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Book Review: The Golden Revolution

This book is highly optimistic that we will restore a gold standard to our world.  Much as I would like it, because it restrains the power of governments that increasingly behave like thugs, I don’t think a gold standard is likely to replace the status quo.

The book has many good areas to commend it, where it deals with history, explaining the problems of the past.  It trashes the concept of the SDR of the IMF, it is the Euro on an even weaker footing.

But the book is weak, because it does not recognize that the standard for money and the regulation of banks are separate issues.  Merely instituting a gold standard will not bring stability.  One must regulate heavily the degree that banks borrow short and lend long.  We had many crises during the gold standard in the 19th century, none as bad as the Great Depression, but they all stemmed from a lack of bank regulation.  I have no sympathy for the concept of “free banking.”  Anyone that is making a large number of promises needs to be regulated; he is a systemic risk.

Chapter seven is the critical chapter of the book, and it fails because it doesn’t go far enough.  In the chapter, Russia adopts a gold standard, and requires payment in gold for exports.  Fair enough, but as other nations attempt to adopt a gold standard, they would find their exporters objecting, leading to no adoption of a gold standard.

Chapter seven is the only thing that makes this book unique, and it is why I requested it from the publisher.  That makes this book a “fail.”

On the bright side, I now know that a gold standard would be difficult to appear, unless hyperinflation drove people to a commodity standard.  (And the odds of that are better than 20% over the next 20 years.


I do not recommend this book.

Who would benefit from this book: No one.  If you want to, you can buy the book here: The Golden Revolution: How to Prepare for the Coming Global Gold Standard.

Full disclosure: I asked the publisher for the book and he sent it to me.

If you enter Amazon through my site, and you buy anything, I get a small commission.  This is my main source of blog revenue.  I prefer this to a “tip jar” because I want you to get something you want, rather than merely giving me a tip.  Book reviews take time, particularly with the reading, which most book reviewers don’t do in full, and I typically do. (When I don’t, I mention that I scanned the book.  Also, I never use the data that the PR flacks send out.)

Most people buying at Amazon do not enter via a referring website.  Thus Amazon builds an extra 1-3% into the prices to all buyers to compensate for the commissions given to the minority that come through referring sites.  Whether you buy at Amazon directly or enter via my site, your prices don’t change.


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One Response to Book Review: The Golden Revolution

  1. jobo says:

    I guess as a Crammer wanna-be this is to be expected. Topic is pretty hot at moment and John Mauldin re=prints Jim grants speech before NY-FED this week. Anyone wanting a better second opinion i suggest take a look at Mauldin’s site of look at GATA web site for a more informed review. Its hard to argue that the current system is one that should be kept and encouraged As I don’t.


David Merkel is an investment professional, and like every investment professional, he makes mistakes. David encourages you to do your own independent "due diligence" on any idea that he talks about, because he could be wrong. Nothing written here, at RealMoney, Wall Street All-Stars, or anywhere else David may write is an invitation to buy or sell any particular security; at most, David is handing out educated guesses as to what the markets may do. David is fond of saying, "The markets always find a new way to make a fool out of you," and so he encourages caution in investing. Risk control wins the game in the long run, not bold moves. Even the best strategies of the past fail, sometimes spectacularly, when you least expect it. David is not immune to that, so please understand that any past success of his will be probably be followed by failures.

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