• New article posted on munKNEE:
  http://www.munknee.com/2011/05/richard-russell-demise-of-the-yankee-dollar-vs-the-rise-in-gold/ #
• New article by Chris Puplava:
  http://www.munknee.com/2011/05/what-the-1970s-performance-of-gold-silver-and-usd-says-about-tomorrow/ #
• New article!
  http://www.munknee.com/2011/05/why-hyperinflation-is-not-likely-let-alone-imminent/ #
• New Article on Gold and Silver
  http://www.munknee.com/2011/05/%e2%80%9cthree-peaks%e2%80%9d-pattern-suggests-gold-to-decline-17-into-june/ #
• Not too late to buy gold!http://www.munknee.com/2011/04/goldrunner-gold-on-track-to-reach-1860-1920-by-mid-year/ #
• An opposite point of view:http://www.munknee.com/2011/05/america-is-bankrupt-claim-is-total-nonsense-heres-why/ #

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How do you know how much is enough? Being able to answer this question means having a sense of “good enough” inside, which results in an internal affirmation of worth. If you equate love and self-esteem with money and power, ‘more’ will never be enough. Words: 430

In further edited excerpts from the original article* David Krueger (www.The SecretLanguageOf Money.com) goes on to say:

Much of our challenge with money stems from our difficulty to make one small distinction: what we have from who we are.

A Money Quiz
Answer the following two questions with a single, specific figure.

My current annual income is __________?

In order to insure happiness and contentment financially, with no more money problems and worries, my annual income would need to be _________.

I have given this quiz to hundreds of people. In more than 9 of 10 cases, their answers indicate that their annual income would need to be about twice the current level for them to feel happy and free from money worries. Someone who makes $50,000 a year believes it would take roughly $100,000 a year in order to be financially content; someone who makes $500,000 – five times the first person’s magical number – believes that the figure would need to be about a million a year.

In discussions with people after they take this little poll, there is a “trailing double” effect. People who have actually seen their income double over time have at the same time doubled their “happy and content” amount. In other words, once those who earned $50,000 achieve their hoped-for $100,000 goal, they then raise the bar and believe that it would now take about $200,000 to be happy.

Even when you change the numbers, the story remains the same. The story in this case is: “I need twice as much as I have to be happy.” That’s just one example of the common story threads; there are dozens of others, just as irrational, and just as hypnotically compelling.

Making peace with our moving target isn’t about learning how to aim better, or creating a fixed target that doesn’t move even after we hit it.

Creating financial targets (goals) is an important part of writing a new money story—but finding peace lies not in the target, but in the shooter. Your new money story begins with determining not what it is you want to have, but who it is you want to be.

*http://www.thesecretlanguageofmoney.com/

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
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Niall Ferguson’s book,The Ascent of Money, is an excellent, just-in-time guide to the history of finance and financial crisis in which he shows how promises and paper have lifted humans from subsistence farmers in Babylon to Masters of the Universe on Wall Street. Words: 975

Further edited excerpts from the original review*Shelby Coffey III (www.WashingtonPost.com) goes on to say:

The financial system, Ferguson writes, “magnifies what we human beings are like . . . our tendency to overreact” to booms and busts, enriching the “lucky and the smart, impoverishing the unlucky and not-so-smart.” In this way, money is a mirror, and “it is not the fault of the mirror,” he notes, “if it reflects our blemishes as clearly as our beauty.”

The pleasure of reading Ferguson’s treatment comes partly from the clarity of his explanations of financial concepts but mostly from his pen portraits of the extravagantly gifted and flawed characters who have led money’s long rise. He shows us how far we have come since Mesopotamian moneylenders developed rudimentary accounting around 1,000 B.C. and the Medici created elements of modern banking in 14th- and 15th-century Florence. He also weaves a long series of manias, panics and crashes into his tale. The Medici family’s surviving papers, he notes, bear scorch marks from the vengeful reformist Savonarola, who set up a Bonfire of the Vanities to destroy sinful goods and sent the Medici packing in one of the periodic reversals of fortune to hit financial leaders over the centuries.

Ferguson sketches the rollicking career of John Law: Scottish con man, killer, genius, lover and creator, in 1719-20, of one of history’s great stock market bubbles. Law effectively took control of the French national debt, substituted paper currency for gold and sold shares in the company that controlled French Louisiana. As the shares rose in price and investors borrowed against them, the volume of paper money doubled in a year, breeding inflation, speculation and the new term “millionaire” before Law’s system collapsed. From that day on, Ferguson writes, all bubbles have followed five stages:

1) Displacement, as economic change brings a chance for extraordinary profits;
2) Euphoria, as investors take advantage of the opportunity,
3) Mania, as novices, crowds and swindlers rush in;
4) Distress, as insiders see their prospects for profit declining because of the mania and start selling; and
5) Revulsion, as all stampede for the exits.

Ferguson provides a more flattering portrayal of Nathan Rothschild, patriarch of the banking family and mastermind of empires. Nineteenth-century states needed to issue bonds to finance wars; Rothschild was at the ready. When Wellington defeated Napoleon at Waterloo, Rothschild made huge and risky bets on British bonds and secured his family’s dominance of the London market for half a century. When the Rothschilds turned down a plea to back the confederacy’s bonds, the fate of the Southern rebellion darkened irreversibly. “Money is the god of our time,” declared the German poet Heinrich Heine in 1841, “and Rothschild is his prophet.”

From recent times, Ferguson gives deft summaries of the lives of Hernando de Soto, the Peruvian champion of property rights for the poor; Milton Friedman, the apostle of monetarism, who saw the supply of money as the key to the economy; and George Soros, the hedge fund philosopher and financier of liberal causes. I found myself understanding Soros’s theory of reflexivity for the first time. (Market prices, Ferguson explains, are “reflections of the ignorance and biases, often irrational, of millions of investors . . . [which] affect market outcomes, which in turn change investors’ biases, which again affect market outcomes” — in short, reflexivity.)

Judging from the text, Ferguson finished writing The Ascent of Money in mid-2008, after the sub-prime mortgage crisis had hit but before September’s credit freeze and the subsequent plunge in stock prices. As I turned his pages about the soaring trade in complex derivatives, I wanted to cry out to Wall Street: Don’t go down that road, the bridge is out!

The shadow world of derivatives, credit-default swaps, the sales of U.S. bonds to China — all seem to bring brilliant results, until they get too big. Indeed, “Too Big to Fail” is a popular catchphrase but the follow-up question is: How do we know that whatever institution is wearing that label doesn’t harbor a hidden cesspool of putrid assets? When should we withdraw our “inscribed trust?”

In a provocative afterword, Ferguson wrestles with “creative destruction,” the benefits of allowing companies to fail and investments to sour. He doesn’t come to a definite conclusion, but he notes that viewing the financial world from an evolutionary perspective argues for weeding out what the political scientist Joseph Schumpeter called “the hopelessly unadapted” — and quickly. “The experience of Japan in the 1990s,” Ferguson comments, “stands as a warning to legislators and regulators that an entire banking sector can become a kind of economic dead hand if institutions are propped up despite underperformance, and bad debts are not written off.”

Ferguson has written an admirably illuminating book that will take its place beside such modern classics as John Train’s The Money Masters, Peter L. Bernstein’s Against the Gods, and Adam Smith’s Supermoney.

Fear, greed and folly — according to a Wall Street maxim, are always have in the market. If only you knew in which order they come, then you could make some money but past results, as investment companies sternly warn, are no guarantee of future returns.

*http://www.amazon.com/gp/product/product-description/1594201927/ref=dp_proddesc_0?ie=UTF8&n=283155&s=books

Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given.
- Sign up to receive every article posted via Twitter, Facebook, RSS feed or our Weekly Newsletter.
- Submit a comment. Share your views on the subject with all our readers.
- Buy the book below from Amazon.