13 October 2012 – The Aleph Blog

Book Review: How To Really Ruin Your Financial Life and Portfolio

Posted on 13 October 201213 October 2012 by David Merkel

Before I start, a thanks to all of my readers who have voted on my reviews. Note: if you have voted on many of my reviews favorably, further votes won’t help.? Amazon limits the effects of fans.? Onto the book:

For those unfamiliar with Ben Stein, he has done a series of books on “How to Ruin…” for example: How to Ruin Your Life and How to Ruin Your Financial Life. I have not read either of those two books, but after a glance at the table of contents of each book, I can say that what he wrote there is right, even if it is short.

If you can avoid making wrong moves, right moves will occur on average.

But… most of this is simple commonsense stuff reported from a negative angle.? If you have read the personal finance category at my blog, you would know what he has written and far more, and it is free.

There is no bad advice in this book, if you understand that it is offering you bad advice.? By telling you you to do stupid things, it incites you to do what is right.

Quibbles

The book is not worth $12 to those with a reasonable understanding of the markets.? It is worth a lot to the uninformed who think they know something but don’t.? This is a book you give; it is not a book that you buy.

Who would benefit from this book: ? This is the sort of book that you give as a gift to your clueless brother-in-law.? It has value there, to raise the awareness of those who are destroying their financial lives.? If you want to, you can buy it here: How To Really Ruin Your Financial Life and Portfolio.

Full disclosure: The publisher sent me a hard copy of the book, without my asking.

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.

Forest Fires and Central Banking

Posted on 13 October 2012 by David Merkel

We can create a force that eliminates forest fires, but there will be a cost.? A certain amount of forest fires are normal, and if we don’t have small forest fires, we will have big ones that happen infrequently, and cause a lot of damage.

Central banking is similar. Good central banking allows for the extinguishing of a lot of bad debts.? Bad debts should fail, and the Fed should not rescue them.? Better that the Fed should imitate William McChesney Martin, Jr., and allow recessions to do their good work, eliminating bad debts that would otherwise encumber the economy.

?I?m the fellow who takes away the punch bowl just when the party is getting good.? ? Fed Chairman William McChesney Martin, Jr.? He was a great central banker, as was Volcker.? Both of them embraced pain.? Wimps, like Greenspan, Burns, and Bernanke, embraced no pain, and assumed that their lame efforts to support the economy would actually aid things.

The Fed should have a single mandate, but it is not the mandate commonly proposed.? The Fed should restrain the total growth of credit in the economy, and ignore inflation and unemployment.? Let the Fed defend us against depressions.? It can succeed at that.

As for inflation and unemployment, the Fed can state that they can’t do anything about unemployment, which is largely true.? Inflation — that they can do, if it is desired, but they will need to stop doing QE, and do unsterilized purchases of debt.

That’s all for now.? Just remember that the government has a hard time interfering in the economy.? It doesn’t work, but they try to make it look like it works.

Democrats, Republicans — just remember that they can’t deliver what they promise you.