Comment by FabHK
6 years ago
> Lords of Finance
Oh, yes, great book! And good read.
Two things stuck in my mind:
A) How slow things were back then. The British finance minister (“Chancellor and Under-Treasurer of Her Majesty's Exchequer”) would get on a steam ship, incognito, for a month or so to visit his counterpart in the US, then skipper back, and months later respond to the crisis.
B) How few people saw things coming. People thought the skirmishes that ended up precipitating WW I would soon be over, Irvin Fisher confidently declaimed just before the 1929 stock market crash that “stock prices have reached what appears to be a permanently high plateau”, people didn’t pay much attention to this obscure Adolf Hitler guy.
Every time, by the time the true dimensions became obvious, it was too late to do something (flee, sell, ...).
With respect to the current “15 cases going down to zero, we are doing great, we have it under control” flu, draw your own conclusions.
Edit: typos
Those stuck with me but so did the points the author made about gold. There was a depression. Central banks sticking to the gold standard is part of what made it the Great Depression.
Yes, absolutely. A return to the gold standard would be disastrous for our modern economies, in particular in times of exogenous shocks like now. The solution to bad central banks is not gold, but good central banks.