Customer Reviews

Biography of the Dollar: How the Mighty Buck Conquered the World and Why It's Under Siege

5 star:		(8)
4 star:		(7)
3 star:		(1)
2 star:		(0)
1 star:		(2)

 

 

Craig Karmin's new book, "Biography of the Dollar," explores a world that most of us in America take for granted - the world of currency. So, what's so important about the currency? My answer to that is simple- everything.

A free-flowing, stable currency is what makes all trade possible- both domestically and internationally. A lack of confidence in the underlying value of a currency can bring entire economies to a screeching halt. The results can be devastating- life savings are wiped out, hyperinflation can take root, debt is defaulted on, investment dries up. It can take decades for economies to recover.

If you're like me, you probably haven't given much thought to these issues. Because, as Americans, they seem to be such remote possibilities. But are they . . . ?

Karmin's book does an excellent job of informing the reader of how the US Dollar is created, distributed and used not only in the United States; but, throughout the world. Karmin covers many aspects of the Greenback- from printing (it costs 5.7 cents to print one) to foreign government's hoarding (60% of the dollars in circulation are overseas) to lending and interest rates (thank China, not the fed, for keeping US consumer borrowing rates low).

Karmin also brings to light the intense pressure that the Dollar is under every day from seemingly all sides:

-the U.S. Government's unwillingness to balance the budget,
-Asian and Middle Eastern countries growing less interested with "subsidizing" the value of the Dollar,
-the solidifying of the Euro as an alternative global currency, and
-the U.S. consumer's never-ending desire to "borrow-and-buy" their way through life

All of these factors have already played out to a certain degree in the declining value of the Dollar over the past couple years. Will the trend continue and how far will it go? Those questions are explored as well.

I highly recommend that anyone read this book- it is an eye opener without getting technical (economist-types will miss their I-L-S-M diagrams)- and it poses all the right questions to get American's thinking about the implications for the future- whether that be as vital as national security or as trivial as the cost of a hotel room in Paris.

When I picked it up I was expecting a historical journey starting with the revolutionary period and ending in today. What I got was a high level overview of key events this century, mostly in the last fifty years. The author offers deep and quite instructive insights in the dollar from a trade and monetary policy points of view, showing their deep connections, which goes unnoticed by most. I'm curious about macro economics and monetary policy has been an area where I've not been able to absorb any meaningful material until I read this book. It offers interesting insights about how financial instruments, particularly money and bonds, play a role in government policy and the economy as a whole. The book is fun to read and quite instructive.

It is an excellent book to understand the dynamics of the currency markets and will give an insight to the ordinary people how policymakers have screwed an excellent arrangement of international trade currency fir their own benefits. It will encourage people to ask questions, what measures are being taken by the policymakers to correct this situation. A strong $ is not in the interest of US but also in the interst of other nations. However the shortsightedness on the part of politicians has weakened the $ to such an extent that it seems to be beyond repair now. However all is not yet lost and it is still possible to bring the USD to its full glory. The author has explained the whole thing in a very lucid language. I recommend this book to all.

I bought this book following Amazon's recommendation, which recommended me serveral decent books in the past. This book just doesn't cut it. Here is a chapter by chapter description:

Chapter 1. The author spends three pages talking about how *rich* John Taylor, the founder of a currency fund, is. Utterly boring and totally irrelevant. Then he proceeds to dicuss many other funds, boring... nothing specifically about the operations, just in general the funds. Then he jumps back for another 20 pages of sales job for Mr. Taylor. I can't help wondering if Mr. Taylor is a patron who made publishing such a mediocre book possible.

Chapter 2. How $ dollars are printed. Yes, literally printed. Not circulating currency volume in economic sense. I couldn't care less.

Chapter 3. Gold standard, Nixon, Bretton Woods. If you know a bit monetary history, that's all this chapter is about.

Chatper 4. Some foreign countries (Ecuador for one) use USD directly (therefore a dollar colony). And... mmmh... that's it.

Chapter 5. Some foreign countries buy dollars as foreign currency reserve (duh)

Chapter 6. Americans are spending too much. Now it's not clear if dollar will enjoy the same status in the future.

Overall, it's a poorly written book. Not insightful, nor well written. Reading the book is like listening to a monotonic description of how to operate a refrigerator.

Craig Karmin presents dollar's unique rise and potential dangers facing its status. I enjoyed the book since it had many interesting facts and histories about the US currency in general. What I enjoyed the most is the chapter 2 which detailed about Bureau of Engraving and Printing. Recently visited BEP and saw its greenback factory in action, which enabled me to appreciate the facts and interesting stories behind the BEP. I strongly recommend readers to visit BEP before reading this book because you will be more involved with the topic as you read the book. Chapter 5 also revealed how country's fate can turn itself within a short period time by sacrifice. I believe dollars will prevail for long time despite of financial crises because it is difficult to shift from what the world was being used to.

The author says that the dollar has helped the world's economic expansion, but at the same time encouraged the United States to borrow heavily from foreigners. Now these foreign lenders are questioning whether the U.S. will be able to keep paying the interest on these loans. If they lose faith in our country's ability to pay, this could have very negative consequences for us and the rest of the world.

The dollar has a special status because it is the primary unit of international trade and finance. It is simply the world's currency. But the status of the dollar is changing and might one day be replaced by the Euro or the Yuan. I learned a lot from this book and recommend it to others.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

"We don't care if it was in a fire, buried underground, water damaged. Maybe your dog ate it. Came out the other end. Clean it up a bit. We'll take care of it." - A supervisor of the BEP's Mutilated Currency Division

Mind you, my attention to high finance extends only to balancing my checkbook, paying the bills on time, socking away as much as I can, and making sure I live within my budget. (In these regards, especially the last, I at least do better than my state and federal governments.) I don't even pay attention to the annual reports that come from my 401k plan. So, for me, BIOGRAPHY OF THE DOLLAR by Craig Karmin was pretty much unexplored territory.

To call this book a "biography" is perhaps a misnomer. Such implies that the story begins with the origin of the $ as a monetary unit, and this isn't the case. Karmin begins the historical part of the story with the establishment of the First Bank of the United States in 1791 and proceeds fairly quickly to the dollar's disengagement from the gold standard in 1971. There's also virtually nothing about the evolution in size, color (or metal content) and denominations of the currency as coin or paper over decades since it became the official legal tender of the U.S.

If I was a dollar come to life - one of the rarely seen $2 bills, I think - and asked to write a narrative containing what's in this volume, I would perhaps entitle my essay "What I Did on Several Summer Vacations" since the bulk of the text is dedicated to my experiences with currency speculators, the Bureau of Engraving and Printing (especially the Mutilated Currency Division), Ecuador, which abandoned the sucre and adopted me as its sole currency in 2000, the central banks of various overseas nations (particularly in Asia), and my battles to fend off the advances of the euro, Chinese yuan and Japanese yen.

The intent of BIOGRAPHY OF THE DOLLAR is apparently to trace the Mighty Buck's fortunes, so to speak, of the recent past and present in the global marketplace as it's challenged by trade imbalances, vacillating interest rates, currency markets, recessions, government and central bank approaches to currency reserves, and an ever growing supply of itself. Perhaps the writing of the volume was two years premature. It makes the reader wonder what the author would say now after the bursting of the U.S. home mortgage bubble, the rising unemployment, the bankruptcies and bank failures, the bailouts, and the prospect of increasing Federal indebtedness and budget deficits under President Obama's social re-engineering plans. In any case, whether or not the dollar will lose its place as the world's dominant medium of exchange is a question Karmin can't, or won't, answer definitively. That's probably the safe course.

For the reader savvy in the ways of international finance, the BIOGRAPHY OF THE DOLLAR would likely be too much of a beginner's class. But, in my ignorance, I found it enlightening, interesting, and sometimes entertaining. But, I'm still not going to subscribe to the Wall Street Journal or read my 401k's annual report.

The birth of currency on the core concepts as a store of value, a medium of exchange has enabled trade and economic prosperity over the centuries. Typically societies used gold, silver and copper coins as currencies since these commodities satisfied these fundamental definition of currency. However, in order to facilitate faster and safer transactions, paper currency backed primarily by gold cam into vogue. The country whose currency dominated as the most acceptable tender emerged as the reserve currency of the world. Hence the British Pound Sterling of dominated world markets in the nineteenth century. Subsequently, in the twenty first century and till date the UD Dollar had successfully replaced the Pound and currently reigns as the worlds most traded and acceptable currency. This book outlines this economic history of the Dollar to its present day preeminence among all world currencies.

If the book had just covered what is outlined above, I would have considered it at a primer at best, and perhaps given it a two star rating, complimenting it for a chronological listing of events. However, there are lots of interesting facets of the Dollar that is largely ignored in standard books on economics.

Here is where the book scores and earns its additional three stars.


- An inside view of the foreign markets from the office of a leading foreign exchange dealer. Provides a good insight into the psychology of traders and how they make or lose money by betting on small fluctuations on the value of a currency against another.

- The story of Ecuador is very interesting. Here the government, unable to figure out how to manage its own currency from sharp fluctuations against the dollar and also the consequential impact on inflation finally abandons the local currency and adopts the dollar. Why bother when the US can do the job for us?

- For the first time I got an impressive "tour" of the Bureau of Engraving and Printing (BEP) where the United States actually prints its greenbacks. This is a thriller, and perhaps deserves a novel or movie ( if one doesn't already exist). Even more fascinating is the Fed's commitment to exchange dollars that are damaged, and sometimes beyond recognition. A IOWA farmer butchers the cow that swallowed his wallet, and sends what can be found in the digestive tract for redemption. The experts at work assess the value of the loss even in this form and promptly dispatch a check to the farmer.

- The chapter on the US's departure from gold standard (Bretton Woods 1944) and the Plaza Accord is unbiased. However the consequences of unbridled monetary expansion of fiat currency that is not backed t=by any asset is any ones guess. But for now, Fort Knox no longer has the obligation to pay in gold for greenbacks.

- The Dollar the reserve currency to a large extent, the US benefits from its ability to borrow from other countries. The rapid growth in the US trade deficit and consequential external debt is now reaching alarming proportions warns the author.

- What would happen if the creditor nations "diversify" some of their dollar holdings into another currency, perhaps the Euro? Even a slightest hint by any government sends shockwaves in the foreign exchange markets.

Overall, I found the book interesting, giving a 360 degree view of the Dollar's birth, emergence as the world's leading currency, and the challenges it could face in the twenty-first century.

Entertaining, insightful, unbiased and informative, a great week end read.

This book is very entertaining and informative, even if (or perhaps, because) it doesn't go into the finer details. Many of us took for granted the power of the 'buck' around the world, but now that it's in decline, we're starting to notice ! The book gives some insight into how the dollar achieved it's unique status as the currency of international trade, how the relative value of the dollar affects other countries, and vice-versa.
The book is also thought-provoking, and I'm now thinking about different ways to protect and grow my retirement savings. A worthwhile read.

I was put off after reaching page 3 of the introduction. It states the U.S pays $1,000,000 per day for each (350,000,000) person in the country in interest payments on the foreign debt. That is $127,750 trillion per year. Didn't seem right.

After wasting an hour trying to reconcile this I checked further in the index for other references and I see this number quoted again on page 244. Except this time the underlying math is detailed (which agrees with my research) and shows the debt interest to be $310,000,000 per day. This is about a $1.00 per person per day. Even there the $1 million per day is repeated.

Not good start for this book on finance. What will page 4 bring?