What's Wrong with Money? : The Biggest Bubble of All (Hardcover) (Michael Ashton)
Following the Global Financial Crisis in 2008-2009, many observers expected widespread deflation to ensue. However, core measures of inflation barely budged because inflation is not related to growth. Money’s value is tied to the amount of it in circulation, and to people’s trust in central banks and governments. At this time, lazy central banks have greatly increased the amount of circulating money (as opposed to reserves) and the level of trust in global central banks and government fiscal authorities has begun to seriously erode. While expert Michael Ashton does not believe that there is a conspiracy over inflation reporting, many readers do. This audience, comprising retail investors, some institutional investors, and many citizens disenchanted with the actions of our burgeoning central government, sense something is rotten at the core. They are right.
We need money. An economic system without money is incredibly inefficient. In principle, money does not need to be issued by central governments; all that is necessary for it to serve as a valid medium of exchange is that people trust that it has value. At one time this meant that the currency needed to be backed by something that had value beyond the issuer, such as gold and/or silver, so that trust in the issuer didn’t matter as much. Nowadays, money only has value because we all agree that it has value, and we all agree that it will have value tomorrow. Historically, that has never been enough: a central bank which has authority to over-increase the supply of money has always done so. That is one way that money dies: slowly. But money can also die quickly. The troubles with a bitcoin exchange in 2014 illustrated how even minor “trust” issues can evaporate the value of money. This book will lay out this history, and illustrate how the erosion of trust (and central bank responsibility) today is leading to a high risk of both near term and long term inflation, along with a meaningful risk of a more-serious disruption.
In this book, all investors will learn:
- The history of the value of money—backed by stored value or some kind, or not.
- Scenarios in which money dies “slowly” or “quickly”
- How to invest in these scenarios “die slowly” and “die quickly” scenarios
- What might cause the erosion of money scenario that can cause hyper-inflation and put the financial system into shock.