## Metadata - Author: [[Liaquat Ahamed]] - Full Title: Lords of Finance - Category: #books ## Highlights - Having to calculate and recalculate prices in the billions and trillions made any sort of reasonable commercial calculations almost impossible. German physicians even diagnosed a strange malady that swept the country, which they named “cipher stroke.” Those afflicted were apparently normal in every respect except, according to the New York Times, “for a desire to write endless rows of ciphers and engage in computations more involved than the most difficult problems in logarithms.” Perfectly sensible people would say they were ten billion years old or had forty trillion children. Apparently cashiers, bookkeepers, and bankers were particularly prone to this bizarre disease. ([Location 1889](https://readwise.io/to_kindle?action=open&asin=B001QIGZEK&location=1889)) - KEYNES WAS THE first to recognize and articulate that, for all the public rhetoric about reinstating the gold standard, the new arrangements were in fact very different from the hallowed and automatic prewar mechanism. As he put it in the Tract, “A dollar standard was set up on the pedestal of the Golden Calf. For the past two years, the US has pretended to maintain a gold standard. In fact it has established a dollar standard.” ([Location 2696](https://readwise.io/to_kindle?action=open&asin=B001QIGZEK&location=2696)) - The comparison between Britain and France was striking. Solid conservative Britain had pursued the most orthodox and prudent financial policies of any European power, refusing to inflate its way out of debt or to allow its currency to collapse, and had been rewarded with the highest unemployment rate in Europe and a limping economy. By contrast, France had been invaded during the war, suffered the highest ratio of casualties of any country other than Serbia, and seen large tracts of its most productive land leveled and destroyed. After the war, the French had resorted to inflation to lighten the burden of debt and to a weak franc to steal a march on the British by cheapening their goods. Though the government had continuously staggered on the edge of insolvency since the war, the overall economy had done well; exports had boomed. The number of unemployed in France was a fraction of that in Britain. As one contemporary journalist summarized it, “While England is financially sound and economically sick, France is economically sound and financially sick.” ([Location 3430](https://readwise.io/to_kindle?action=open&asin=B001QIGZEK&location=3430)) - A New York Fed official, Pierre Jay, passing through Berlin in June 1927, remarked that Schacht did “not wish to have things seem too good in Germany for fear that it will help the execution of the [Dawes] Plan,” and speculated that he might take some other action deliberately to undermine Germany’s fragile prosperity in order to prove that reparations were too burdensome. ([Location 4504](https://readwise.io/to_kindle?action=open&asin=B001QIGZEK&location=4504)) - By THE END of 1926, this quartet of central bankers had already begun to worry about three of the factors—the U.S. stock market bubble, excessive foreign borrowing by Germany, and an increasingly dysfunctional gold standard—that would eventually lead to the economic upheaval at the end of the decade. None of them, however, yet anticipated the scale of the coming storm. Hjalmar Schacht was locked in combat with his own government; Montagu Norman and Émile Moreau were squabbling with each other; and Benjamin Strong was, as always, battling on two fronts—with his health and with his colleagues within the Federal Reserve System. ([Location 4588](https://readwise.io/to_kindle?action=open&asin=B001QIGZEK&location=4588)) - In other words, Britain’s problem was not its budget deficit, but rather that it had clung to the role of banker to the world without any longer having the money or the resources to do so and at a time when most of the world was a damn poor risk. ([Location 6834](https://readwise.io/to_kindle?action=open&asin=B001QIGZEK&location=6834)) - he had described how gold “is dug up out of a hole in Africa and put down in another hole that is even more inaccessible in Europe and America.” ([Location 6885](https://readwise.io/to_kindle?action=open&asin=B001QIGZEK&location=6885)) - On March 15, when the New York Stock Exchange reopened after being closed for ten days, the Dow jumped 15 percent, the largest move in a single day in its history. ([Location 7264](https://readwise.io/to_kindle?action=open&asin=B001QIGZEK&location=7264))