It was out of desperation (dropping the gold standard), but the logic behind fiat money had good intent. The fiat money we use today (which is backed by nothing but faith in the economy whose central bank created it), came to be due to the crisis of the Great Depression. John Maynard Keynes is a crucial figure in the book. However, after reading this book, I came to appreciate the Keynesian perspective better when it comes to money. In finance, anyone, be it a retail investor, investment banker, or lender, who ignores history does so at their own peril… consider this book to be an invaluable history lesson.įlaws in the gold standard: Before reading Lords of Finance, I was a firm supporter of a gold standard, albeit a skeptic that it will ever be enacted again.
It focuses on a particular era nearly 100 years ago but will remain timeless and educational forever. And the lessons learned will provide context for many of today’s monetary abnormalities (negative rates and excessive money printing). Lords of Finance is one of those books that will leave you economically smarter after reading. These central bankers were often troubled, mentally or physically, ill-equipped to counter a failing economy, and often mixed politics with monetary policy – a big no-no in today’s central banking world. The book focuses on the decision making from four critical central banks (England, France, the United States, and Germany) and how the men leading these financial institutions were not the stoic figures we might imagine. Lords of Finance by Liaquat Ahamed won a Pulitzer Prize for its detailed and entertaining breakdown of the lead up to the Great Depression, and its aftershocks.
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