Rating: 8.5/10

Everyone should buy this book solely to read Chapter 10, “Debasing the Coinage”, p190-212.  This chapter alone is easily worth full retail, and this is not surprising, as this is the area we would expect Stephen King to know best.

King makes a compelling case in this chapter that modern monetary interventions have devolved into a modern form of Beggar-Thy-Neighbor.

He notes that, “although stock markets made impressive gains in the years after the financial crisis, capital spending in the developed world remained largely moribund.  Instead, the most important channel became the exchange rate.”

He continues, “In a world in which most economies are weak simultaneously, however, printing money to drive the exchange rate lower risks becoming a zero-sum game: one country’s competitive gain is another’s competitive loss; one country’s inflationary increase is another’s deflationary problem.  And so it has proved.” Later: “Put another way, monetary policy has – unwittingly – become a mechanism by which countries wage financial warfare.”

Chapter 10, overall, is masterful, ending with the simple but powerful observation that, “In the event of another recession, central banks will have no option but to do more in the way of quantitative easing: knowing this, financial asset values will remain inflated, regardless of underlying economic performance.  Under these conditions, listed companies will continue to gain access to financial capital on favorable terms, whether or not that capital is deployed wisely… Overall, the result is likely to be persistent misallocation of capital and thus a sustained period of productivity underperformance.”

As for the rest of the book, I’d say… it depends.  For me, it comes down to a philosophical argument about the modern book.  I believe that much of the reason people valued books throughout history is that books summarized and synthesized, in one place, knowledge about a particular topic.   It’s no longer clear that this function of books is valuable.  People can get, on the Internet, any information they want, precisely tailored to their interests and backgrounds, in an instant and for free.  So my criticism of the rest of the book is that while there is some strong original content there, a bit too much of it for my taste consists of a rehash of well-known 20th Century historical events.