Book reviews: Lords of easy money. By Christopher Leonard.


This book gives a short reason for why the FED was formed a good 100 years ago.

It also explains what the FED does (they determine the price of money, or at least the price of US Dollars) and goes into details about how they do this.

This is where things get really interesting, because how exactly does the FED create and destroy money? How do they force the market to pay more or less interest for say a mortgage or a CDO?

Ben Bernanke, Jerome Powell, Janet Yellen, Alan Greenspan and Paul Volcker are all introduced and their tenure described. All that is explained, not in dry textbook for, but by focusing on the people and decisions that got the USA in the deep trouble it is now.

Yes. You read that correctly. Inflation and unemployment are low, stocks are doing greats and other metrics look healthy too. And yet, the FED is not only keeping trillions of government and corporate debt on its balance sheet, but even in these "strong" conditions it also has to keep interest rates low.

The book ends with a sobering thought: the next few decades the US and world economy will have a hard time recovering from the Quantitative Easing (money printing) and Zero Interest Rate Policy that the FED launched after the Great Financial Crisis of 2008.




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Greetings,
Jan