The Power of Gold: The History of an Obsession (Paperback)

~ (Author) "If gold were more plentiful on earth-say, as abundant as salt-it would be far less valuable and interesting, despite its unique physical attributes and beauty..." (more)
Key Phrases: stupendous conspiracy, inadvertent innovation, disintegrating age, United States, Federal Reserve, World War (more...)

Editorial Reviews

Amazon.com Review

In the first chapter of his book The Power of Gold, Peter Bernstein quotes the immortal words of King Ferdinand of Spain, who once declared: "Get gold, humanely if possible, but at all hazards--get gold." As ensuing chapters reveal, man's obsession with finding, keeping, selling, and evaluating gold has rarely been a humane adventure and has always been a hazardous one. Digging deeply into history's treasury of torrid tales and complicated deals, Bernstein examines gold's lure with an economist's passion for quantification, a historian's eye for detail, and a sociologist's feel for its consequence.

Useless as a metal for most practical purposes, gold originally held value as decoration and adornment for the wealthy ancients. Later, it was minted and used as coins by the Lydians in 635 B.C. That, Bernstein goes on to reveal, put gold on a path from the concrete to the abstract, from evidence of wealth to the standard behind wealth in other forms, and finally to the tenuous place it holds in today's virtual world of credit cards and computer chips. Along the way lie wild stories of lives destroyed, fortunes won and quickly lost, and values transformed: the massacre by the Spanish invader Pizarro, whose small band of men decimated the formidable army of Emperor Atahualpa, "the Inca," through more duplicity than military skill; the roller-coaster ride of the 1890s, when the rippling impact of the Baring Brothers bank crisis in Britain sent the isolated United States into an economic meltdown; and the surplus of the Gold Coast natives of Timbuktu, who willingly traded their gold for much-needed salt, ounce for ounce.

Bernstein is a great storyteller. His accounts of mythological, ancient, and recent history ooze with odd and entertaining details that bring each successive tale of obsession to life. If not for his skill, the sheer volume of events collected here--presented more anecdotally than systematically--would be overwhelming. In the end, though, it is Bernstein's fascination with the power of gold to entangle and entrap its possessors, and its ultimate ability to change the course of entire eras and civilizations, that makes his book as fascinating as it is informative. A dense but entertaining read. --S. Ketchum --This text refers to the Hardcover edition.

From Publishers Weekly

"[T]he quest for gold" has been "gluttonous," says Bernstein, tracing the metal's impact on human myth and history: gold has inspired art, battles, conquests and discoveries, including Columbus's trip to the New World, where he hoped to secure enough gold to buy back the Holy Sepulcher from the Muslims. Bernstein makes clear the metal's virtues: it's so malleable that one ounce can be stretched into a 50-foot wire or pounded into 100 square feet, and it lasts forever (4,500-year-old Egyptian dental work, he notes, is good enough for today's mouths). Bernstein's gift for storytellingAwith just the right touch of acerbic wit (on the myth of Jason and the Golden Fleece, he summarizes, "The story does not have a happy ending, because Jason was a compulsive social climber")Aand his presentation of the paradox of how and why such a soft and simple metal has been afforded such value help make this work a winning account of human obsession, comprehensive, entertaining and enlightening. A knowledge of economics might help during the last third of the book, when Bernstein moves from ancient times to modern day and describes the economic chaos that followed WWI. By then gold was no longer the domain of legend; it had become a commodity, the standard against which powerful nations measure their wealth. But Bernstein, author of the bestselling Against the Gods: The Remarkable Story of Risk, livens up his intricate economic discussion with tales such as the one about the Harvard Business School professor who got into trouble with his dean for withdrawing his gold from the Harvard Trust Company during a gold standard-related panic in 1933. As the title promises, Bernstein does deliver a page-turning history of the not-so-heavy metal and its influence on people through the ages. $250,000 ad/promo; first serial to Worth. (Oct.)
Copyright 2000 Reed Business Information, Inc. --This text refers to the Hardcover edition.

See all Editorial Reviews

Product Details

• Paperback: 448 pages
• Publisher: Wiley (October 3, 2001)
• Language: English
• ISBN-10: 0471003786
• ISBN-13: 978-0471003786
• Product Dimensions: 8.8 x 6 x 1 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 3.8 out of 5 stars  See all reviews (54 customer reviews)
• Amazon.com Sales Rank: #295,577 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

19 of 20 people found the following review helpful:

3.0 out of 5 stars Intersting anecdotes, September 28, 2006

By	HuckFinn - See all my reviews

This review is from: The Power of Gold: The History of an Obsession (Hardcover)

And an intersting read, but basically no more than a damnation of Gold itself.
The author delights, toward the end of the book , how wonderful it is to have been liberated from the shackles of the yellow metal. But one can't help but wonder if he sees the irony in the statement. The book itself is a collection of historical lessons that show the very same pattern he praises. Hard currency , perverted to fractional , inevitably fiat. The result is always the same. Massive increase in currency and punishing inflationary consequences. The author offers absolutely no argument as to why it should end differently this time. In fact , the author's tone is almost condescending as he reviews the history of Gold as money. Oh! Our generation and our economists and leaders are just ever so much smarter than their predecessors! Metal-backed currencies are characterized by the author as some quaint, antiquated ideal that constrained mankind. Yet I note in almost all cases where civilization deviated from the practice , the reason was War , and the consequence was inflation , speculation and eventually ruination. To see people, especially economists , ignore history , certainly a history as oft-repeated and essentially resulting in the same effect, is cringe-inducing.
The brave new world of Gold-as-jewlery and jewelry only remains to be seen. The price of both Gold and Silver have outperformed almost all other asset classes since the publication of the book , and there are rumblings of going back to a monetization of Silver in Mexico as I type.
It is easy for the economist to see, in hindsight, the folly of mankind. But I'll wager that Human nature has not changed as much as the author thinks. There is no mathematical formula for them to use to determine the "value" of Gold , and so I think they are confused, skeptical and mistrusting of it. I'll offer a single number for them though , based on history. Positive one. That is the correlation coefficient between the price of Gold... and fear. Bad times will come again as they inevitably do , and Gold and Silver will again see value as both a store of wealth, protection against inflation, and method of transacting commerce.

16 of 19 people found the following review helpful:

3.0 out of 5 stars Interesting Nuggets, But Not 24 Carats, August 25, 2003

By	Wayne A. Smith (Wilmington, DE) - See all my reviews (TOP 1000 REVIEWER)    (REAL NAME)

Peter Bernstein has written an overview of the relationship between money and gold throughout the centuries. This book serves up many interesting stories of gold and its service as money or as a financing instrument. In this, the book entertains. However, I found it to be somewhat disjointed as it moved from place to place and time to time chasing the illustrious metal as it assumed its different forms in kingdoms and nations far and wide.

My sense after finishing the book was that it was somewhat incomplete -- and that the author could not precisely focus on what the books focus was. While he mentions the twin uses of gold -- both as money and adornment throughout the book, almost all of the tales and statistics are relating to monetary gold. Also, for much of the latter half of the book, his focus is on the development of banking and financial instruments -- and their replacement of gold as a medium of exchange and a source of finance. Perhaps a better title would have been "Money through the Ages" or something that reflected the breadth of the journey the reader takes while stopping briefly at various historical events involving gold, coin, money, banking, minting and finance.

Not to say that the book isn't informative or interesting for the most part -- it is. I learned many new anecdotes and information from the author -- much of it fascinating. For example, the "Great" Kublai Kahn printed money that was backed by his will only, centuries ago. And it worked; apparently fear of not accepting the Kahn's paper was enough to make it a working medium of exchange. The Bank of England resisted machine minting with raised edges for years after the technology was available, even though the country was losing a fortune to clippers and shavers of hand stamped coin. West Africa was long a source of gold to Europe across the Sahara via long camel caravans and in barter on the coast (where the local custom was that Europeans would bring goods they thought appropriate to a place and then leave. The Africans would then take the goods and leave an amount of gold -- neither side ever seeing the other in the ultimate "hand-shake" deal). For centuries, Europe was frustrated in not discovering the location of the mines. One also reads of the Spanish gold caravans, the California and Klondike Gold Rushes, the era of nations moving gold from one vault to the next in the same New York bank to settle balance of payments and Nixon's abandonment of a gold tie to the dollar in the early 1970's.

It is interesting to see how completely wedded to gold some governments became, particularly in the late 1800's early 1900's. England, and other nations, were willing to see millions become unemployed rather than change the exchange rate - a position that sent Winston Churchill into his period of dormancy in the 1920's. FDR shocked the establishment - particularly if unsurprisingly Herbert Hoover, by setting gold at $35 dollars and ounce. In fact, the last third of the book relates story after story of smart men who were thought to absolutely understand the crucial relationship of gold to the money of their nation - and how almost all of them saw their policies produce completely the reverse of what they desired. For more than 100 years, the money men of Europe and the United States believed an unchangeable gold standard was the only route to growth and prosperity. The one astute observer, if contrarian, was Benjamin Disraeli, who observed in 1895 that "Our gold standard is not the cause, but the consequence of our commercial prosperity." His observation fell on deaf ears, only to be illustrated as possibly the right relationship after the turmoil of the 1920's and the Great Depression forced countries to begin to unhitch their currencies from absolute and unchanging values as measured in gold.

All of the information and stories are somewhat loosely tied together. Although it is apparent to the reader that the central point to the book is how money developed and gold's role in the various systems, I don't think the author traced the development as well as one might have or drew conclusions that would have made this interesting collection of stories into one story. Maybe I expected to much from an author who developed the story of insurance and risk better in his work "Against the Gods," but I thought this had a more thrown together feel.

Most of the information is interesting and even fascinating in some places. All in all, it is a decent survey of gold, money and the development of finance if one is interested in the topic.

35 of 45 people found the following review helpful:

4.0 out of 5 stars Dense, somewhat boring but will probably endure, October 12, 2000

By A Customer

This review is from: The Power of Gold: The History of an Obsession (Hardcover)

It appears from the obvious publisher-placed comments that I may be one of the few people who has actually READ this book. With his no-doubt legions of researchers, Peter Bernstein obviously has his facts at hand, and they are plentifully strewn throughout the book. But this is not a business book, it is a history book about the enduring lure of the element Au. It took me about a week to finish this, and I found much of it interesting. But overall, I thought that it read like a well-researched thesis that will probably stand the test of time. There are some truly fascinating stories in it, and it is well written, but don't expect this book to tell you how to find gold or how to make enough money to buy gold. It is what it is: the history of a metal that has never lost its lustre.