What has caused the world's ongoing financial troubles? Those who rail against the deregulation of the capitalist system and the greed of bankers are only half wrong. But the supposed 'deregulation' that took place in recent decades, far from exposing bankers to the discipline of market forces, instead privatized gains and socialized losses. Likewise, those who pin the blame on government efforts to encourage subprime mortgages to un-creditworthy borrowers are not seeing the whole picture. Ultimately, the cause of this bust, like the cause of practically all busts, is the artificial boom that preceded it. And the cause of the artificial boom is the inflation of the money supply.
There is of course much, much more to the story, and you'll find it all related with clarity and wit in The Evil Princes of Martin Place. Chris Leithner makes delving into the economic history of booms and busts exciting. Exploring from first principles why modern, fractional reserve banking is both immoral and impractical, illegitimately benefitting the powerful few and harming the rest, got my blood boiling. And the author's frequent humorous quips took the edge off without lessening the power of his message.
Everyone who wants to understand the current crisis, and explore the history and theory behind it, should read this book. Advanced degrees are entirely optional, as Leithner assumes no in-depth knowledge of economics, explaining concepts clearly and concisely.
More specifically, I think this book holds many treasures for anyone who senses that there is indeed something wrong with modern banking, but is at least somewhat unsatisfied with the explanations offered by people like Michael Moore. It will also prove of great value to those who appreciate the benefits of free markets in goods and services generally, but somehow think that money is different and requires pervasive government intervention.
If the cyclical suffering is ever to stop, we all need to get informed about this vital issue. Chris Leithner's book is the perfect place to start.
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