Book Review: Leverage by Karl Denninger

Leverage
How cheap money will destroy the world
By Karl Denninger
Copyright 2012
 
Read this book if you are worried about our economic future.  Denninger covers the expanse of how our system has become distorted and what the likely outcomes are that we will face.

As the title of book describes, most of the problems related to our financial insolvency relate to leverage throughout the economy.  The author describes how the rule of law has been lost and what needs to happen to regain it.  We are essentially ruled by Oligarchs who now use our political system to bail them out for gambling and losing in the markets.    This behavior would cause most of us to file bankruptcy or go to jail but the elites are given taxpayer money to cover their losses instead.

Derivatives get heavy treatment and by the time you are done it is clear that there is no place for them in normal business transactions.   Information and disclosure are the only cures for stopping future disasters caused by derivatives.

He covers the need to address the free trade fallacy that has caused our factories to leave the country. He also explains how our need for energy is what causes us to stay involved in the Middle East.  We could change policy and change the outcome of our financial system simply by becoming energy independent.

Denninger wrote a great book and of course his blog is a must for daily reading.