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Lords of Finance

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Lords of Finance

The Bankers Who Broke the World

Penguin Group (USA),

15 min read
10 take-aways
Audio & text

What's inside?

Bad luck did not cause the Great Depression. Four people were largely responsible for the era’s greatest economic crisis.

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Editorial Rating



  • Innovative
  • Applicable


Who would have thought that a study of central bankers could be a page-turner? Investment manager Liaquat Ahamed spins a fast-moving yarn about central bankers’ disastrous monetary policy decisions in the 1920s and early 1930s. The story itself yields little suspense – you already know how it ends, but Ahamed uses thorough research and gripping detail to paint a complete picture of how the world economy collapsed. The Great Depression preceded today’s credit default swaps, collateralized mortgage obligations and arcane derivatives, so the book’s lessons for the modern crisis are mostly as referential cautions. getAbstract recommends this absorbing book to readers who want a deeper understanding of the gold standard, and the events that led to – and out of – the biggest economic crisis of the 20th century.


A Manmade Depression

The 1920s and 1930s were a time of bust, boom and bust. Massive unemployment was common; stock markets and currencies crashed, soared and crashed again. For a time, Germany’s currency became so valueless that consumers shopped with wheelbarrows of cash. US banks were so untrustworthy that many people buried their cash in their yards. The nadir came in the early 1930s, the depths of the Great Depression, which people now mistakenly see as the inevitable result of an unfortunate confluence of events. In truth, the Depression was the direct result of poor decisions by the central bankers of the four great powers of the time: the US, Britain, Germany and France. They cut rates when they should have raised them and froze when they should have acted. They stuck with the gold standard long past its time. These bankers sometimes acted out of foolishness or ignorance, but their misguided policies led directly to the Depression.

The story of that global economic collapse is tied in no small part to the gold standard, a bit of orthodoxy that central bankers clung to fervently. It linked a currency’s value to a corresponding amount of gold. A dollar was worth...

About the Author

Liaquat Ahamed has been a professional investment manager for 25 years. He worked for the World Bank, and now advises hedge funds and serves as a Brookings Institution board member. He holds economics degrees from Harvard and Cambridge.

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