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A Primer on Money, Banking, and Gold
One of the foremost financial writers of his generation, Peter Bernstein has the unique ability to synthesize intellectual history and economics with the theory and practice of investment management. Now, with classic titles such as "Economist on Wall Street, A Primer on Money, Banking, and Gold, and The Price of Prosperity"--which have forewords by financial luminaries and new introductions by the author--you can enjoy some of the best of Bernstein in his earlier Wall Street days.With the proliferation of financial instruments, new areas of instability, and innovative capital market strategies, many economists and investors have lost sight of the fundamentals of the financial system--its strengths as well as its weaknesses. "A Primer on Money, Banking, and Gold" takes you back to the beginning and sorts out all the pieces.
Peter Bernstein skillfully addresses how and why commercial banks lend and invest, where money comes from, how it moves from hand to hand, and the critical role of interest rates. He explores the Federal Reserve System and the consequences of the Fed's actions on the overall economy. But this book is not just about the past. Bernstein's novel perspective on gold and the dollar is critical for today's decision makers, as he provides extensive views on the future of money, banking, and gold in the world economy.
This illuminating story about the heart of our economic system is essential reading at a time when developments in finance are more important than ever.
Peter Bernstein skillfully addresses how and why commercial banks lend and invest, where money comes from, how it moves from hand to hand, and the critical role of interest rates. He explores the Federal Reserve System and the consequences of the Fed's actions on the overall economy. But this book is not just about the past. Bernstein's novel perspective on gold and the dollar is critical for today's decision makers, as he provides extensive views on the future of money, banking, and gold in the world economy.
This illuminating story about the heart of our economic system is essential reading at a time when developments in finance are more important than ever.
272 pages, Kindle Edition
First published November 30, 1964
25 people are currently reading
423 people want to read
About the author
Peter L. Bernstein
46 books263 followersFounder and President of Peter L. Bernstein, Inc., which he established in 1973 as economic consultants to institutional investors and corporations around the world.
In 1951, after teaching economics at Williams College and a five-year stint in commercial banking, Peter became Chief Executive of a nationally–known investment counsel firm, where he personally managed billions of dollars of individual and institutional portfolios. The assets under management at the firm had grown more than tenfold by the time he resigned in 1973 to launch Peter L. Bernstein, Inc.
Peter was the first Editor of The Journal of Portfolio Management in 1974, a widely-read scholarly journal for investment managers and academics in the field of finance and investments. He is now Consulting Editor of the Journal.
He served for many years on the Visiting Committee to the Economics Department at Harvard University, as a Trustee and member of the Finance Committee of the College Retirement Equities Fund (CREF), and as a Trustee of the Investment Management Workshop sponsored by the Association for Investment Management & Research’(AIMR).
He is the author of nine books in economics and finance plus countless articles in professional journals such as The Harvard Business Review and the Financial Analysts Journal, and in the popular press, including The New York Times, The Wall Street Journal, Worth Magazine, and Bloomberg publications. He has contributed to collections of articles published by Perseus and FT Mastering, among others
He lectures widely throughout the United States and abroad on risk management, asset allocation, portfolio strategy, and market history.
Peter graduated from Harvard College with a degree in economics, magna cum laude. He was also elected to Phi Beta Kappa.
After serving as a member of the research staff at the Federal Reserve Bank of New York and in a civilian capacity at the Office of Strategic Services in Washington, he joined the armed services and rose to the rank of captain in the Air Force in World War II, assigned to the Office of Strategic Services in the European theater.
He taught economics for many years as an adjunct professor on the Graduate Faculty of the New School for Social Research in New York.
Peter has received three major awards from the Association for Investment Management & Research (AIMR), the key organization for investment managers and analysts:
The Award for Professional Excellence, AIMR's highest award,
The Graham & Dodd Award, given annually for the outstanding article in the Financial Analysts Journal for the previous year, and
The James R. Vertin Award, recognizing individuals who have produced a body of research notable for its relevance and enduring value to investment professionals.
In 1951, after teaching economics at Williams College and a five-year stint in commercial banking, Peter became Chief Executive of a nationally–known investment counsel firm, where he personally managed billions of dollars of individual and institutional portfolios. The assets under management at the firm had grown more than tenfold by the time he resigned in 1973 to launch Peter L. Bernstein, Inc.
Peter was the first Editor of The Journal of Portfolio Management in 1974, a widely-read scholarly journal for investment managers and academics in the field of finance and investments. He is now Consulting Editor of the Journal.
He served for many years on the Visiting Committee to the Economics Department at Harvard University, as a Trustee and member of the Finance Committee of the College Retirement Equities Fund (CREF), and as a Trustee of the Investment Management Workshop sponsored by the Association for Investment Management & Research’(AIMR).
He is the author of nine books in economics and finance plus countless articles in professional journals such as The Harvard Business Review and the Financial Analysts Journal, and in the popular press, including The New York Times, The Wall Street Journal, Worth Magazine, and Bloomberg publications. He has contributed to collections of articles published by Perseus and FT Mastering, among others
He lectures widely throughout the United States and abroad on risk management, asset allocation, portfolio strategy, and market history.
Peter graduated from Harvard College with a degree in economics, magna cum laude. He was also elected to Phi Beta Kappa.
After serving as a member of the research staff at the Federal Reserve Bank of New York and in a civilian capacity at the Office of Strategic Services in Washington, he joined the armed services and rose to the rank of captain in the Air Force in World War II, assigned to the Office of Strategic Services in the European theater.
He taught economics for many years as an adjunct professor on the Graduate Faculty of the New School for Social Research in New York.
Peter has received three major awards from the Association for Investment Management & Research (AIMR), the key organization for investment managers and analysts:
The Award for Professional Excellence, AIMR's highest award,
The Graham & Dodd Award, given annually for the outstanding article in the Financial Analysts Journal for the previous year, and
The James R. Vertin Award, recognizing individuals who have produced a body of research notable for its relevance and enduring value to investment professionals.
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Displaying 1 - 11 of 11 reviews
March 16, 2009
Classic, accessible primer on money
Peter L. Bernstein’s classic, originally published in the mid-1960s, provides a learned, generally accessible explanation of the workings of the American monetary system. Of course, some of the information is quite out-of-date, but you’ll understand that as you read. For example, the author speaks extensively about the importance of gold in international finance – yet gold has not really mattered since 1971. Moreover, the book came out before history taught the lessons of the 1970s, 1980s and 1990s, not to mention the financial crisis that began in 2008. Former Fed Chair Paul Volcker’s foreword and Bernstein’s new introduction acknowledge these time lags. The last quarter of the 20th century saw a very extensive reshaping of the financial system, including the creation of new financial entities and even new forms of money, so this primer is less useful and informative than it may have been when new. Nonetheless, getAbstract finds that Bernstein’s explanation of the fundamental workings of the Federal Reserve and of the role of commercial banks in the monetary system remains lucid and well worth reading.
Peter L. Bernstein’s classic, originally published in the mid-1960s, provides a learned, generally accessible explanation of the workings of the American monetary system. Of course, some of the information is quite out-of-date, but you’ll understand that as you read. For example, the author speaks extensively about the importance of gold in international finance – yet gold has not really mattered since 1971. Moreover, the book came out before history taught the lessons of the 1970s, 1980s and 1990s, not to mention the financial crisis that began in 2008. Former Fed Chair Paul Volcker’s foreword and Bernstein’s new introduction acknowledge these time lags. The last quarter of the 20th century saw a very extensive reshaping of the financial system, including the creation of new financial entities and even new forms of money, so this primer is less useful and informative than it may have been when new. Nonetheless, getAbstract finds that Bernstein’s explanation of the fundamental workings of the Federal Reserve and of the role of commercial banks in the monetary system remains lucid and well worth reading.
March 29, 2017
This is a good introduction to how money and banking function; however, it is very general, and most of the information is likely available for free on the internet. When it was first published in 1965, this would have been one of the best sources for the information; however, I would recommend 21st Century readers save their money.
March 15, 2009
Easy to follow primer on a topic people should understand better - how the economy actually works. This deceptively easy read concisely conveys a ton of information, but I assume it’s a much richer read if you have some familiarity with the topics covered. I frequently found myself referencing prior readings/reviewing concepts in my mind as I read through the work – but it probably works as a good intro. Its also full of historical curiosities that remind you how dynamic our monetary history has been over the last century (and how we take it for granted)–
“Since 1933, only the U.S. Government is allowed to own gold”
“Furthermore, a change in the price of gold requires Congressional action”
“direct investments abroad by American concerns… have been restrained by a set of direct controls”
“the United States accrues relatively little bread and butter advantage from this position as a ‘key currency’”
A good, educational read that eloquently summarizes the things that haven’t changed* as well as preserving the historical oddities that have.
*“[The:] soundness [of our money:] rests upon the soundness of each individual borrower – but the ultimate soundness of the borrowers depends upon the level of prosperity and rate of economic growth throughout the American economy.”
“Since 1933, only the U.S. Government is allowed to own gold”
“Furthermore, a change in the price of gold requires Congressional action”
“direct investments abroad by American concerns… have been restrained by a set of direct controls”
“the United States accrues relatively little bread and butter advantage from this position as a ‘key currency’”
A good, educational read that eloquently summarizes the things that haven’t changed* as well as preserving the historical oddities that have.
*“[The:] soundness [of our money:] rests upon the soundness of each individual borrower – but the ultimate soundness of the borrowers depends upon the level of prosperity and rate of economic growth throughout the American economy.”
July 25, 2014
Bernstein explains in fine prose the detailed machinations of how banks create money and how economics really works. While "A Primer" focuses on describing the great gears of this clock, it does not fail to ignite flashes of insight and "aha" moments. It is amazing how so much of this is still pertinent since it was written over 40 years ago while the US was still on the "gold standard". With precisence, though he predicts the move away from gold and the future demise of the Bretton Woods system. He encourages us to think: Is inflation the greatest threat? Is monetary policy sufficient? A thorougly clear description of the magic giant teeter-totter we call our economy.
February 8, 2022
This book is an honest, transparent description of America's banking industry in the 1960's. Bernstein republished it in 2008 with a new introduction along with the old introduction written in 1968. The 2008 reprint is the same as the original in 1968. These introductions helped me to believe in the book.
The gold standard would come to an end in the early 1970's. From the end of WWII to the end of US dollars being backed by gold, it was illegal for the US government to go into debt except to buy gold.
In 1968, Bernstein wrote: "Our government is both legally and morally prohibited from financing it's expenditures by printing the money to do it." page 36.
The gold standard would come to an end in the early 1970's. From the end of WWII to the end of US dollars being backed by gold, it was illegal for the US government to go into debt except to buy gold.
In 1968, Bernstein wrote: "Our government is both legally and morally prohibited from financing it's expenditures by printing the money to do it." page 36.
Read
August 2, 2011Fantastic book. Troublingly, I think I might finally understand what money is- an issue that has bothered me for most of my life. The troubling bit is that money doesn't really exist. It represents little more than an idea. That's a facile explanation, but it's more or less where the explanation begins. Next stop: Keynes and Bagehot!
January 13, 2024
A low four. The book itself is interesting enough, the first half being an adequate summary of the functions of money and a banking, with a little bit on gold, then the second half being a look into economic history. Too bad really that this is such an outdated book. Hence I was thinking whether to put this at three stars. I guess for the historical value alone four stars is okay.
May 11, 2014
If you ever wonder why gold and banks has such a special place in the history - here is the answer. It's a great foundation of modern theory of banking, money and gold. Also it explains how banking looks like when money was backed by a gold. Interesting comparison of today's world.
December 30, 2009
The best book to understand how money works. Although written 50-60 years ago, it is the best I have read about money.
June 8, 2012
A bit dated but still an excellent account of the workings of the treasury, fed and the banking system.
February 14, 2010
I am truly ignorant when it comes to banking.
Displaying 1 - 11 of 11 reviews