This time i have attempted a book review of a classy book in the field of Finance. Although i am not a typical finance guy, i have made efforts to understand the financial history of the world. Niall Ferguson has written a brilliant book exploring the historic nexus between money, diplomacy, warfare and globalisation. It's called The House of Rothschild: The World's Banker 1849-1998. His new work, The Ascent of Money, written 10 years later, is an altogether different beast. From its opening sentence - 'Bread, cash, dosh, dough, loot, lucre, moolah, readies, the wherewithal: call it what you like, money matters' - you know this is a TV tie-in. The Ascent of Money is an account of 'moolah' from the Incas to the credit crunch and, with it, an argument for the centrality of finance to all elements of human history. With typical bravado, the thesis is modelled on Jacob Bronowski's masterful series, The Ascent of Man, with Ferguson positioning financial markets as 'the mirror of mankind', magnifying back to us our values, weaknesses and psychoses. This virtuous journey is presented to the reader in a barely concealed TV-script format, with all the tropes that discipline demands: the notion of secret discovery ('Behind every great historical phenomenon there lies a financial secret'); the importance of journey ('Read this book and you will understand why... '); the ever shorter, more emphatic sentences and the need for visual scene-setting. There is also a curious, irksome desire to refract the past through the personal: Ferguson's upbringing in Glasgow, his Calvinist heritage and early love of westerns all pepper the narrative.

1. A Book review of:
The Ascent of Money –
A Financial History of the World by Niall Ferguson.
By:
Jay Shah,
FMS-B, The M.S.University of Baroda.

2. About the author:
- Niall Douglas Ferguson is a British citizen.
- He is Professor at: Harvard University,
Stanford University, Oxford University,
London School of Economics.
- His areas of expertise are international
history and economic history.
- Named among 100 most influential people
in the world by Time Magazine.
- His other literary works inculde Empire: How Britain Made the
Modern World and Civilization: The West and the Rest.

3. - 'Bread, cash, dosh, dough, loot, lucre, moolah, readies, the
wherewithal: call it what you like, money matters'
- The book has six chapters: Dreams of Avarice, Of Human Bondage,
Blowing Bubbles, The Return of Risk, Safe as Houses and From Empire
to Chimerica.
- The Spanish history of Gold & Silver is cited and the contribution of
Francisco Pizzaro in Spain’s recession is also mentioned.
- Lesson that Money is worth upto that much level upto which the
other person is ready to exchange it.
- Mesopotamian financial history is explained with the example of
clay tablets.

4. - There were 7 modes of payments prevailing in Italy. At that time, the
Chinese financial system was already modernized.
- He explains the working of Roman financial system and European
financial system.
- Shylock, the most notorious money lender of Venice.
- Jews could charge interest on their loans while the Christians
couldn’t do such.
- Christian law did not allowed them to charge interest but it was later
on decided by the people not to follow this law.

5. - Infact Jews were also allowed to lend money to the christians but
Jew brothers.
- The returns on the money lended in Glasgow were humongous.
- The emergence of Medici family as key
Financial service providers in Italy.
- Medici were famous for: creative accounting,
Commercial bills, multiple currency involvement,
Decentralization, inter-locking partnerships.
- It has been depicted that USA has been built on borrowed money.

6. - The people of Memphis and how easily they declare bankruptcy.
- The federal law of USA allows people to learn from their error. The
concept of “Today’s bankrupt maybe tomorrow’s billionaire”.
- 363 Rule: You pay 3% of your deposit, collect 6% of the loan and go
to golf court by 3pm.
- The emergence of bond market as a result of wars.
- In Italy, the citizens were obliged to lead money to their Govt. on
interest rather than paying taxes to it. Here comes the concept of
“Liquid Assets”.

7. - The dominance of Rothschild is also mentioned. In 19th Century,
Nathan Rothschild became the Gold collector for British Army
at commission.
- The deliberate use of cotton bonds or keeping cotton as collateral by
Amsterdam.
- Cotton crisis and thus introduction of Sinking Funds.
- Next was the introduction of printed paper during civil war, USA.
- Bond market either makes or breaks govt.
- The success way of Bill Gross, CEO, Pimco.

8. - Showcasing the example of Argentina for explaining financial
mis-management losses.
- Prices of commodities changed 3-4 times in Argentina.
- The fraudulent case of Ken Lay, Enron.
- Discussion on Govt Bonds vs. Private Bonds and thus emergence of
Joint Stock Company.
- Dutch people and their idea of East India Company to create
monopoly in spices from Asia to Europe. World’s 1st MNC.

9. - The insurance bubble failure during the post-Katrina hurricane
in USA.
- Robert Wallace and Alexander Webster came up the Insurance Fund
for the 1st time in the history.
- How premium payments method was developed in Scotland for the
widows and the children.
- Japanese slogans: “All people are soldiers” to
“All people must be insured” to
“All people should have pensions”.
- The state payments philosophy in Japan.

10. - Milton Friedman’s Quantity theory of money.
Money Supply (M) x (V) Velocity of circulation =
Price level (P) x (Q) Quantity of Expenditure.
- Friedman suggested Chile Govt. to introduce pension system to
solve the problem of inflation. Private Pension Plan system.
- Concept of Hedging funds.
- Concept of Options.
- Concept of Derivatives. (Double edge sword)
- The property bubble and its linkage with political power.

11. - The Ford Motor company employment problem.
- US Govt Housing Program.
- Red Lining technique to segregate people.
- NINJA Loans concept.
- Concept of securitization.
- Concept of collateral.
- Concept of sub-prime country, ex: Argentina.
- Concept of Micro-finance.

12. - “Dual country” concept that he calls “Chimerica”.
- “The East Chimericans did the saving. The West Chimericans did the
spending.”
- Our increasingly sophisticated finance clearly contains self-
destructive tendencies.

13. - The story is simple yet complex to understand.
- Not much technical financial aspects explained.
- Slow pace of the story and mundane in between.
- More emphasis on the ancient time could have been given.
- Very skillfully explained examples of the past and emergence
of concepts.
- Majorly all the financial bubbles are covered.
- Language and the vocabulary used is easy to understand.
Suggestions and opinions:

14. For suggestions & feedback:
My mail id: jayshah316@gmail.com
LinkedIn id: jayshah316@gmail.com
Tweet using @jayshah316
Website: jayshah.branded.me

15. Thank you!