Along my journey to improve my economic education, I have mainly been listening to American individuals like Peter Schiff and Max Keiser, but I have also stumbled onto individuals in europe who also saw and warned of the upcoming collapse, like Irish economist David McWilliams [youtube], British Conservative Party MP Daniel Hannan [youtube], and British UK Independence Party (UKIP) MP Nigel Farage [youtube]. My favourite European economist is Niall Ferguson, who is a Scottish professor that has taught in the University of Oxford, Harvard University and London School of Economics. He studied international, imperial, and economic history and did his PhD thesis on the hyperinflation of Germany in the 1920s. For more of his biography, please visit Wikipedia, Channel 4 or PBS.
The first videos I saw of him included the discussion of his books ‘Empire’ and ‘The Pity of War’, but the one that hooked me to him was the video below in which he discussed the recent financial meltdown.
I soon discovered that he turned his 2007 book ‘The Ascent of Money: A Financial History of the World’ into a six-part TV series airing on Channel 4 in the UK and PBS in the US [youtube, torrent]. I found the series quite enlightening as episode 1 goes through monetary history, episode 2 discusses the bond market, episode 3 goes into stock market booms and busts, episode 4 goes discusses the insurance industry, episode 5 goes through the mortgage market and the recent bundling of them for worldwide sale, and episode 6 discusses the economic marriage of China and America since the 1990s, which Niall refers to as ‘Chimerica’. PBS has the series as a four-part series, as well as having an hour live Q&A webinar with Niall in November 2009 [download]. For those who may not have the time for the over 4-hour series, PBS has created a 2-hour edition, The Royal Society for the encouragement of Arts (RSA) has an 19-minute presentation as well as a 26-minute Q&A session (both seen below), and Niall does summarize the 6 topics of the series in an 8-minute summary during the webinar [13:29-21:33].
He has recently been talking about currency wars and most people can easily see the huge swings in the value of currencies against each other since the collapse of 2008. I had been paying attention to the exchange rate between the US and Canadian dollars since they went 1 to 1 for the first time in 2007, but I never thought to delve into finding out what decides the value of a currency. In a currency war, various currencies like the US dollar, are devaluing themselves by money printing and having low interest rates, which exports inflation to other pegged-currencies like the Chinese yuan, as well as causing hot money (money that flows regularly between financial markets as investors attempt to ensure they get the highest short-term interest rates possible) to travel into currencies that choose not to devalue. But these currencies that don’t devalue begin to have a huge flow of capital into them, which ultimately they cant control, resulting in the devaluing of the currency. So the result of the war is that currencies are fighting to devalue themselves until they reach their true worthless value of zero. The most recent victim has been the Swiss Franc, as the Swiss National Bank (SNB) decided to peg itself to the Euro, which resulted in a devaluation of the Franc by around 10% and it loosing its safe heaven status. The Swiss Franc was the last currency to depeg itself from gold since 1971 and only did so in 2006 in order to join the IMF. Well Jim has been working on a book entitled ‘
