little extra income." This of course unwinds terribly when there's a deleveraging. See also Keynes's famous quote "there is no such thing as liquidity of investment for the community as a whole." See also the so-called "Volmageddon" event that happened in 2018 with the VIX.
137) [It's interesting to read all these comments sounding the alarms of all these risks from things that happen from 2014 to 2018, but now it's 2023 (and almost 2024) and we didn't actually have this crash that was supposedly about! to! happen!... so the question is, does it add value to cite these things when the markets are much higher five or six years later and all you did was keep people out of the market because of a crash call never actually happened?]
Chapter 16: Rusting Money
138) A useful analogy of how Newtonian physics breaks down at the speed of light; likewise economics breaks down when interest rates approach zero.
139) Bernanke kept the Fed funds rate at zero or close to zero for seven years (!) after the financial crisis, [and note that rates were not raised meaningfully until 2022 in the 2022 to 2023 rate height cycle, so really rates were extraordinarily low for thirteen years to be honest about it]; also note the number of "excuses" used to delay the return to "rate normality": the Europe sovereign debt crisis in 2010, the market selloff in 2018... [wait: the author only comes up with two excuses here? Don't forget COVID.]
140) The author is jumping back and forth here from Yellen to Bernanke to other eras as well; the only common thread here is various examples of what the Fed should have raised rates but didn't; or kept them too low, etc. The timeline/thread here is difficult to follow, this is one of the reasons this book is an unpleasant read and it's work to read it.
141) On the curse of negative rates: see the German born Argentinian businessman Silvio Gesell, his famous quote money must rest, with a weekly stamp of 5% on banknotes, like a negative interest rate or a haircut; see also Austria's 1931 experiment with rusting money; the idea here was there was a belief that hoarding money is what caused depressions and by making the money rust it forced people to use it and increase the velocity of money.
142) Weird leap here from negative interest rates to Sweden in 1656 experimenting with paper money; but then back to the Swedish central Bank in 2009 (and then Denmark in 2012) introducing negative interest rates on deposits; then Japan doing so in 2016; ironically this caused even more deflation and more money hoarding; interest really was necessary to get people to lend (read: deposit at a bank so the bank could lend) and stop hoarding, Keynes was right.
143) Note that the footnote here on page 247 repeats the same thing about brief period of negative interest rates in the 1880s; this is the type of editorial oversight that happens when you have a book with too much in it; too much "one damn thing after another."
Part Three: The Game of Marbles
Chapter 17: The Mother and Father of All Evil
144) The "dollar standard" where the US does not need to maintain foreign exchange reserves nor worry about its balance of payments: "deficits without tears" and "exorbitant privilege" etc.
145) Note also that countries that peg their currencies to the dollar are obliged to shadow American monetary policy [the author doesn't talk about this, but it's also the case that the USA "exports inflation" to these countries and there's nothing they can do about it. It's another way in which the country with reserve currency status gets a privilege and can impose suffering on the rest of the world.]
146) On international capital flows facilitated by low interest rates in the United States which finance credit booms and real estate bubbles in various countries; see Nouriel Roubini's comment about "the mother of all carry trades."
147) There's a lot of "one damn thing after another" here. The past four or five chapters could have been cut or tightened down to 10 pages or so and it would help the reading experience immeasurably.
148) Blurb here about Brazilian entrepreneur Eike Batistam owner of OGX and OSX, who went from being the eighth wealthiest man in the world with a fortune of $34 billion, to the world's least wealthy person, "a minus billionaire" when he washed through bankruptcy.
149) Somehow this author thinks that having rates too low in the United States can be blamed for other countries borrowing too many dollars. As if the fault lies in those countries borrowing too much and therefore debauching their currencies when the debts come due.
150) Interesting points about the so-called "exorbitant privilege" of the petrodollar system: the author says "America's central bank exercises power without responsibility." Famously, Nixon's Treasury Secretary John Connolly told foreign finance ministers in 1971, "the dollar is our currency, but your problem."
Chapter 18: Financial Repression with Chinese Characteristics
151) "Financial repression" a term coined by Stanford economist Ronald McKinnon in the early 1970s for when interest rates were kept below the level of inflation.
152) On centuries of financial repression in China with interest rates set too low, producing the cultural norm there that land purchase was the only way to invest.
153) How financial repression works [in China, but note the author could have also discussed how it was done in the USA in the post WWII era as well as in today's era]; discussion of savings repression, a high savings rate, but a low yield on those savings relative to inflation and GDP growth; constant bubbles and malinvestment, etc; repeating the sins of Japan in the 1980s: Japan became hostage to its export machine, interest rates were held below their natural level and cheaper lending was done on purpose to exporters; also the stock market became an avenue for Chinese investors who didn't want to lose value in bank deposits, hence an equity market bubble in China in the 2000s.
154) This chapter is one of the most boring of the book so far! Constant lists of all the various statistics that make it seem like China is crazy but when thought of in the context of China's size and gigantic population these stats don't seem so ridiculous.
155) 1980s-era backalley finance in China: small private lenders that helped finance small businesses outside of the official state-owned banking system; interest rates here were probably "actual" or "true" interest rates and they led to non-malinvestment. In 2011 the government started to crack down on this industry.
156) Capital flight out of China; the mechanisms are interesting here: casinos in Macau that would pay Hong Kong dollars after taking in bets in Yuan; fake import invoices; tourism where wealthy Chinese would hire friends to take money out of the country in a practice known as "smurfing"; also companies would acquire foreign assets as a way to launder capital, or get it out of the country.
157) On Shaw and McKinnon's theory of financial repression, enhancing the bureaucratic state's power over the people; it fosters cronyism and inequality, creates rent-seeking behavior, is funded by offering below a fair return or below normalized returns to savers, thus savers indirectly pay in form of invisible taxation.
158) A return to authoritarianism in China; Orwellian surveillance, digital currencies, etc.; discussion of this most recent trend in China. Not quite directly connected to interest rates but the author tries his best to imply the connection.
Conclusion: The New Road to Serfdom
159) Financial repression in the West: running interest rates below the level of inflation; see the post World War II era, the author claims that era lasted more than a generation and that "negative real rates provided an annual subsidy to the US government equivalent to a fifth of tax revenues." England basically did the same thing; "For financial repression to work the state needs to trap domestic savings at home." "Financial repression returned to the West after 2008."
160) On increasing centralization and control in increasingly bureaucratic states; in particular bureaucratic/non-democratic supranational organizations like the ECB. See also how some national central banks became directly involved in the stock market like the Swiss National Bank and the Bank of Japan, both of which directly bought equities; also more and more talk of central bank digital currencies that would be totally surveillable, controllable and subject to manipulation, this "would destroy the last messages of privacy."
161) Workmanlike summary of Hayek's book The Road to Serfdom here.
162) On how monetary authorities keep using interest rate policy to deal with some pressing problem, thus "expediency" was used to justify interference in markets and interest rates; but this ends up causing unintended consequences and policy consequences that were not considered or even understood; this of course "in turn justifies further interventions." [To a modern nation state bureaucrat there is nothing better than a government solution to a problem that screws things up, but then requires still more government solutions to fix it...]
163) Sidebar here on the "Iceland counterfactual": an example of a central bank that did not slash interest rates and do quantitative easing after 2008, instead they "swallowed the bitter medicine of austerity"; also a partial debt jubilee happened, etc.
164) Quoting Hayek's famous speech from his lecture after receiving the Nobel Prize, "The Pretense of Knowledge" and then a footnote here from William White who emailed the author the comment that "Central bankers make a profound epistemological error by failing to treat the economy as a complex adaptive system. All their other errors are derivative." [This is very well put.]
Postscript: The World Turned Upside Down
165) On the Covid crash, showing how financial markets were vulnerable to a shock, once again interest rates were slashed to zero, money was printed, stimmies paid out, etc., to the point where the whole set of programs dwarfed what happened after the GFC.
166) The author compares Modern Monetary Theory and its key tenets to what Proudhon argued in his debate with Bastiat (in the book's introduction). On the "everything bubble" that followed the Covid intervention, likening SPACs to the South Sea Bubble era when "a company for carrying an undertaking of great advantage, but nobody to know what it is" was allegedly floated [again, this never happened: see note #50 above, this is a common misunderstanding/misquoting of something that was meant as satire from that era.]
167) Buffett's quote that interest rates basically are to the value of assets what gravity is to matter. This quote pairs well with the quote from Chapter 16 (see note #138) where "Newtonian physics breaks down at the speed of light; likewise economics breaks down when interest rates approach zero."
168) Last paragraph, where the author suggests that if central banks were to use digital currencies--limited to no more than an economy's trend growth rate, so as to prevent the state from inflating the money--that money would be as "good as gold." [To have written an entire book about how governments and their central banks always create havoc by keeping interest rates too low, but then to posit that these same governments and central banks would use a CBDC in a non-surveillable, non-represssive, non-inflationary way? This might be one of the most astoundingly naive things I've ever read.]
To Read:
William Graham Sumner: "The Forgotten Man" (essay)
Henry Hazlitt: Economics in One Lesson
Frederic Bastiat: Economic Sophisms
Suetonius: The Twelve Caesars
Iris Origo: The Merchant of Prato: Daily Life in a Medieval Italian City
Charles Goodheart and Manoj Pradhan: The Great Demographic Reversal
Gustav Cassel: The Nature and Necessity of Interest
Emily Wilson: Seneca: A Life
Anne-Robert Jacques Turgot: The Turgot Collection (ed. David Gordon)
Bernard Mandeville: The Fable of the Bees
James Buchan: John Law: A Scottish Adventurer of the Eighteenth Century
James Buchan: Frozen Desire
Richard Cantillon: "Essai Sur La Nature du Commerce en Général" (essay, translated by Henry Higgs)
James Grant: Bagehot: The Life and Times of the Greatest Victorian
David Joslin: A Century of Banking in Latin America
Matt Stoller: Goliath: The 100-Year War Between Monopoly Power and Democracy
Jeremy Rifkin: The Zero Marginal Cost Society
David Cannadine: Mellon: An American Life
William Bernstein: The Delusion of Crowds
***Rudolf Hilferding: Finance Capital
*** Louis D. Brandeis: Other People's Money and How the Bankers Use It
Ferdinando Galiani: On Money
***Arthur E. Monroe: Early Economic Thought: Selected Writings from Aristotle to Hume
Lien-sheng Yang: Money and Credit in China: A Short History
Lewis Carroll: Alice in Wonderland
Lewis Carroll: Sylvie and Bruno
***Dennis Robertson: Money