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The End of Alchemy

Money, Banking, and the Future of the Global Economy
Written by: Mervyn King
Narrated by: Greg Wagland
Length: 14 hrs and 3 mins

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Publisher's Summary

Something is wrong with our banking system. We all sense that, but Mervyn King knows it firsthand; his 10 years at the helm of the Bank of England, including at the height of the financial crisis, revealed profound truths about the mechanisms of our capitalist society. In The End of Alchemy, he offers us an essential work about the history and future of money and banking, the keys to modern finance.

The Industrial Revolution built the foundation of our modern capitalist age. Yet the flowering of technological innovations during that dynamic period relied on the widespread adoption of two much older ideas: the creation of paper money and the invention of banks that issued credit. We take these systems for granted today, yet at their core both ideas were revolutionary and almost magical. Common paper became as precious as gold, and risky long-term loans were transformed into safe short-term bank deposits. As King argues, this is financial alchemy - the creation of extraordinary financial powers that defy reality and common sense. Faith in these powers has led to huge benefits; the liquidity they create has fueled economic growth for two centuries now. However, they have also produced an unending string of economic disasters, from hyperinflations to banking collapses to the recent global recession and current stagnation.

How do we reconcile the potent strengths of these ideas with their inherent weaknesses? King draws on his unique experience to present fresh interpretations of these economic forces and to point the way forward for the global economy. His bold solutions cut through current overstuffed and needlessly complex legislation to provide a clear path to durable prosperity and the end of overreliance on the alchemy of our financial ancestors.

©2016 Mervyn King (P)2016 Audible, Inc.

Critic Reviews

"Mervyn King may well have written the most important book to come out of the financial crisis. Agree or disagree, King's visionary ideas deserve the attention of everyone from economics students to heads of state." (Lawrence H. Summers)

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  • Philo
  • 13-07-16

Two books in one, both very fine

A note added Nov. 2019, on a second listening: this book, particularly the first 60 percent of it, is one of the most clear and informative books on anything I have ever read. In particular, it tells in plain language, yet with great depth and elegance, what, in a world of an unknown future, finance does for us, and further, how money and banking (as now managed, imperfectly) facilitate this, and (sometimes dramatically) fail to facilitate this. Nobody has ever described finance this well for me. This book, some years post-release (and after such events as Brexit, Trump's election, and the recent fractures in global trading), wears well, being pretty timeless in approach. Nothing like the solutions the author suggests in the later parts of the book, has occurred. We remain vulnerable to the problems he pointed out so lucidly. My original review follows.

Here we have a tutorial on basics of money, banking and (some) finance, and their history. All the contemporary terminology is neatly fit into the explanations. It is a great way to become widely literate and current on this. Secondly, having educated and briefed the audience, the author shares his proposal to replace the overall central banking LOLR (lender of last resort) model (dating back at least to Walter Bagehot in his book 'Lombard Street' (available here), and the origins of modern central banking), with a PFAS (pawnbroker for all seasons) model. This in effect forces a kind of insurance premiums or pre-haircuts to be baked into credit deals from the start, to pay when they default en masse as they did in '08. I have seen this model criticized, as blocking the wild experimental quality of capitalism. But it is a great try and at least a start at remodeling the system so we won't have our overall financial system keep working in straightened times as an emergency insurer after the fact (after a financial collapse), charging ex post premiums back to us peasants for decades to come, while the fat cat bankers get bailed out (as the popular trope goes), and party on, with no fundamental fix to this model offered, to date. (Let me pause and say I do see some virtues in Dodd-Frank. I believe it goes some length toward reducing the frequency and depth of these problems.) Bravo for a very interesting read, and something to be pursued. This is the first Great Recession book (of dozens I have seen, most of the major titles) where anyone has bothered to propose any sizeable substantive changes. This deserves more workup. Very enjoyable and I expect to listen through again.

6 people found this helpful

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  • John
  • 04-11-16

Educational and thought provoking

Very educational and thought provoking book. Mervyn King's audience here is anyone who not only wants to understand what happened during the financial crisis, but wants to better understand why it happened and what needs to change to prevent another. Thankfully, this isn't a book about finger pointing.

2 people found this helpful

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  • Inuwa Shehu Mohammed
  • 20-09-19

A good look at the crisis and what to do

This is my second reading. End of Alchemy is one of the most important books I have read. It is a very serious work from an honest and experienced practitioner that has seen pretty all.

I hope that we ride the Audacity of pessimism to Uhuru.

Well done and thank you Sir Mervin King.

1 person found this helpful

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  • Warren
  • 17-12-16

Interesting but dry

Good summary and explanation of central bank purpose and function and rational supporting the policy.

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  • Maine Dave
  • 07-07-19

Diagnosis and possible cure for financial ills

Like most business men who write books, the author uses too much repetition (useful when running an organization, not so much to an audience of one listening to or reading a book). But, unlike many a tale of challenge and conquest in the worlds of business or finance, this author offers a well thought out solution to the macro management of money and of financial booms and busts. Highly recommended for that reason alone. I found the high level and highly informed perspective on banking and finance and its inevitable role in booms and busts to be both illuminating and well reasoned. Given his radical proposals for reforming banking and finance, I'm sure he did not endear himself to his peers, most of whom, well positioned in that world, would rather that the ground did not shake beneath their chairs.

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  • Amazon Customer
  • 31-01-19

better to read than to listen.

An interesting book which is spoilt by a somewhat mechanical treading. It sounded a little as if it was being read by Microsoft's Narrator.

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  • K. Linzey
  • 10-01-19

Insightful

I just wish our global politicians have the will and the courage to take action as outlined in this book.

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  • Orlando O'Neill
  • 05-12-18

Too dense for audiobook

I think the book has interesting ideas and perspectives on the 2008 financial crisis, but it’s really hard to grok those ideas as an audiobook. This is a book I wish I had read instead of listened to.

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  • zach van der most
  • 02-10-18

must read

it's dense but so are the problems he's conveying. He does an especially good job of stating complicated financial ideas in layman's terms.

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  • A M
  • 21-09-17

Great Macro Knowledge

Really enjoyed it. Great for histroic knowledge.

You have to be interested in banking to really understand it. I will be reading it again for sure.

Recommended for anyone in Banking, or Finance or government. No matter how well you prepare for the future no1 really knows.

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  • Cedric Hodges
  • 04-06-18

Well worth a listen

The main strength of this book was the sense of history that it's author posses.

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  • steve
  • 23-04-18

A good book, but maybe not the best format.

I appreciate this book and the ideas in it but it has a lot of digressions, historical examples etc. and so it can all become a bit of a blur if you're looking for a book to listen to while doing something else.

The ideas aren't complicated or hard to understand but there is just such a volume of stuff around them that it sometimes gets difficult to keep track of the point the author is making. I was doing some simple activities while listening and found I would get lost in the details and lose the main thread of the ideas. I think this is a fault of the book itself rather than me just being too dumb or inattentive (although all dumb, inattentive people probably think that!).

If you're interested in finding how money and banking work then give it a go. Maybe you're smarter than me!

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  • Thomas
  • 03-04-17

a must read. objective, neutral, informative.

finally a book which seems not have the purpose to sell more books but is trying to give an objective view and to inform.
unlike others, there is no judging, no finger pointing.
very well written and preformed.

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  • Jules
  • 28-03-17

Complexity made easier to understand

Explanation and arguments finely balanced between complete novice and professional levels. subtle humour in what is often a dry topic.