The Power of Gold: The History of an Obsession

Unemployment was at 15 percent but to stop the outflow of gold America raised interest rates and thus set the world up for the Great Depression. The author uses history to clearly explain why central bankers were "blinded" by gold and made such disastrous decisions. Gold now is no longer money and hopefully our central bankers have got their sight back. But if the current system of world money fails, gold the "ultimate hedge against chaos" is standing by at $662 a ounce (gold may not be money but it is certainly worth money). Ben S. Bernanke, the Chairman of the Federal Reserve has described the gold standard that took us into the Great Depression as "badly flawed" (does that mean a less flawed system is possible?). Unlike the author, Mr. Bernanke blames the system more than the operators of the system. The author's focus and description of the personalities making big decisions about gold makes this book a ten-times more fun read than the Fed Chairman's book, "Essays of the Great Depression" about gold (and other economic things). And I gave that book five stars so you know how I feel about this book.

Not your typical gold book (most are Buy Gold Now! type books - this is an honest history), the author is a true historian that writes in a very easy to read and compelling style. I actually laughed out loud twice while reading his footnotes! One of the best books out there for getting a historical look at gold and its role in our world. Also gets you current on the last 100 years of the forces driving the international money supply. Bernstein also wrote Against The Gods: The Remarkable Story of Risk, another great read and hard to put down (a must for any gambler/investor).

Mr. Bernstein skeptically sees gold as overrated and as potentially harmful. Think of this book as "The Tragedy of Obsession with Gold" as the story line. As Mr. Bernstein puts it, "This book tells the story of how people have become intoxicated, obsessed, haunted, and humbled over pieces of metal called gold."To make that point, the book begins with a story that Ruskin told about a man who is on a sinking ship with his gold. He gets the gold and jumps overboard, and drowns from the weight of the gold. Mr. Bernstein cites the analogy throughout the book for the fate that awaits those who are committed to their gold. The gold has them, rather than vice versa.Mr. Bernstein does a nice job of creating an on-going story line to put the role of gold in perspective. Gold first makes its appearance as an adornment for religious or personal purposes. This application leads to gold becoming used as money. Then gold helps create trade that only money can provide. From the trade comes power, and that power expands influence. Then as the world economy outgrows the supply of gold as a monetary stock, gold becomes a brake on economic growth. At the end of the book, gold is again turning into an adornment having been cut loose from being a reserve for the monetary stock. In this context, the book is about the rise and fall of the gold-based empire. That tale is best captured in the story of how little the gold from the Americas helped Spain economically. If a shortage of gold as money can slow down economic growth, an excess of gold can create inflation in general prices. That's the essence of Mr. Bernstein's argument about gold as a mercantile asset.Economic history is rarely so interestingly told, and Mr. Bernstein deserves a lot of credit for taking something that could have been dull and making it lively. He is an excellent story teller, and you will find what he has to say contains many new and interesting points.I was fascinated by the number of times that the fate of countries was affected by gold. Ransoms paid in gold for French Kings beggered that country on more than one occasion. The failure of worldwide wheat crops allowed the U.S. economic expansion to continue after the Civil War, as the U.S. was threatened with a shortage of gold needed for industrial goods. The Byzantine Empire lived on much longer than it would otherwise have by being able to buy defenders with gold. The Arab expansion was aided by access to gold. After World War I, the gold standard contributed to the Depression. Mr. Bernstein leaves us out on a limb about where our system of floating rate currencies will end. Without some form of global currency, we should see rapid distortions in economic results whenever such shifts in currency values occur. We are in the middle of one of those shifts right now between the dollar and the euro. Certainly, the universal government preference to debase the value of currencies will continue to plague us. Mr. Bernstein le

I just finished Peter Bernstein's new book on Gold. What a wonderful book! I read Against the Gods a few years ago and also Capital Ideas from Peter Bernstein, so I was looking forward to his new story about Gold. The writing is engaging with stories about Gold that entertain as well as educate. This book is sure to be a classic for years to come.

I am amazed by this book. I had read "Against the Gods", so I knew Peter Bernstein was a good writer -- but this story is both gripping and historical. Gold has always fascinated us through the ages -- this book makes you feel like you're a witness to this obsession through the ages. I particularly enjoyed the chapter on the great China reaction...wonderful. I'm breathless after reading this book. It's also a beautiful looking book with a wonderful piece of art on the cover. A treasure!