"Adam Smith", author of the engrossing and witty book "The Money Game" and the entertaining, if not enthralling "Supermoney", returns to the scene to write this rather dull treatise on the 1970's. While he retains a bit of the wit and sparkle of his earlier books, "Smith" becomes quickly bogged down by OPEC, a force he can understand but not comprehend. His understanding comes from the historical perspective - he writes an informative and enlightening, though not entertaining, history of the organization. However, he tends to focus on the purchasing power of the OPEC countries, rather than realizing that OPEC had reached a peak in it's power by the time his book was published. Granted, we cannot expect Mr. Smith to have predicted what would happen to OPEC. On the other hand, he surely cannot have thought that the US would be reduced to supplying military equipment to the new Arabic superpowers (this, he implies, is essentially the only way we can attain anything approaching an import/export balance with Saudi Arabia). A few chapters are spent on real estate, the market for which Mr. Smith thinks is now controlled by speculators and people attempting to hedge against inflation. He decides that the long bull market in housing has finally ended. Alas for Mr. Smith's reputation, it has yet to do so, with the median price for a home increasing every year since his book was written (as it had done every year before). Mr. Smith, however, manages to redeem himself near the end of the book, when he makes his stock market prediction. At the time he wrote the book, the Dow was at 900. He predicted that within ten years, it would rise to 2700, an amazingly accurate guess. However, in reading his reasons for a prediction, we can see that his bullishness has almost nothing to do with what actually moved the market. Overall, this book is worthwhile only to the true Adam Smith fanatic or to someone trying to thouroughly research the economic situation of the 1970's. Paper Money
I have read this book twice, once in college as an economics major, shortly after it was released, and again a few weeks ago. I thoroughly enjoyed both times. Although Smith rambles at times, it is an entertaining and informative look at macroeconomics in the 70's and teaches things that you won't find in Economics 101 textbooks. If you like reading about these matters, you'll find this book enlightening and fun. If you don't, there may be enough anecdotes, and such, to keep your interest through the book, but it won't be enjoyable for you. (There's a reason they call economics "the dismal science.")
In the 1970s, the world economy suffered heavily from brutal spikes in the oil price.
One of the culprits was OPEC, which was formed on the model of the 'Texas Railroad Commission'.
The rise in the oil price provoked an enormous wealth transfer from the oil consuming to the oil producing countries.
Moreover, the oil consuming countries were confronted with the choice between higher taxes or printing money and chose for the latter. But in the US, the bill of the Vietnam War was still not paid. It all ended in stagflation, a mighty drop of the dollar (`my swissies') and a real estate bust.
Adam Smith gives us also a brilliant course on the origin of banks and money.
This book reads like a thriller and is a must read for all those interested in the economy of the 1970s in the West.
For an in depth analysis of the oil crises, I highly recommend the book by F. William Engdahl `A Century of War.'
I first read this book back when it came out, and have reread it twice over the years since. It's lessons continue to be relevant. I have to say that some of the other reviews I've read here, leave me scratching my head as to how they could find it boring, or complain in one case that the book gets boughed down talking about OPEC. Gold, the oil industry, OPEC, and their effects on the economy are the whole point of the book! Like anything else, I guess, you take out what you put in. So, don't read this book if you aren't interested in knowing how these worked then, and continue to work now in shaping the economic realities we all struggle to coexist with.
This is a great book. Written in '80 (pub date 81) it analyzes the underlying economy that gave rise to the late 70's 'stagflation'. It does not give a prescription for investing in such a period (which appears to be returning) but allows the astute reader to study the economic policies put in place in the 80's that "cured" the country.
The author has a wonderful, positive voice that makes reading this economic text a pleasure.
This book written in the early eighties really spelled out what is happening today in regard to the foreclosures and the price of oil and why it is so high. After reading this book I realize the American Dollar is worthless on the world market. Everyone should read this book!
What a surprise! Just read this book to discover that the present economical crisis started when US become involved with OPEC. Read this book as if the dates were 2008. You will see that the world is in real trouble. An excellent introduction to US dependency on easy money and credit.
I have no idea what the author was trying to say. I spend 90 minutes reading it and I pray I havent lost more than 2 or 3 million brain cells trying to digest it. If you have insomnia, try reading this book before you go to sleep. - Opec'
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