Casino Capitalism covers the international economic and financial situation in 1970’s and a980’s.
The analysis and suggestions in this book are as valid, probably more, than they were then.
At one time, banks lent money, which was trusted to them by working people. Banks were trusted establishments and never got involved in “derivative market operations”.
ING’s (founded by the Dutch) suffered huge losses due to one trusted employee, who got involved in very questionable “derivative” speculations and caused huge losses.
Today, every major bank is in the “derivative” market. It is profitable when people with good judgement and knowledge manage such departments.
This book claims that mismanagement policies of money and credit created more problems than trade protection, which many western industrialized countries pursued especially for Third World countries thus causing high unemployed.
In the author’s view, all banks everywhere should be prohibited from participating in “derivative” markets.
The American economy and banks, being less controlled by governments, causes wild swings of the American dollar that serves as the reserve currency of many countries.
This led to the creation of the Euro, a view some economists challenged.
The repeal of the “gold standard” by the American secretary of the treasury under Nixon led to high prices of oil and supported the dollar, but it created huge surpluses in the treasuries of many Arab countries; the funds were repatriated in the U S A as capital and to buy assets.
The author is a Keynesian. Keynes, an English economist and inventor of the eponymous theory, believes that during recessions the governments must step in and support the aggregate economy with infrastructure projects. These in turn will create employment and help the economy recover faster than it would otherwise.
This theory advocated mixed economy policies and soonomists rather than pure capitalism, which believe that markets correct them all the time.
Her explanation of the basics of speculative markets versus supply and demand laws should help small investors understand the major difference between the two and help them make investment decisions accordingly.
She correctly points out that devices and techniques that convey instant information to a large number of investors makes for world market volatility.
An excellent book, every large, or small investor should study, but more importantly, government agencies in charge of regulating markets.