The Trouble With Prosperity: The Loss of Fear, the Rise of Speculation, and the Risk to American Savings (Hardcover)

~ (Author)

Editorial Reviews

Amazon.com Review

Risk, according to James Grant, is our enemy. The current, seemingly endless run-up of the stock market is bound to crash around our ears at some point, sooner rather than later. The flood of cash that is lifting the current consumer economy stems from imprudent credit decisions by banks and, by extension, by the largest bank of all, the Federal Reserve. The flight of capital from bonds into mutual funds is only the most visible symbol of an America that has lost sight of fundamental economic forces. And so on. The writer and publisher of Grant's Interest Rate Observer, Grant is a born contrarian, directing investors into commodities markets, which have been flat for 15 years, and away from the booming stock market. You can disagree with his prognosis, but it's hard to argue with his diagnosis. The boom of the 1990s can't last forever.

From Booklist

The publisher of the small but influential newsletter Grant's Interest Rate Observer and author of Money of the Mind, proclaimed by London's Financial Times and Business Week as one of the best business books of 1992, here expresses concern that too much risk has been eliminated from the financial system. He concludes that, though currently prosperous, the American economy is stagnant because marginal enterprises are protected from failure. Grant believes that success and failure are part of the natural, cyclical order of things and that that order has been disturbed, particularly by the Federal Reserve Board's manipulation of interest rates. His beliefs are grounded in the Austrian school of economics, the tenets of which Grant lucidly explains. David Rouse

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Product Details

• Hardcover: 348 pages
• Publisher: Crown; 1st edition (October 22, 1996)
• Language: English
• ISBN-10: 0812924398
• ISBN-13: 978-0812924398
• Product Dimensions: 9.6 x 6.5 x 1.2 inches
• Shipping Weight: 1.3 pounds
• Average Customer Review: 3.8 out of 5 stars  See all reviews (5 customer reviews)
• Amazon.com Sales Rank: #250,245 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

9 of 9 people found the following review helpful:

4.0 out of 5 stars Grant again shows mastery of market history, January 30, 1997

By A Customer

Mr. Grant's book is good and again he demonstrates great knowledge of the history of financial markets. His writing can be a little bit dry at times, making it sometimes difficult to follow the thread of argument in each chapter. Grant gives a compelling case that the cyclical nature of booms and busts isn't over and suggests several times that these cycles are really beneficial to a country's economic health. He suggests that efforts by governments (notably the Japanese) to suppress the effects of natural market cycles inevitably lead to disaster. I think, however, his thesis is undercut by his own research that suggests that moderate economic expansions yield only moderate economic contractions. Several times he suggests that we should strive for stronger expansions, thereby ultimately leading to more severe contractions, but never really provides a compelling case as to why. In other words, Grant does not present persuasive reasons as to why moderate economic cylces are inferior. In any event, this is another first rate book by Grant. I strongly recommend it for those people who think markets (and economies) only go UP

1 of 1 people found the following review helpful:

5.0 out of 5 stars Excellent Account of Speculative Folly, January 31, 2009

By	Jon Thomas - See all my reviews (REAL NAME)

I first bought my paperback edition of this book back around 1996 when it came out. Being somewhat uninformed at the time about the wonders of modern day finance, I read it with something less than full comprehension. The author, James Grant, assumes that his reader has a fair acquaintance with the ways of Wall Street. I've re-read it at least twice since then, gaining greater understanding with each re-reading.

The book holds up remarkably well. As far as I can see, all of his Cassandra-like warnings about the speculative excesses of Wall Street in the 1980's and 1990's prior to 1996 are every bit as applicable to today's present financial disaster. American investors--and probably most human investors--appear to have gnat like memory spans. Economic history appears to be a field of human understanding little studied or understood by the investor community. Optimism blooms eternally in the soul of the American investor.

Grant holds that the business cycle is unlikely to ever be superseded despite claims to the contrary, "That it is really different this time...." This is a claim that is asserted throughout financial history. If you want good financial advice and insight, I would say Mr. Grant has a very good track record if the prognostic accuracy of this book is any indication. The author does seem to have a rather romantic and sentimental attachment to the old gold standard financial days. He never comes out and recommends it for this modern age, but I do detect a flirtation. I can't go there with him on that one, though. And he seems to have little faith in financial regulation. I'm really not in agreement with him on that, either. We certainly can do better than we've done in the past few decades of de-regulation. We cannot do away with the business cycle, but we should be able to let a little air our of financial bubbles instead of pumping them up in Greenspan fashion.

All in all, a well written, very informative, and very humorous book.
Highly recommended! Hopefully, the publisher will put out a new edition of this book to deflate the bubble of excessive prices for copies of this used book.

2 of 6 people found the following review helpful:

4.0 out of 5 stars Superb financial history by a witty writer., April 10, 1997

By A Customer

For an extensive and mostly favorable review of Mr. Grant's, The Trouble with Prosperity, by an economist that shares Mr. Grants's sympathies with the Austrian school of econoimics go to the following URL: