The Ascent Of Money

What are the big ideas?

1. The Role of Innovative Financial Techniques in Creating Economic Bubbles: This book highlights how innovative financial techniques, such as the issuance of paper money and inflation taxes, have played a crucial role in creating economic bubbles throughout history, from the Mississippi Company in France to the stock market bubble of the late 1990s. The book sheds light on the consequences of these financial innovations when used improperly or fraudulently, leading to economic instability and widespread financial losses.
2. Central Banks' Impact on Stock Markets: While it is well-known that central banks influence monetary policy through interest rates and quantitative easing, this book explores their role in shaping stock markets as well. It discusses how regulatory changes like the repeal of Glass-Steagall or MiFID have affected stock markets and highlights the impact of central bankers' actions on the volatility of these financial markets.
3. The Evolution of Insurance Markets: The book provides insights into the history of insurance as a means to manage risk, from its origins in ancient Rome to the present day. It discusses how insurance has evolved as a financial instrument and its role in protecting individuals and businesses against various risks. The book also highlights the limitations and challenges associated with insurance markets and their impact on the broader economy.
4. Microfinance as an Alternative to Welfare States: The book explores microfinance institutions' potential to help lift people out of poverty, offering an alternative to traditional welfare state systems that are increasingly unsustainable due to growing debt levels in some countries. It discusses the benefits and challenges of this financial instrument, including its role in promoting entrepreneurship and reducing poverty.
5. The Symbiotic Relationship Between China and the United States: This book offers a unique perspective on the economic relationship between China and the United States, which came to be known as "Chimerica." It explores how their economies have been interconnected through trade, capital inflows, and financial markets, creating a symbiotic relationship that has raised concerns about fair competition and currency manipulation. The book highlights how this economic relationship evolved during the 2007-2008 financial crisis and its implications for the future of global finance and economics.

Summary

Introduction

Takeaways

• The financial system plays a crucial role in economic development by facilitating transactions, allowing for savings and investment, and managing risk.
• Money has evolved from physical forms like cowrie shells and precious metals to paper currency and digital representations.
• Credit has been an essential component of financial systems since ancient times, but the modern credit system is characterized by complex financial instruments and institutions like banks and securitization markets.
• The bond market is a key driver of long-term interest rates and economic stability, and central banks play a crucial role in managing inflation and stabilizing financial markets.
• Insurance can be an effective way to manage risk, but it comes with costs and limitations. Real estate has been a popular investment due to its potential for appreciation and the perceived security of having a physical asset, but it also comes with risks and requires significant capital.
• The history of finance is marked by booms and busts, as well as periods of integration and fragmentation. Financial globalization has led to increased opportunities for financially knowledgeable individuals, but also increased risks for those who are financially illiterate.
• Understanding the origins and evolution of financial institutions and instruments can help shed light on their current role in the economy and the challenges they face in the modern world.

Quotes

“The ascent of money has been essential to the ascent of man.”

“perennial truths of financial history. Sooner or later every bubble bursts. Sooner or later the bearish sellers outnumber the bullish buyers. Sooner or later greed turns to fear.”

“collateralized debt obligations (CDOs)”

“As the banks took over the securities, the ratios between their capital and their assets lurched down towards their regulatory minima. Central banks in the United States and Europe sought to alleviate the pressure on the banks with interest rate cuts”

“poverty is not the result of rapacious financiers exploiting the poor. It has much more to do with the lack of financial institutions, with the absence of banks, not their presence. Only when borrowers have access to efficient credit networks can they escape from the clutches of loan sharks, and only when savers can deposit their money in reliable banks can it be channelled from the idle rich to the industrious poor.”

1 - Dreams of Avarice

Takeaways

• The evolution of money is closely linked to the development of financial institutions, particularly banks, which have facilitated the creation and movement of credit.
• Banks have undergone significant changes over centuries, from medieval moneylenders and goldsmiths to modern centralized financial institutions offering a range of services.
• The role of governments in regulating banks and creating monetary systems has been crucial in shaping the evolution of banking.
• The gold standard was an important system that anchored currencies to precious metals, promoting exchange rate stability but limiting the flexibility of monetary policy.
• Bankruptcy laws have allowed individuals and businesses to start over after financial failures, encouraging entrepreneurship and economic growth in the United States.
• The modern financial system includes various markets such as bonds, stocks, insurance, and real estate, which have globalized significantly over the past few decades.
• Monetary expansion since the 1970s, driven by increased money supply and declining bank capital, has led to unprecedented levels of consumer debt and rising inflation.
• The role of banks in creating credit and facilitating its movement is essential for economic development, but their activities can also lead to financial instability if not properly regulated.

Quotes

“Money, it is conventional to argue, is a medium of exchange, which has the advantage of eliminating inefficiencies of barter; a unit of account, which facilitates valuation and calculation; and a store of value, which allows economic transactions to be conducted over long periods as well as geographical distances. To perform all these functions optimally, money has to be available, affordable, durable, fungible, portable and reliable.”

“Banknotes (which originated in seventh-century China) are pieces of paper which have next to no intrinsic worth. They are simply promises to pay (hence their original Western designation as ‘promissory notes’),”

“money is a matter of belief, even faith: belief in the person paying us; belief in the person issuing the money he uses or the institution that honours his cheques or transfers. Money is not metal. It is trust inscribed. And it does not seem to matter much where it is inscribed: on silver, on clay, on paper, on a liquid crystal display.”

“Although the court recognizes his right to insist on his bond - to claim his pound of flesh - the law also prohibits him from shedding Antonio’s blood.”

“The liabilities of the bank thus became its deposits (on which it paid interest) plus its reserve (on which it could collect no interest); its assets became its loans (on which it could collect interest).”

“the Bank’s proper role in a crisis as the ‘lender of last resort’, to lend freely, albeit at a penalty rate, to combat liquidity crises.42”

“Large numbers of under-capitalized banks were a recipe for financial instability, and panics were a regular feature of American economic life - most spectacularly in the Great Depression, when a major banking crisis was exacerbated rather than mitigated by a monetary authority that had been operational for little more than fifteen years.”

“man who had exchanged his $1,000 of savings for gold in 1970, while the gold window was still ajar, would have received just over 26.6 ounces of the precious metal. At the time of writing, with gold trading at close to $1,000 an ounce, he could have sold his gold for $26,596.”

“banks have evolved since the days of the Medici precisely in order (as the 3rd Lord Rothschild succinctly put it), to ‘facilitate the movement of money from point A, where it is, to point B, where it is needed’.48 Credit and debt, in short, are among the essential building blocks of economic development, as vital to creating the wealth of nations as mining, manufacturing or mobile telephony.”

“only when savers can put their money in reliable banks that it can be channelled from the idle to the industrious.”

“Its prime cause was the rise and fall of ‘securitized lending’, which allowed banks to originate loans but then repackage and sell them on. And that was only possible because the rise of banks was followed by the ascent of the second great pillar of the modern financial system: the bond market.”

2 - Of Human Bondage

Takeaways

• The bond market has played a significant role in the economic history of many countries, particularly Italy and Argentina.
• The Argentine experience illustrates that the bond market is less powerful than it might first appear, as default spreads often do not fully reflect the risk of default.
• Inflation has declined significantly in many countries since the 1970s, making bonds an attractive investment again.
• The aging population in developed countries creates a large and growing need for fixed income securities like bonds, ensuring that bond markets will never be short of new issuance.
• However, the bond market's discipline has been absent in some cases, such as during the George W. Bush administration's budget deficits.
• The stock market, or equity market, is another important financial market, where investors buy and sell shares in corporations.
• The stock market has a longer history than the bond market, dating back to ancient Rome and the Dutch East India Company in the late 1600s.
• Stock markets allow companies to raise capital by issuing new shares or selling existing ones, providing a source of financing for economic growth.
• Stock markets can also serve as an indicator of investor confidence, with rising stock prices often seen as a sign of optimism about the economy and falling prices as a sign of pessimism.
• The stock market is more volatile than the bond market due to the greater risks involved in investing in equities.
• Stock markets have experienced several notable crashes throughout history, including the Wall Street Crash of 1929 and the dot-com bubble burst in 2000.
• Central banks can influence stock markets through monetary policy actions, such as interest rate changes or quantitative easing.
• Regulatory changes, such as the repeal of Glass-Steagall in the United States and the European Union's Markets in Financial Instruments Directive (MiFID), have also had significant impacts on stock markets.

Quotes

“I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter,’ he told the Wall Street Journal. ‘But now I want to come back as the bond market. You can intimidate everybody.”

“When bond prices fall, interest rates soar, with painful consequences for all borrowers.”

“Buying a 100,000 yen bond keeps the capital sum safe while also providing regular payments to the saver. To be precise, the bond pays a fixed rate or ‘coupon’ of 1.5 per cent: 1,500 yen a year in the case of a 100,000 yen bond. But the market interest rate or current yield is calculated by dividing the coupon by the market price, which is currently 102,333 yen: 1,500 ÷ 102,333 = 1.47 per cent.”

“suppose they began to worry about the health of the Japanese currency, the yen, in which bonds are denominated and in which the interest is paid. In such circumstances, the price of the bond would drop as nervous investors sold off their holdings. Buyers would only be found at a price low enough to compensate them for the increased risk of a Japanese default or currency depreciation.”

“bond markets have power because they’re the fundamental base for all markets. The cost of credit, the interest rate [on a benchmark bond], ultimately determines the value of stocks, homes, all asset classes.”

“Or, to reassure the bond market, does it cut expenditures in some other area, upsetting voters or vested interests? Or does it try to reduce the deficit by raising taxes?”

“remember that the interest is paid on the face value of the bond, so if you can buy a 5 per cent bond at just 10 per cent of its face value you can earn a handsome yield of 50 per cent. In essence, you expect a return proportional to the risk you are prepared to take.”

“the state has to pay 50 per cent, then even reliable commercial borrowers are likely to pay some kind of war premium. It is no coincidence that the year 1499, when Venice was fighting both on land in Lombardy and at sea against the Ottoman Empire, saw a severe financial crisis as bonds crashed in value and interest rates soared.”

“the medieval contract known as the census, which allowed one party to buy a stream of annual payments from another.”

“now Rothschild was providing Europe with a new social elite by   raising up the system of government bonds to supreme power . . . [and] endowing money with the former privileges of land. To be sure, he has thereby created a new aristocracy, but this is based on the most unreliable of elements, on money . . . [which] is more fluid than water and less steady than the air . . .32”

“Despite the South’s military setbacks, they retained their value for most of the war for the simple reason that the price of the underlying security, cotton, was rising as a consequence of increased wartime demand. Indeed, the price of the bonds actually doubled between December 1863 and September 1864, despite the Confederate defeats at Gettysburg and Vicksburg, because the price of cotton was soaring.”

“the shortage of cotton also drove up the price and hence the value of the South’s cotton-backed bonds, making them an irresistibly attractive investment for key members of the British political elite.”

“that investors should be able to take physical possession of the cotton which underpinned the bonds if the South failed to make its interest payments. Collateral is, after all, only good if a creditor can get his hands on it. And that is why the fall of New Orleans in April 1862 was the real turning point in the American Civil War. With the South’s main port in Union hands, any investor who wanted to get hold of Southern cotton had to run the Union’s naval blockade not once but twice, in and out.”

“Latin American republics were among the first to discover that it was relatively painless to default when a substantial proportion of bondholders were foreign.”

“It is hard to believe that Gladstone would have ordered the invasion of Egypt in 1882 if the Egyptian government had not threatened to renege on its obligations to European bondholders, himself among them.”

“Bringing an ‘emerging market’ under the aegis of the British Empire was the surest way to remove political risk from investors’ concerns.51 Even those outside the Empire risked a visit from a gunboat if they defaulted, as Venezuela discovered in 1902, when a joint naval expedition by Britain, Germany and Italy temporarily blockaded the country’s ports. The United States was especially energetic (and effective) in protecting bondholders’ interests in Central America and the Caribbean.52”

“By discouraging saving and encouraging consumption, accelerating inflation had stimulated output and employment”

“as inflation has fallen, so bonds have rallied in what has been one of the great bond bull markets of modern history. Even more remarkably, despite the spectacular Argentine default - not to mention Russia’s in 1998 - the spreads on emerging market bonds have trended steadily downwards, reaching lows in early 2007 that had not been seen since before the First World War, implying an almost unshakeable confidence in the economic future.”

3 - Blowing Bubbles

Takeaways

• The Mississippi Company was a joint-stock company established by John Law in 1716 to manage the French national debt and rebuild Paris after a devastating fire
• The company used innovative financial techniques, including the issuance of paper money and the creation of an inflation tax, to pay off the national debt and finance reconstruction projects
• Despite initial successes, the Mississippi Company's operations were marked by fraud and mismanagement, leading to widespread economic instability and a stock market bubble that burst in 1720
• The bubble was fueled by speculation, excessive credit creation, and political instability, as well as Law's own actions, such as the issuance of more paper money and the suspension of gold and silver redemption for paper currency
• The Mississippi Company's collapse had far-reaching consequences, including the abandonment of Law's financial reforms and the onset of a prolonged economic crisis in France that lasted for decades
• The stock market bubble of the late 1990s, centered around companies like Enron and WorldCom, bore similarities to the Mississippi Company in terms of financial innovation, political connections, and eventual collapse due to fraud and mismanagement
• Central bankers, including Alan Greenspan, played a role in fueling the stock market bubble through loose monetary policy, but were unable to prevent its eventual collapse in 2001 due to external factors like the terrorist attacks of September 11, 2001
• The joint-stock company and the stock market remain important financial institutions today, offering both opportunities for wealth creation and risks of market volatility and fraud
• Insurance has evolved as a way to protect individuals and businesses from financial losses, offering various forms of coverage for different types of risks.

Quotes

“The performance of the American stock market is perhaps best measured by comparing the total returns on stocks, assuming the reinvestment of all dividends, with the total returns on other financial assets such as government bonds and commercial or Treasury bills, the last of which can be taken as a proxy for any short-term instrument like a money market fund or a demand deposit at a bank. The start date, 1964, is the year of the author’s birth. It will immediately be apparent that if my parents had been able to invest even a modest sum in the US stock market at that date, and to continue reinvesting the dividends they earned each year, they would have been able to increase their initial investment by a factor of nearly seventy by 2007. For example, $10,000 would have become $700,000. The alternatives of bonds or bills would have done less well. A US bond fund would have gone up by a factor of under 23; a portfolio of bills by a factor of just 12. Needless to say, such figures must be adjusted downwards to take account of the cost of living, which has risen by a factor of nearly seven in my lifetime. In real terms, stocks increased by a factor of 10.3; bonds by a factor of 3.4; bills by a factor of 1.8.”

“It nevertheless remains true that, in most countries for which long-run data are available, stocks have out-performed bonds – by a factor of roughly five over the twentieth century.9 This can scarcely surprise us. Bonds, as we saw in Chapter 2, are no more than promises by governments to pay interest and ultimately repay principal over a specified period of time. Either through default or through currency depreciation, many governments have failed to honour those promises. By contrast, a share is a portion of the capital of a profit-making corporation. If the company succeeds in its undertakings, there will not only be dividends, but also a significant probability of capital appreciation. There are of course risks, too. The returns on stocks are less predictable and more volatile than the returns on bonds and bills. There is a significantly higher probability that the average corporation will go bankrupt and cease to exist than that the average sovereign state will disappear. In the event of a corporate bankruptcy, the holders of bonds and other forms of debt will be satisfied first; the equity holders may end up with nothing. For these reasons, economists see the superior returns on stocks as capturing an ‘equity risk premium’ – though clearly in some cases this has been a risk well worth taking.”

“the Dutch had improved on the Italian system of public debt (introducing, among other things, lottery loans which allowed people to gamble as they invested their savings in government debt). They had also reformed their currency by creating what was arguably the world’s first central bank, the Amsterdam Exchange Bank (Wisselbank), which solved the problem of debased coinage by creating a reliable form of bank money (see Chapter 1). But perhaps the single greatest Dutch invention of all was the joint-stock company.”

“however, the round trip was a very long one (fourteen months was in fact well below the average). It was also hazardous: of twenty-two ships that set sail in 1598, only a dozen returned safely. For these reasons, it made sense for merchants to pool their resources. By 1600 there were around six fledgling East India companies operating out of the major Dutch ports. However, in each case the entities had a limited term that was specified in advance – usually the expected duration of a voyage – after which the capital was repaid to investors.10 This business model could not suffice to build the permanent bases and fortifications that were clearly necessary if the Portuguese and their Spanish allies* were to be supplanted. Actuated as much by strategic calculations as by the profit motive, the Dutch States-General, the parliament of the United Provinces, therefore proposed to merge the existing companies into a single entity. The result was the United East India Company – the Vereenigde Nederlandsche Geoctroyeerde Oostindische Compagnie (United Dutch Chartered East India Company, or VOC for short), formally chartered in 1602 to enjoy a monopoly on all Dutch trade east of the Cape of Good Hope and west of the Straits of Magellan.11 The structure of the VOC was novel in a number of respects. True, like its predecessors, it was supposed to last for a fixed period, in this case twenty-one years; indeed, Article 7 of its charter stated that investors would be entitled to withdraw their money at the end of just ten years, when the first general balance was drawn up. But the scale of the enterprise was unprecedented. Subscription to the Company’s capital was open to all residents of the United Provinces and the charter set no upper limit on how much might be raised. Merchants, artisans and even servants rushed to acquire shares; in Amsterdam alone there were 1,143 subscribers, only eighty of whom invested more than 10,000 guilders, and 445 of whom invested less than 1,000. The amount raised, 6.45 million guilders, made the VOC much the biggest corporation of the era. The capital of its English rival, the East India Company, founded two years earlier, was just £68,373 – around 820,000 guilders – shared between a mere 219 subscribers.12 Because the VOC was a government-sponsored enterprise, every effort was made to overcome the rivalry between the different provinces (and particularly between Holland, the richest province, and Zeeland). The capital of the Company was divided (albeit unequally) between six regional chambers (Amsterdam, Zeeland, Enkhuizen, Delft, Hoorn and Rotterdam). The seventy directors (bewindhebbers), who were each substantial investors, were also distributed between these chambers. One of their roles was to appoint seventeen people to act as the Heeren XVII – the Seventeen Lords – as a kind of company board. Although Amsterdam accounted for 57.4 per cent of the VOC’s total capital, it nominated only eight out of the Seventeen Lords.”

“Between 1929 and 1933, the public succeeded in increasing its cash holdings by 31 per cent; commercial bank reserves were scarcely altered (indeed, surviving banks built up excess reserves); but commercial bank deposits decreased by 37 per cent and loans by 47 per cent. The absolute numbers reveal the lethal dynamic of the ‘great contraction’. An increase of cash in public hands of $1.2 billion was achieved at the cost of a decline in bank deposits of $15.6 billion and a decline in bank loans of $19.6 billion, equivalent to 19 per cent of 1929 GDP.91”

4 - The Return of Risk

Takeaways

• The welfare state was born from the need to provide social safety nets during times of war and economic instability. It has since expanded to cover a wide range of social needs, making governments increasingly reliant on taxes to fund it.
• Governments face growing pressure to provide for an aging population, which is leading to unsustainable debt levels in some countries.
• The increasing frequency and scale of natural disasters and other catastrophic events pose a significant challenge to welfare states, particularly in the United States.
• Hedging, or buying protection against future risks, has become an essential strategy for large corporations and wealthy individuals.
• Derivatives such as futures contracts, options, and swaps have revolutionized financial markets by allowing parties to hedge against price fluctuations and other risks.
• The global market for over-the-counter derivatives is vast, with notional amounts outstanding totaling $596 trillion in December 2007.
• Most households cannot afford to hedge against risks, making them reliant on insurance policies or the welfare state for protection.
• The strategy of borrowing to invest in real estate as a means of saving for retirement has become increasingly popular but is risky and unhedged.

Quotes

“there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.”

“A typical contract in the archives of the merchant Francesco Datini (c. 1335-1410) stipulates that the insurers agree to assume the risks ‘of God, of the sea, of men of war, of fire, of jettison, of detainment by princes, by cities, or by any other person, of reprisals, of arrest, of whatever loss, peril, misfortune, impediment or sinister that might occur, with the exception of packing and customs’ until the insured goods are safely unloaded at their destination.13”

“Japan in the 1930s became a garrison state.43 But it was one which carried within it the promise of a ‘warfare-welfare state’, offered social security in return for military sacrifice.”

“armed with an AK47 - a gift from Fidel Castro, the man he had sought to emulate. As the tanks rumbled towards him, Allende realized it was all over and, cornered in what was left of his quarters, shot himself.”

“What had begun as a system of large-scale insurance had simply become a system of taxation, with today’s contributions being used to pay today’s benefits, rather than to accumulate a fund for future use. This ‘pay-as-you-go’ approach had replaced the principle of thrift with the practice of entitlement . . . [But this approach] is rooted in a false conception of how human beings behave. It destroys, at the individual level, the link between contributions and benefits. In other words, between effort and reward.”

5 - Safe as Houses

Takeaways

• Financial illiteracy is rampant, but people have a good understanding of real estate markets and believe that property is a safe investment.
• The belief in real estate as a reliable investment has led to housing bubbles around the world, including in Glasgow and Detroit.
• Microfinance institutions have found that women are better credit risks than men, even without collateral.
• Microfinance can help lift people out of poverty, but it is not a complete solution and some institutions charge exorbitant interest rates.
• The key to financial security is having a diversified portfolio of assets and avoiding excessive debt.
• Globalization has led some countries, including the United States, to ignore these rules and rely too heavily on real estate as an investment, leading to bubbles and subsequent crashes.

Quotes

“Mortgages were short-term, usually for three to five years, and they were not amortized. In other words, people paid interest, but did not repay the sum they had borrowed (the principal) until the end of the loan’s term, so that they ended up facing a balloon-sized final payment. The average difference (spread) between mortgage rates and high-grade corporate bond yields was about two percentage points during the 1920s, compared with about half a per cent (50 basis points) in the past twenty years.”

“And from 1966, under Regulation Q, there was a ceiling of 5.5 per cent on their deposit rates, a quarter of a per cent more than banks were allowed to pay.”

“Some S&Ls bet their depositors’ money on highly dubious projects. Many simply stole it, as if deregulation meant that the law no longer applied to them.”

“bear in mind when trying to compare housing with other forms of capital asset. The first is depreciation. Stocks do not wear out and require new roofs; houses do. The second is liquidity. As assets, houses are a great deal more expensive to convert into cash than stocks. The third is volatility.”

“tranches”

“The subprime butterfly had flapped its wings and triggered a global hurricane.”

6 - From Empire to Chimerica

Takeaways

• The global economy experienced robust growth from 2003 to 2008, driven in part by the rapid expansion of China and other emerging economies.
• This economic boom was fueled by a savings glut in Asia, particularly China, which led to large capital inflows into the United States.
• The United States used this capital inflow to finance its consumption and debt-financed expenditures, leading to a surge in borrowing and spending.
• The rapid growth of the Chinese economy was driven by private entrepreneurship within a state-controlled system, as well as exports to the United States and other markets.
• The relationship between China and the United States, which came to be known as "Chimerica," created a symbiotic relationship between the two economies but also raised concerns about fair competition and currency manipulation.
• The financial crisis of 2007-2008 was triggered by defaults on subprime mortgages in the United States, which led to losses on complex financial instruments and a freeze in interbank lending.
• The crisis spread to other financial institutions and markets around the world, leading to significant economic downturns in many countries.
• China was not immune to the effects of the crisis, but its large reserves of foreign currency allowed it to intervene in global financial markets and stabilize some institutions.
• The relationship between China and the United States became strained during the crisis due to concerns about fair competition and currency manipulation, raising fears of a potential breakdown in their economic relationship.

Quotes

“the crisis prompted the issue of emergency paper money: in Britain, £1 and 10s Treasury notes; in the United States, the emergency currency that banks were authorized to issue under the Aldrich-Vreeland Act of 1908.46 Then, as now, the authorities reacted to a liquidity crisis by printing money.”

“There may be a lesson here for our time, too. The first era of financial globalization took at least a generation to achieve. But it was blown apart in a matter of days. And it would take more than two generations to repair the damage done by the guns of August 1914.”

Afterword: The Descent of Money

Takeaways

• Financial history can be understood through an evolutionary lens, with financial organisms competing for resources and adapting to their environment.
• The evolution of financial institutions has seen a process of speciation, where new types of firm emerge, as well as extinction, with weaker firms dying out.
• Financial crises are endogenous shocks, caused by the inherent risks of the financial system and the interaction between financial and real economies.
• Regulatory changes can have unintended consequences, altering the competitive landscape and potentially thwarting the evolutionary process.
• The possibility of extinction is an essential part of the financial ecosystem, allowing for creative destruction and the emergence of new forms of financial institution.
• Understanding the origin of financial species is crucial to comprehending the fundamental nature of money and its role in valuing ourselves and the world around us.

Quotes

“It is not the fault of the mirror if it reflects our blemishes as clearly as our beauty.”

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