Money: How the Destruction of the Dollar Threatens the Global Economy – and What We Can Do About It

by Steve Forbes, Elizabeth Ames

Few topics are as misunderstood today as the subject of money. Since the U.S. abandoned a gold-linked dollar more than four decades ago, the world's governments have slid into a dangerous ignorance of the fundamental monetary principles that guided the world's most successful economies for centuries. Today's wrong-headed monetary policies are now setting the stage for a new global economic and social catastrophe that could rival the recent financial crisis and even the horrors of the 1930s. Coauthored by Steve Forbes, one of the world’s leading experts on finance, Money shows you why that doesn’t need to happen--and how to prevent it. After reading this entertaining and hugely well-informed book, you will know more about money than most people in the highest government positions today. Money explains why a return to sound money is absolutely essential if the U.S. and other nations are ever to overcome today's problems. Stable money, Steve Forbes and Elizabeth Ames argue, is the only way to a true recovery and a stable and prosperous economy. Today's system of fluctuating "fiat" money, in which governments manipulate the value of the dollar and other currencies, has been responsible for the biggest economic failures of recent decades, including the 2008 financial crisis, from whose effects we continue to suffer. The Obama/Bernanke/Yellen Federal Reserve and its unstable dollar policies are accelerating our course toward disaster, the authors show, in numerous convincing examples. In Money , Forbes and Ames answer these crucial questions: What is the difference between money and value?What is real wealth?
How does sound money contribute to a well-functioning society?
How have our money policy errors led to the current problems in global financial markets?
What can we do now to reestablish the strength of the dollar and other currencies? The authors argue that the most effective way to return to a sound money policy and a healthy economy is to put the dollar back on a gold standard, and they outline the several different forms a gold standard could take. They also share invaluable suggestions for how to preserve our wealth and where to invest our money. Money is essential reading for anyone interested in this crucially important subject.

Genres: Economics, Business, Finance

272 pages, Hardcover

First published May 13, 2014

Reviews

[Amora · Rating 4 out of 5]

Lower interest rates set by the Federal Reserve are no free-lunch. When the Federal Reserves decides to artificially lower interest rates trust between the government and citizens deteriorates and as a result crime increases. The Federal Reserve’s monetary policies have also increased the intensity of recessions as a result of the gold standard being dropped by Richard Nixon. The solutions here may sound simplistic but they have worked in practice for hundreds of years.

[Dave Voyles · Rating 5 out of 5]

I listened to the audiobook version, which is also narrated by the author, Steve Forbes, who is the EIC of
Forbes Magazine, and grandson of the publication’s founder, B.C. Forbes, and was co-authored by Elizabeth Ames. I found the book to be a fantastic primer on to those of you looking to understand economics not only from a personal perspective. The key points which stood out to me revolved around:


• Critical of quantitative easing
o Monetary policy used by central banks to stimulate the economy when standard monetary policy has become ineffective.
• Critical of the gold standard
o Money is a measurement, not wealth. When not placed against a solid standard, such as gold, the value can shift wildly, as will the value of gold.
• The Fed, a large contributor to the housing crisis of 2008
o The banks were to blame, but it largely came down to the weakening of the dollar, brought on by the Fed’s manipulation.
• Taxes are too high in the United States
o They should be flat, just as money should be flat against the value of gold.
• The changing value of the dollar is a cause for unrest
o Money is a method of measurement. Changing the value is like changing the length of a ruler while constructing a building

Overall, what I enjoyed most was that the authors broke down the terminology and concepts into practical examples that anyone could understand, not just those with an economics background. Better yet, on the chapter where they argue for the gold standard, they highlight several counter-points to their argument, so that the reader is better armed to hold a similar debate.

It took me about 6 hours to get through, and I plan on listening to it again to further grasp the concepts.

[Jim Kahn · Rating 1 out of 5]

Pure regressive conservative porn. Steve Forbes fancies himself as being an expert on the topic of money, but all he has demonstrated in his life is the ability to have inherited it thanks to the accident of birth. I chose to read this book expecting (based on the topic) to find a well sourced, data driven treatise but I was mistaken. Essentially, Forbes provides a list of negative economic events of the last fifty years and blames it on progressive leglislation and the conspiracy to decrease the value of the dollar because this is somehow good for someone.

To be fair, Forbes had the bad luck to publish this book at a time when the dollar is doing very well and the stock market at record highs. Instead of delving into the legitimate issues of income inequality and the fall of wages in a scientific fashion, he just blames the "liberal establishment."

An example of the kind of analysis you will find: "The 2008 financial meltdown was entirely due to the lack of US dollar being tied to the gold standard." Do you want some evidence of that? Tough, there is none.

This is a terrible book Forbes is a terrible person whose incompetence we are forced to deal with solely because he inherited a fortune.

[Erica · Rating 5 out of 5]

Another really interesting and enlightening book. It really brought together all my lessons from micro- & macro- economics. If we artificially, through governmental regulation, raise or lower prices. There will always be wasted efficiency generally realized through rationing and shortages, sometimes wasted surpluses. If we don't reestablish a gold standard, hyperinflation may crash our economy. And at the very least will make most of our savings worthless.

The most enlightening fact was that my money from the year 2000, out of 1000$ was worth only 73$ today, after adjustment for inflation. I want to start my own business, but I also would like to be able to do so in a free market economy, one that doesn't kill innovation through excessive regulation, that should be minimal to function efficiently. Free market capitalism does this, through each individuals pursuit of happiness, increased efficiency, innovation and progress can be made within society!

[Malin Friess · Rating 4 out of 5]

In 1971 (When Richard Nixon removed the US dollar from being linked to Gold) the Federal debt was $398 billion (34% of GDP). Today the Federal Debt stants at $17 trillion (over 100% GDP) enough to downgrade our standing with S&P.

Forbes believes the monetary policy of the United States in on the wrong track. The Federal Reserve (Bernake/Yellen) has too much power, we left the gold standard 4 years ago, and inflation is destroying future earnings. Artificial manipulation of currency and interest rates caused the crashes of the Market in 2001 (tech bubble) and 2008 (housing bubble).

How does Forbes recommend investing (or what he calls protecting yourself). First you have to understand that inflation is a hidden goverment tax. (Remember in the 1970's gas cost 35 cents per gallon). Inflation eats up your money--but not the goverment as this provides an easy way for the government to pay down its debt it acrued years ago with now easy inflated money. Forbest suggests the following:

5-10% in TIPS (treasury inflated protected securities)
5-10% Cash (for emergencies)
5-10% Gold Bullion
the rest in Stocks

4 stars. Getting back on the gold standard is the right thing to do. Our currency would be the envy of the world.

[Jordan · Rating 5 out of 5]

Not only does Forbes exhaustively break down the logic and empirical evidence behind various monetary policies, but he offers real solutions throughout in what moving to a 21st century gold standard would look like and how it would function.

[Mark · Rating 4 out of 5]

Good at many things, bad with a few things. Should be supplemented with either: How an Economy Grows and Why It Crashes (Peter Schiff) and/or America’s Great Depression (Murray Rothbard).

[Tyler Nguyen · Rating 1 out of 5]

I read this book for a college course. If you’re looking for a super dry account of how bad the US is at maintaining the US Dollar, followed up with reasons rich folks think you’re bad at saving and investing, this is the book for you. Get your shit together, you peasant.

[Brendan Hughes · Rating 4 out of 5]

Recommended read for those interested in economics and investors. It is an interesting discussion about topics such as sound money which are not often considered and seem to have been lost in today's world.

[Cory Wallace · Rating 4 out of 5]

This book gives me a must better understanding of the way currency works and my approach will adjust to make the best decisions for my situation.

[ERIC HALL · Rating 5 out of 5]

Excellent book. I'd like to see an update

[Seth · Rating 3 out of 5]

In Money, Steve Forbes provides a brief history on the development of money and monetary systems, and then spends a lot of time explaining his opinion about the recessions in the 2000s—its causes, consequences, and fixes. It should be no surprise that Forbes argues that loose money and over-regulation of the financial markets--not the opposite--are what caused our recent financial difficulties, and he traces the source of trouble to the decoupling of the dollar from a gold standard.

In the period since the Federal Reserve began meddling with the economy (1913) and the U.S. abandoned the gold standard (1973), government (and individual) debt has exploded, the purchasing power of the dollar has plummeted, and our economy has been subjected to a roller coaster ride of booms and busts, including the recent recession in the 2000s. To remedy our economic sickness and usher in an era of growth and stability, Forbes argues, we should return to a sound monetary system based on a gold standard.

Forbes spends a lot of time explaining that as a medium of exchange money has no inherent value; its purpose is to serve as a measurement of the value of other things. The government has (or should have, rather) an interest in setting and maintaining a consistent means of measuring value. Forbes writes, “Just as we need to be sure of the number of inches in a foot—or the minutes in an hour—people in the economy must be certain that their money is an accurate measure of worth. When the value of money fluctuates, as it so often does today, it produces uncertainty in addition to unnatural and often destructive marketplace behavior—artificial booms and busts that breed malignant economic and social consequences.”

The affects have been wide-ranging. The gradual increase in the price of oil is not because of OPEC, argues Forbes, but due to the dollar’s declining value. It’s made us poorer: “The debasement of the our dollar has taken away every penny of nominal pay increase for 41 years, leaving the median income in 2009 […] virtually the same as it was in 1968.” Easy money has fueled the alarmingly exponential growth in the cost of higher education, resulting in graduates up to their eyeballs in debt and with wages with shrinking purchasing power. One particularly fascinating study that he cited found that “inflation has actually been found to have a stronger connection to crime than joblessness.” When a government can print money at will, politicians take every opportunity to grow more powerful, more coercive, and more corrupt as they traffic in influence and purchase votes by spending on expensive social programs. This is not a partisan reality; it's a general political one.

Forbes ridicules the Keynesians and central planners who think 1) that they can organize and control an economy as huge and complex as ours, and 2) that they can spend their way out of a depression. He quotes Ron Paul, who said, “If governments or central banks really can create wealth simply by creating money, why does poverty exist anywhere on earth?”

Yet Forbes tempers against fear-mongering by noting that other countries have been in an even worse situation than ours and managed to growth themselves back to economic health by implementing a sound monetary system: “Great Britain […] had a huge debt after the War of Spanish Succession in the early 1700s—250 percent of GDP. That nation also took on enormous debt during the subsequent Seven Year War, and later, as a result of the 20-year war with Napoleon. Yet the British were able to emerge in the 19th century as the greatest industrial power in the world because of their stable currency and capital markets.” He also notes that the US was in worse shape after WWII than it is in today.

There is not a lot of new content here (I’ve heard most of the arguments already), but for the lay reader it’s a straightforward and compelling discussion of our economy today and the necessity of going back to a gold standard of some sort. Forbes is not particularly strict about which approach to take—there are several that he outlines—but he stresses the general imperative for a sound monetary system. “A gold standard would obliterate inflation. From 1821 to 1914, the cost of living in Britain went up 0.1% a year. Compare that to the double-digit rate of inflation between 1971, when the link to gold was severed, until 1983, when that bout of inflation was conquered.”

Unfortunately, Forbes’ investment advice is about as banal and mainstream as you can find: Contribute the maximum to your 401(k) and IRA accounts, invest in index funds to spread your risk out over the entire stock market, etc. For somebody who wrote the forward to George Gilder’s contrarian book about capitalism, Wealth and Poverty, I was surprised to read this section. I expected something a bit more paradigm-shifting. That made the book a mixed bag overall, but I was still glad I read it.

(A digital copy of this book was provided by the publisher through Netgalley for purposes of review.)

[Darren · Rating 4 out of 5]

The central message of this book sounds simple – return to the Gold Standard and see the US Dollar (and other currencies) regain their strength and stop seesawing about. The reality and practicality might be different.

To the average person in the street – as well as the so-called professional investor or business executive - this can be an alarming read, even though they cannot fail to know the practical reality. The value of our money is diminishing, costs are rising and we seemingly need to do more to achieve less.

So why do we seemingly play with our currencies, a fundamental bedrock of our society? Good question! The authors start with that and pose the following thought-provoking comments: “Few people would see any benefit in constantly changing the number of inches in a foot or the number of minutes in an hour. Nor does anyone think that each of the US’s 50 states should have its own currency, or that each one should fluctuate against all the others. Think of how hard it would be for Americans in different states to buy and sell to each other. How hard would it be to travel if you weren’t sure what your Wisconsin dollars would be worth in Florida? Most Americans would consider such a system uselessly complicated and chaotic. Yet this is what happens daily between nations as a result of our global monetary system of fluctuating exchange rates.”

In many ways this book is depressing reading. The book itself is fine, it is jut the messages that it pushes. Reading the reality in black and white text can be uncomfortable. The authors note that the destruction of the dollar is the reason that two incomes are now necessary for a middle-class family that lived on one income in the 1950s and 60s. Ah, but we are better off aren’t we? Well, citing official statistics they note that a 2013 dollar would be worth only 17 cents if you had a time machine and could travel back to 1971. Still not alarming enough? Census Bureau statistics note that a man who earned $54,163 in 1972 earns today about $45,224 in inflation adjusted dollars—a 17% cut in pay.

This reviewer cannot take a position on the recommended changes that could help “save” countries that signed up to the plan. It is way beyond his pay grade, even if it appears to be uncontroversial and sensible on the whole. The authors note research published in 2011 that claimed that if the US Dollar was pegged to the Gold Standard, a barrel of oil would sell for less than $2.80 a barrel, and the price of gasoline would probably be around 30 cents a gallon. The rise in the cost of oil is not due to profiteering oil-producing nations, it is claimed, but a fall in the value of the dollar. Inflation doesn’t help either. If you had $100,000 in 2000 and did absolutely nothing, it would be worth only around $74,000 in 2013 – a 26% fall in a decade of supposedly low inflation, the authors note.

The recipe for recovery is interesting, sounds convincing in many ways and yet can be overly simplistic. Certainly there are many detractors who would shout “baloney” to the claims of the authors. Clearly a solution to the problems of the day is needed and whatever has been tried to date is probably not working. Would or could a return to the Gold Standard help? Clearly with every loser there must be a winner on the other side – so who is winning and is it in their interests to let a change take place?

Whatever you feel about the book and its central message, it was an interesting and entertaining read, even with its unfortunate shock value. Treat it as another data point for a much larger picture and you won’t be wrong. Just don’t store your money under the bed or in a mattress.

Money: How the Destruction of the Dollar Threatens the Global Economy – and What We Can Do About It, written by Steve Forbes and Elizabeth Ames and published by McGraw-Hill Professional. ISBN 9780071823708, 272 pages. YYYY

[Stanley Arthur · Rating 4 out of 5]

I just finished reading "Money:How the Destruction of the Dollar Threatens the Global Economy" By Steve Forbes. I found it to be an easy and very informative read. Readers not familiar with what "QE", "Quantitative Easing" and "Central Banks" are all about will find this to be an easily understood presentation of the subject.
Although I have always agreed with most of his conservative views on the economy, I always prefer a "point-counterpoint" approach, so I will place this book next to the left-wing Paul Krugman's "End This Depression Now" book on my bookshelf to balance each other and to keep my perspective more objective.
CAUTION: Self promotional comment follows.
In my recently published book "Build Wealth & Spend It All" the editors cut out my favorite chapter "The Federal Reserve: Lifting up the Skirt." They said it was too wonky and nerdy for the general public interest. But if you want a more in-depth, maybe wonky explanation of the history and activity of the Federal Reserve Bank you can download the deleted chapter free from my book website (the same as the name of the book and, no, I am not going to place a self-promotional link here).
You might want to also take a look at the classic "The Creature from Jekyll Island" by G. Edward Griffin.

[Jon · Rating 4 out of 5]

Money was a very well written book and I was able to read through the chapters fairly quickly.

I think it would have been nice if he went more into the pro-Fiat currency viewpoints rather than continuing to repeat his idea that the gold standard is the only way to go. There are many reasons why we don't tie our economy down to a commodity currency.

For one, if we were on the gold standard all of the human capital would be utilized to improve mining techniques rather than healthcare, education, finance, and the arts.

Second, currency was very unstable during the gold rush days in the late 1800s. A huge discovery can quickly devalue the currency. Think of how oil production in the Bakken region has completely changed in five years how the United States sees itself in the oil industry.

Overall it is a well written book and the authors are able to articulate very clearly their viewpoints.

[Steve Schardein · Rating 4 out of 5]

Forbes makes a compelling case in his book for the reversal of policies supporting fiat money in favor of a gold standard-based approach. The strategy at least makes sense on paper, and certainly history has shown it to be effective. G. Edward Griffin famously espouses much of the same reasoning in his book, The Creature From Jekyll Island, but of course the exploration of the economic side of the equation is much more the focus of Forbes' publication.

I enjoyed the book and found it to be enlightening simply in its depth of exploration of the matter. Some of the later chapters dive into investment recommendations and applications based on the material, which some might find helpful or enlightening. For the most part, however, I enjoyed the historical citations and the pure statistical exposure of Forbes' interpretation of our current fiscal situation.

[Aminul Haque · Rating 1 out of 5]

The peril of fiat money is well explained, although this is not a novel or a new idea. The arguments for a gold standard are not really convincing; especially when describing how a country can maintain a gold standard without having to back it up with gold - the third or the fourth option described in the book. If the government is not prepared and able to back up the currency with gold, then why would people accept it at the value of gold?

There have been numerous volumes written about this topic along different lines of thought. It appears that a more reasoned explanation is money's role as a measure of credit, a bearer of value but not a source of value by itself. When it appears that electronic or virtual money is the norm of the future, a gold standard is more and more irrelevant.

[KaToiri Santi · Rating 4 out of 5]

I was upset when I finished reading. It gave me insight & knowledge about things that are well covered up in this economy.

[Katarina · Rating 5 out of 5]

So worth reading!

After reading this I have a much better understanding of how money works, what it really is, and how fiscal policy can affect the whole world, not just the economy of one country.

Complex theories explained in easy to understand ways, very interesting to read, not at all dry or boring.

[Bill · Rating 5 out of 5]

Steve Forbes not only has a great grasp on money and its uses, he also has the ability to communicate in plain English with common sense. I commend this book to every person who wants to know what the issues are for monetary policy and what to do to protect investments from unwise political decisions.

[Da-xia Ming]

A very Comprehensive and Explosive manner has been used to intricately detail each and every aspect that describes the many effects that Dollar as a floating currency has on the economy. Gold Standard has been a basis of measuring unit of trade and transactions and De-pegging of dollar from the gold has cause upset leading to economic turmoil.

[Evan · Rating 3 out of 5]

This was a very complex book to understand at such a young age. If you would have read this book after economics this book would be perfect for expanding your knowledge on how money and the flow of economy works. It was a very informational book and I learned some important things about the dollar as well as the way other parts of the world have influenced it.

~Evan Calkins

[Matin Ahmedi · Rating 3 out of 5]

It's fairly a good read to get an understanding on how the Fed is debasing the dollar. Have read a few other books on similar topics. It's all the same. How they talk about gold being an ideal investment in turbulent times. Overall an average read.

[Rene · Rating 4 out of 5]

Skimmed the book. I already believe we should be on a gold standard. Lots of great economic history. I was interested in what Forbes recommends to do with money now. He recommends
5-10% in TIPs
5-10%in cash
5-10% in gold coins or bullion
The rest should be in stocks (index funds)

[Chris · Rating 4 out of 5]

Concise narration of our current economic mess and a way to fix our currency and economic woes. Steve Forbes is consistent and approachable is his views and should be our Secretary of the Treasury.
A great resource for current economic/business students.

[Elizabeth · Rating 4 out of 5]

I love Forbes' explanations, but at times this book turns into more of a political debate than an explanation of our monetary system.

[Aurelija · Rating 3 out of 5]

goldbuggery

[Tatiana · Rating 2 out of 5]

Some interesting concepts explained well in layman's terms, but very politically biased.

[Sandi · Rating 3 out of 5]

This is about a theory of money that says Kensian has failed . I say good luck to another theory