Book Recommendations

Good fortune is good in-laws 🙂  I’ve had a little more time to read in the last few months (courtesy of the aforementioned in-laws).  I figured I’d share.  Forgive any typos below – this small laptop keyboard and my machine gun typing style don’t go so well together.

Strongest recommendation would be “Biggest Bluff” and then the combo of “Alchemy” and “Trade Wars.”   The MMT book is less consistently strong, but worth it for its first few head-exploding chapters.

BIggest Bluff:  Psychology PHD turned New Yorker staff writer with no poker experience decides to try and play in the world series of poker in one year.  The book itself is much less about poker than about life, risk, etc.  Great meditation on a lot of elements that also touch on investing.  Found its really helped me feel OK with sitting out the last few months in particular so timely.  Very readable.

I’m going to present the next three books in the order that I read them because they ended up layering nicely on each other.

The End of Alchemy:  Books saying the world has become imbalanced and we are all headed for a big reckoning are a dime a dozen.  Usually written by some tinfoil hat crank.  They are almost never well researched, reasonable, carefully argued thoughts from the retired head of the Bank of England (Meryvn King).  THis book gave me “permission” really start worrying about stuff.   t is skimmable in places, but very readable and an excellent macro 101 piece too if your last money and banking class was back in college.

Trade Wars are Class Wars:  Ignore the title, it is not a political polemic.  It is an extremely readable look at how international trade imbalances and domestic income imbalances are driving the world economy in a can’t-go-on-forever unsustainable direction.  Most refreshing is that the US ends up almost a passive victim in this telling – “forced” to over-consume and over-borrow by the surplu-producing Chinese and Germans and wealthy elites).  THis follows on from King’s book and points you to where the imbalances are building.  THey pull their punches a bit about how it all unwinds (one author teaches in China and I guess wanted to keep his job), but it clearly doesn’t unwind well for anyone.

The Deficit Myth:  Written by the main proponent of MMT economics.  Guaranteed to change how you think about money, deficits, the economy, stimulus, the role of government, etc.   You may not necessarily agree with her and there is way too much not-as-well-supported policy commentary mixed in. But there are some real Plato’s cave moments in here too.  And explains the (valid) core argument of MMT, which is that the ONLY things that matters is the real economy’s productive capacity. “Money” per se doesn’t really matter.  Milton Friedman said “Inflation is always a monetary phenomenon.”  MMT turns that on its head to say “Inflation is always a real economy productive capacity phenomenon.”  Outside of true Weimar Germany Zimbabwe style money printing hyper inflations, that MMT formulation seems like a much more useful construct for looking at the world.  You probably won’t agree with some of her policy suggestions.  But you really will never look at the (economic) world the same way again.  Extremely readable too.

I have this book teed up for when I get home.  Meryvn King (BofE) and John Kay (FT).  Argues against the increasing tendency to equate “risk” with “volatility” in financial markets.  After that I’m not sure where it goes but Mervyn King is a smart guy so….

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