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The End of Alchemy: Money, Banking, and the Future of the Global Economy

4.13  ·  Rating details ·  1,181 ratings  ·  113 reviews
Something is wrong with our banking system. We all sense that, but Mervyn King knows it firsthand; his ten 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, ...more
Hardcover, 430 pages
Published March 21st 2016 by W. W. Norton Company
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4.13  · 
Rating details
 ·  1,181 ratings  ·  113 reviews


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Athan Tolis
Mar 15, 2016 rated it it was amazing
Stop what you’re doing, drop everything, buy and read this book. Twice. I’ll start my second reading as soon as I’m done writing down my thoughts.

I’d gladly swap all ten books I’ve read about the crisis (“mine” at ten) for this modest and mischievous masterpiece.

Mervyn King does not go looking for villains or victims here. You will not find the words “greed” or “fear” in this text, nor do you get any history recounted, unless it is to illustrate a point. What you get is an informal, comprehensiv
...more
Domhnall
May 01, 2016 rated it it was amazing  ·  review of another edition
Shelves: economics
‘For centuries alchemy has been the basis of our system of money and banking. Governments pretended that paper money could be turned into gold even when there was more of the former than the latter. Banks pretended that short term riskless deposits could be used to finance long term risky investments. In both, cases the alchemy is the apparent transformation of risk into safety. … For a society to base its financial system on alchemy is a poor advertisement for its rationality. The key to ending ...more
Mehrsa
Jun 23, 2016 rated it really liked it
King could not have had better view of the banking sector for the past several decades and if you haven't read an analysis of the crisis, this would be the one to read. It's not just that though. He also covers the basics of money, banking, and central banking. The premise is that though we seem to know capitalism well, we don't quite understand money and banking. In fact, the field of economics has stopped talking about it altogether. King wades in as a clear thinking guide. It will likely tak ...more
Marks54
Sep 14, 2016 rated it really liked it
Somebody wise once advised me to read books in clusters that were somewhat but not completely related. Given the proliferation of books about the financial shocks of 2007-2008 and following years, that seemed like good advice and that is why I have read this in conjunction with Stiglitz's book on the Euro. Both are excellent and well written books that do a wonderful of communicating some complex issues and convoluted fact patterns.

King is the former head of the Bank of England and addresses the
...more
Diego
Nov 11, 2017 rated it it was amazing
Mervyn King has the experience to back up his theories regarding the cause for the global recession and potential solutions for the future success in global banking. Being the former governor for the Bank of England, he has a view that is lacking from most books on banking. Most books focus on the issue in Wall Street only, but the issue and impact is worldwide. He discusses the problems in the European Union with a common currency and other members’ debt. Sounds as though much of their issue is ...more
Pedro L. Fragoso
I’ve been a frequent reader of books about our current financial predicament, which entered into high gear in 2007/8. Prof. Michael Hudson’s “Killing the Host” was and still is the best of the lot, but the books by James Rickards and Varoufakis’ “And the Weak Suffer What They Must?: Europe's Crisis and America's Economic Future” were also particularly remarkable. There were a number of others (and more in the reading list, even if right now my priority is travelling to the moon and accompany the ...more
Tuncer Şengöz
Aug 11, 2018 rated it it was amazing  ·  review of another edition
Shelves: finance
One of the best books on money, banking system, economic crises, and central banks, I have read recently. It took only one week to finish the book, though I read some paragraphs twice to grasp the idea. Yet this book is worth reading twice.
Ayoub Makroz
Aug 02, 2018 rated it it was amazing  ·  review of another edition
Great book from Mervyn King, ex Bank of England governor. His main idea is that the magic of finance is governed by four main ideas : Radical uncertainty, disequilibrium, the prisoner's dilemma and trust. He also gives potential solutions to the stagnation of the world economy
Mbogo J
Jan 29, 2018 rated it it was amazing  ·  review of another edition
A full library has been created out of the 08/09 global financial crisis. The books might differ in content and in prose but they all have a unifying theme. Blame game. There are those that blame Wall Street's greed and the folly of human nature, some blame regulators for being too lax and the tragedy of repealing the Glass-Steagall Act, others just blame the effects of too much debt... This book is not numbered among them.

If you want to understand the financial crisis and the general underpinni
...more
Tariq Mahmood
Dec 02, 2016 rated it really liked it
Shelves: economy, history
The author has produced a very pessimistic view of the current state of economy before and after the great credit crunch of 2008. If the then Governor of Bank of England has categorised the western economy as inherently at fault than more doom and gloom is certainly on its way. The Far Rights slowly taking over power in the western world should start addressing these issue instead of blaming the Immigrants for somehow creating the current glum before their public really start to lynch them. The ...more
Skylar
Nov 06, 2016 rated it liked it
Mr. King clearly knows what he's talking about on monetary policy and bank regulation, but his public and fiscal policy recommendations detract from that knowledge. He dismisses the utility of government stimulus in the Great Recession, ignoring the fact that the US stimulus should have been much bigger, and could have been much more punitive on the banks. He also places too much faith in the IMF for dealing with crises in the developing countries, ignoring completely the IMF's role in causing t ...more
Andrew
The End of Alchemy: Money, Banking, and the Future of the Global Economy is a book by former Bank of England Governor Mervyn King, who was a principle participant in the global effort to combat the Great Recession of 2008. King has since retired from his position, and has written his first (and hopefully not last) book on the crisis. This isn't, however, one of the many timeline books of the recession, or about placing blame, or even absolving himself of responsibility. King instead focuses on n ...more
Dave Peticolas
Jul 10, 2016 rated it really liked it
Very thoughtful and clear-sighted analysis of the late-2000 financial crisis and Great Recession. Although King was a key figure at the time, this is not a blow-by-blow account of the events nor a search for immediate blame. King is looking for the deeper causes of what happened and how to prevent such crises in the future. He also presents one of the most lucid accounts of the underlying structural problems that led to the crisis and subsequent recession that I have read. I'm not enough of an e ...more
Ben Irvin
May 17, 2016 rated it really liked it
Shelves: economics-read
This is now my fifth book in the series on macroeconomics. I do recommend it although I initially was not so sure. King was head of the UK central bank from 2003-2013, so he certainly has experience and deep knowledge of what can and did happen with banking and the world economy. I liked the book ultimately because of the several good insights I gained and because it challenged, to some degree, the predominant thinking that earlier books in the series had tended to agree on. King's writing is fl ...more
Diego
Aug 15, 2017 rated it it was amazing  ·  review of another edition
Shelves: economía
Desde la crisis financiera de 2007-2009 y la gran recesión que plago al mundo se ha escrito mucho sobre sus causas, soluciones y sobre la naturaleza de las economías de mercado y del sistema financiero. Se han producido grandes debates sobre la necesidad de hacer reformas en la conducción macroeconómica de los países y se han tomado medidas de política pública alrededor del mundo con el propósito de remediar tales problemas.

Muchas de esas políticas han fracasado como el caso de Europa, en otros
...more
Adrian
Jun 18, 2017 rated it really liked it  ·  review of another edition
The former Bank of England Governor gives a suprisingly readable account of his understanding of the serious underlying faults in modern finance. While there exists a plethora of books on finance since the crash of 2008, this one stands out for 2 reasons. First, it's by a former Central Bank chief, Second, Lord King has some interesting recommendations.
King suggests that Central Banks, rather than being Lender of Last Resort, should instead be Pawn Broker for All Seasons, and in the last chapter
...more
Sarah Toney
An incredible book on the role of central banks, how money and our economies work, and the intrinsic nature of boom/busts in our current system. While I don't agree with everything, this book provides a real foundation for understanding our economic reality and what needs to be done to shift to a more stable money system that will support the real economy and real people. I believe it's important for us to understand our economic world so that we can powerfully stand up for our own best interest ...more
Pieter
Apr 13, 2016 rated it really liked it  ·  review of another edition
Shelves: economie
The year 2008 led to the worst financial crisis we have ever had at least since 1929. Until now, both central banks and governments struggle to recover. Money has been used unwisely, because politicians were unwilling to take unpopular decisions. Like doping, trying to hide overconsumption, increasing private and government debt.

A case study is the European Monetary Union for which it was not longer required that inflation would converge or budget deficits would belong to the past. Germany force
...more
Janp
Nov 11, 2016 rated it liked it
Shelves: economics
"Brimming with new ideas....brilliant" reads the cover of the paperback I bought. There's two main ideas: one being the central banks functioning as a 'pawner for all seasons' as opposed to a 'lender of last resort', second is more cooperation between central banks and simplifying the systems (end alchemy) to structure the economy better and thus preventing large crises like the one in 2008. (The latter being discussed very elaborately, sometimes repeating certain systems and events two or three ...more
Kevin
Feb 23, 2017 rated it liked it  ·  review of another edition
There are a number of problems with Mervyn King's book. The first is the rote recitation of Adam Smith's origins of money in barter that are a fantasy that economists cling to despite extensive evidence pointing to money as credit, both social and otherwise as the start of a monetary system. (see Debt: the First 5000 years for a comprehensive look) While he does comment on the endemic fraud around the crisis, he does not address the role it played in and around the crisis. (Though I am unfamilia ...more
Yolanda Ruiz
Aug 15, 2016 rated it it was amazing
Shelves: must-read
A surprising and must read book.
Kirk Houghton
Mar 14, 2016 rated it really liked it  ·  review of another edition
As ex-Governor of the Bank of England during the 2008-09 world recession, Sir Mervyn King is better placed than anyone to give an inside account of the financial storm that nearly brought the western world to its knees.
Thankfully, he is happy to let others do that and has no intention of writing a special plea to the Bar of History for a sympathetic hearing. Instead, The End of Alchemy is an ambitious attempt to bring the theoretical world of banking to the educated man on the street without al
...more
InvestingByTheBooks.com
The scope of this book is ambitious. Mervyn King, the former Governor of the Bank of England, aims to explain the financial crisis and the state of the global economy today, he proposes a reset of the construction of the banking sector and attempts to transform the understanding of economics to better function as a practical tool for central bankers and politicians. The book targets the “interested general public” and while the language is unpretentious and simple enough some background knowledg ...more
Arno Mosikyan
Feb 21, 2018 rated it really liked it  ·  review of another edition
QUOTES

The crisis was a failure of a system, and the ideas that underpinned it, not of individual policy-makers or bankers, incompetent and greedy though some of them undoubtedly were.

By alchemy I mean the belief that all paper money can be turned into an intrinsically valuable commodity, such as gold, on demand and that money kept in banks can be taken out whenever depositors ask for it. The truth is that money, in all forms, depends on trust in its issuer.

Four concepts are used extensively in t
...more
Douglass Gaking
The End of Alchemy is the most comprehensive book on financial crises that has been published since the Great Recession. Mervyn King headed up the Bank of England during the 2008 Financial Crisis. However, unlike Timothy Geithner and Ben Bernanke, he doesn't set out to defend his actions during the crisis or make excuses for questionable decisions. Instead, King criticizes the system that allowed the crisis to happen, allowed the crises before it, and will inevitably create future crises if it i ...more
Nilesh
A disappointing book mainly because who it comes from. If a person with all the policy power possible, who could so clearly see whatever was wrong in the policymaking and still could do nothing, he should have written on practical issues that confound the decision-making and ways to get around them rather than offer more theories and theoretical solutions.

Theory, as is invariably the case with great economists, is good even if presented in the laymen language garb. Other academicians may find ho
...more
Alex
Jun 12, 2018 rated it it was amazing  ·  review of another edition
This review has been hidden because it contains spoilers. To view it, click here.
Mary
Jun 18, 2017 rated it liked it
Shelves: abandoned, business
Caveat: I only read the first 180 pages. While the reviews indicate that this book is one of the best on the global economic crisis and earlier financial disasters, the challenges of the global banking system, and the solutions we need to consider, I still hadn't learned what I was expecting (something new) by the end of chapter 3. The movie, The Big Short, was far more engaging than these chapters in understanding the financial basics. Chapter 5 is where it got interesting (the role of central ...more
Jim Puskas
King does his best to render economics as something a lot better than the "dismal science". By illuminating the alchemy practiced by the banking sector, he comes close to succeeding. Here are two kinds of alchemy, one of which actually seems to work, while the other is purely a fraud. The late medieval alchemists sought to create gold out of base metal; clearly, they were pikers. But it's true that the banks do in fact create money -- not out of base metal but in fact out of nothing. However, in ...more
AnnaG
May 12, 2017 rated it liked it  ·  review of another edition
Shelves: 2017, non-fiction
Mervyn King gives an articulately argued and detailed explanation of the orthodox banking religion ie that banks are socially useful and contribute significantly to human prosperity, rather than being a rent-seeking drag on true human endeavour. It is interesting that he acknowledges several times that economics has little predictive power and yet still quotes the wisdom of economists past to prescribe how the financial system should be treated.

If you have a positive view of banks and want that
...more
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Mervyn King served as the governor of the Bank of England from 2003 to 2013. He was appointed Baron King of Lothbury in 2013, a Knight of the Garter in 2014, and is currently a professor at both New York University and the London School of Economics.
“The lesson is that no amount of sophisticated statistical analysis is a match for the historical experience that ‘stuff happens’.” 4 likes
“Confucius emphasised the crucial role of trust in the authorities: ‘Three things are necessary for government: weapons, food and trust. If a ruler cannot hold on to all three, he should give up weapons first and food next. Trust should be guarded to the end: without trust we cannot stand.’5 Those” 3 likes
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