He calls into question the role of credit-rating agencies which abetted the 2008 crisis. The history of financial institutions such as Fannie Mae and Freddie Mac is also well explained in the book.įerguson decipher linkages between the Great Depression and the 2008 financial crisis. He illustrates the ills of stock market by typifying John Law, the creator of the first ever market bubble. Peppered with such historical facts, ‘The Ascent of Money’ segues from one topic into next with mathematical neatness, stoking up reader’s interest in anticipation of seemingly uncovered historical facts.įerguson underlines three central factors in the creation of market bubbles:
It was Rothschild, who sold bonds in different countries and stockpiled Gold for the British army that ultimately resulted in Napoleon’s rout. The same boom also witnessed a certain Nathan Rothschild play an instrumental role in Napoleon’s defeat in the battle of Waterloo. The booming bond market of England in the 18th century turned bonds into an attractive proposition worldwide. Where many nations favored war bonds, the irresistible temptation to depend on them led economies such as Italy and France into a financial quagmire.
The ability to fund a war through a market for Government debt gave rise to war bonds. The evolution of the bond market, in the words of Ferguson, was a radical move in the evolution of finance. Subsequently, he offers crisp explanations of key financial concepts such as Cash reserves, Money supply, Credit creation, fractional reserve banking, Gold standard (whom Keynes dismissed as a barbarous relic), etc. He kicks off the proceedings explaining the embryonic role of money in the Roman society. Aldous Huxleyįerguson notes in the foreword, “ Behind each great historical phenomenon, there lies a financial secret.” The charm of history and its enigmatic lessons consist in the fact that from age to age, nothing changes and yet everything is completely different. ‘The Ascent of Money’ is a scintillating journey tracking the evolution of money from the erstwhile Babylonian clay tablets to the exotic financial instruments of modern day.Ī tale of human frailties that have often proved pivotal to the ascension and the decline of money over the ages, ‘The Ascent of Money’ is a roller-coaster journey into the annals of finance.
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