The End of Alchemy
 | |
| Author | Mervyn King |
|---|---|
| Genre | Finance and economics |
| Publisher | W. W. Norton & Company |
Publication date | March 21, 2016 |
| Media type | Book, Ebook and audiobook |
| Pages | 448[1] |
The End of Alchemy is a book written by Mervyn King, the former Bank of England Governor from 2003-2013, and during the 2007–2008 financial crisis. The book focuses on the history, flaws, and future of money, banking, and financial systems. Alchemy is referring to the money creation process in which banks 'manufacture' the new money supply as debt in the debt-based monetary system, where banks create margin for themselves and invest it as debt, such as mortgages, loans, bonds, treasuries, and other debt-based financial instruments.
The leverage created by banks creates the economic bubbles that the Central banks have to pop with deflationary monetary policy that typically causes unemployment to rise.[2]
The Gold Standard and the Great Depression
[edit]In Chapter 3, titled ' The Good, the Bad, and the Ugly ' King explains how in the 1920s countries tried to reinstate the Gold standard at pre-World War I parities causing deflationary pressures and the Great Contraction through tight monetary policy, causing the Great Depression.[3]
See also
[edit]- Credit theory of money
- Radical uncertainty
- Inverted yield curve
- Lender of last resort and Pawnbroker for all seasons
- Chicago plan - 100% reserve requirement for banks
- Modern monetary theory
- Disequilibrium macroeconomics
- Prisoner's dilemma and Trust
- Northern Rock - British bank nationalized during the Great Recession
- Cryptocurrency
References
[edit]- ^ "The End of Alchemy: Money, Banking, and the Future of the Global Economy: King, Mervyn: 9780393247022: Amazon.com: Books".
- ^ "THE END OF ALCHEMY: A REVIEW ESSAY" (PDF). www.nber.org.
- ^ "The Gold Standard, Deflation, and Financial Crisis in the Great Depression: An International Comparison" (PDF). www.nber.org.