“Lords of Finance” (Liaquat Ahamed)

'Lords of Finance' a book dedicated to the world of finance.

‘Lords of Finance’

“…the vintage of history is forever repeating…” (E.A Bucchianeri)

You would hope that our great leaders would take time to look back at history to avoid falling into the pitfalls their predecessors did, however, this would not appear to be the case.

When the financial crisis hit the world it was as if nothing like this had happened before and therefore no one could see it coming. Despite this, the parallels that link the colossal breakdown of world economies to the build up of the Great Depression in the 1920’s are overwhelming so why is it only Liaquat Ahamed seems to be able to link the two?

Who is Liaquat Ahamed?

He is a professional Investment Manager with 25 years experience and holds economic degrees from both Harvard and Cambridge. A very intelligent man who has reconstructed the past so we can see how it relates to the present.

Calamity has now struck world economies twice but what did happen back in the 1920’s?

Four Nations, Four Men; trying to succeed in keeping their countries afloat during a troubling time after WW1. Each had their own problems which stemmed from this World War; Germany owing funds to other nations following their actions; France, the UK and the US hit by the cost of the war efforts. These four countries were the main economies across the world and therefore if they were struggling what happened to the rest?

This narrative draws upon those four nations throughout their troubles and watches closely how they try to resolve them. From playing with inflation, deflation, hyperinflation, exchange rates and the Gold Standard we relive the turmoil and the conflicts that take place; the disagreements caused by the resolute nature of the people involved.

We can see a pattern emerging – both the Great Depression and the Financial Crisis of recent years started in the US, both lead to a Wall Street Crash and both led to a shortage of money across the world. So why didn’t people see this latest fiasco coming? Is it because no-one can truly predict the future and whilst there are common elements to both there are also some striking differences to consider?

In the 1920’s it is the decisions made by a small number of central bankers that caused the financial meltdown, the effects setting the stage for WWII and future decades. What this does highlight is that everyone is fallible, no-one has a crystal ball to be able to see how their choices will take effect. Therefore, can blame be assigned to just four individuals?

Knowledge of economics is not required to read this novel as Liaquat has written with everyone in mind. Reading this you immerse yourself into history and can begin to see the world through their eyes and how, for their nations, they tried incessantly to make every decision count in a positive manner.

This novel provides a great insight not just into the years leading up to the Great Depression but also into the Financial Crisis that still effects us today.

As Ben Bernanke of the Federal Reserve stated “if you want to understand the financial crisis (2007-2010) you should read this book”.

Gaining several awards this narrative is highly respected and considered a true representation of the catastrophe leading to an event in history that all have heard about, if not read about.

One thing is clear, as George Santayana the 19th Century Spanish Philosopher said “…those who cannot learn from history are doomed to repeat it”.

Final Thoughts on Lords of Finance

Would I recommend Lords of Finance? Definitely, but don’t expect to be able to read this over a weekend. You will need time to digest the information.  

The men that represented the four great economies of the 1920’s include:

Montagu Norman - The Bank of England, part of the Lords of Finance during an age of crisis

Montagu Norman – The Bank of England

Benjamin Strong Jr., Lord of Finance

Benjamin Strong Jr. – New York Federal Reserve

 

Emile Moreau - Banque de France, Lord of Finance

Emile Moreau – Banque de France

(Hjalmar Schacht - Reichsbank) Lord of Finance

Hjalmar Schacht – Reichsbank

Throughout all events of the 1920’s the great economist, John Maynard Keynes, is present expressing his thoughts and opinions. If his theories had been considered at an early stage this catastrophe may have been deflated.

John Maynard Keynes had much to say on the Lords of Finance

John Maynard Keynes

Have you read the ‘Lords of Finance’ or any other books relating to this topic?  We would love to hear what other titles we should be reviewing.

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