Book Review: Broken Money by Lyn Alden

I really enjoyed reading the first 2/3rd of the book. The last 1/3rd deals with cryptocurrency and bitcoin – I didn’t have enough of a background context or familiarity to grasp these chapters. I will re-read this section again in the near future.

The first 2/3rd of the book deals with history of money and the technological changes that led to a difference between speed of transaction and speed of settlement and the operational implications of this gap.

The book answers a lot of questions such as

1. Why did Gold and Silver became the universally adopted currencies ?
2. Why did we need both Gold and Silver ? And why today Silver isn’t considered as hard money as Gold ?
3. Why commodity money only works well when trading partners are at the same technological level?
4. Why the vector tech and banking innovations meant that a move away from the gold standard was inevitable?
5. How is money created in our fiat / central banking system ?
6. How did the dollar become the reserve currency of the world ? And what are the dangers of having a lot of your liabilities denominated in dollars?
7. Why the reserve currency status of the dollar is a double edged sword for the US ?
8. Why didn’t money printing cause retail inflation in 2008 while it did in 2020 ?
9. How low interest rates, higher money supply and monetization of deficit have introduced noise in price signals?
10. Why increasing rates is less effective or even counterproductive to combat inflation which emerged due to monetization of fiscal deficit ?

Lyn Alden explores these and many other questions using a systems view lens.

Recommended reading. 8/10

Looks like a turn around based on QoQ data. Any views from someone who’s been following this for a while? Thanks.

Ok, Understand … update the sheet afterwards.