Money, banking & economy

Of late, I have been reading quite a bit on economics, inflation, banking, etc. Am listing out a few that I found useful.

1. The mystery of banking

A good resource I recently found also happens to be free (which makes us value it lesser – I have read only 1 book and few other, I just scraped through).  Those are the ones from the Ludwig Von Mises institute – which is a strong proponent of the Austrian school of economics.

Amongst a pile of free books there, I enjoyed reading Murray N Rothbald’s book – The mystery of banking. And I recommend it highly.

This book gives you an excellent understanding on how banks came into being and how they function today. Don’t be surprised if you get to know that banks do create money. Also, don’t be apalled at how easily banks multiply loans against fractional reserves and make money – almost out of thin air.

Yes, banks do perform an important function in the economy. But this book is critical of their fractional reserve banking and how they are bankrupt by design. It gives solid arguments too.

Overall, you will definitely learn more about banking including:

  • history of money & banking
  • gold standard
  • inflation (how it is caused)
  • debasement
  • fiat money
  • fractional reserves and how it helps create money (& increase supply of money in economy)
  • role of central banks
  • controlling supply of money in the economy (and hence, the prices of goods and inflation)
  • why a bank is by design bankrupt (and how a bank-run can ruin it)

2. Ascent of money

I wanted to read Niall Ferguson’s “Ascent of money“. But I took an alternative route and watched the video instead. It’s 4 hours long, but it is good. Especially, I enjoyed the parts on the Mississippi company, the Rothschilds and war financing, why a few cultures had strong rules against usury and lending, a bit about insurance and our housing bubble (sub-prime). I intend to watch it in parts again.

3. Inside job

I cannot but avoid mentioning this wonderful documentary on the sub-prime crisis – Inside job. A brilliant piece by Charles Ferguson on how entire most of the financial industry is a whore-house in disguise. Inspite of all those debacles which led to massive collapse of the credit system, most of them have walked away free. Must watch!

4. Day to day economics

I read another book, esp suited to Indian scenario. Day to day economics by IIM-A Prof Sathish Deodhar. It’s a much simpler, easy to read book on the economy – inflation, budget, banking, taxes, etc. Nothing in depth, but its decent. At least 2 chapters were good. Since I had read Rothbald’s book earlier, this was a breeze to read through. If you want a simple primer on economics, esp on the Indian economy, this is a decent book to get you started.

5. A bank for the buck

Now, if you are interesting in knowing how a new bank could be setup in India – there is one excellent book by Tamal Bandopadhyay. A bank for the buck, the story of how HDFC bank was created. It’s more of an entrepreneural narration than a book on banking. Highly recommended, even if you are not interested in banks.

6. Miscellaneous

There’s one book I want to read, but haven’t yet. Fault lines by Raghuram Rajan – our RBI Governor.

Finally, if you are not too keen on reading and want an alternative – there are a few videos that I found interesting. But I would recommend reading than viewing – but that’s just me.

That’s it for now. I will be back with more resources under this topic.

Leave a Reply

Your email address will not be published. Required fields are marked *