Word: goodmans
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...some respects, OPEC is to the dollar what Charles Darwin was to fundamental Christianity; practically overnight a cartel that controlled most of the planet's known oil reserves demonstrated that financial security was not necessarily descended from paper currency. "The store of value," writes Goodman, "had become oil. The yen, the marks, the dollars, the francs were spent; the oil was saved...
Paper Money is clear, succinct and consistently engaging about the evolution of this embarrassing and potentially bank-breaking situation. The book is quite simply the best exposition of the subject available to the general reader. This is not surprising since Goodman, a former magazine journalist, financial editor and investment manager, writes about economics as a lively art, not as a dismal science. Here he is pondering the Big Bang theory of real estate: "Why should bricks and mortar, wood and paint, increase in price even faster than inflation? It is because not only is the currency diminishing in its worth...
There were also what an economist friend of Goodman's calls "exogenous variables," unexpected occurrences that mess up neat computer models. During the '70s, for example, there was a big jump in the cost of grain after the Soviets had to buy in the U.S. to offset their own crop failure. Hamburgers went up too, when billions of fish that would have been ground up as cattle feed disappeared from the waters off Peru...
Behind all this, like a silent case of hypertension, was the huge climb in international oil consumption: 3.7 million bbl. a day in 1950, 34.2 million bbl. a day in 1973. Goodman's paper chase leads to Venezuela, where an intellectual oil minister named Juan Pablo Pérez Alfonzo was having heretical ideas. First: oil, a finite resource, should be conserved...
...Goodman populates this basic plot with characters from Keynes to Khomeini; he simplifies economic theory without being condescending; he gracefully adjusts simplistic views to cohere with the complexities of a world in which things are rarely what they seem and where one must choose enemies more carefully than friends...