Peter L. Bernstein Classics Collection

Capital Ideas, Against the Gods, The Power of Gold and Capital Ideas Evolving

Peter L. Bernstein

• Publisher: Wiley
• Year: 2012
• Print ISBN: 9781118426708
• eBook ISBN: 9781118519561
• Edition: 1
• Topic: Business
• Subtopic: Finance
• Index: Business

A classic collection of titles from one of the world's greatest financial writers

One of the foremost financial writers of his generation, the late Peter Bernstein had the unique ability to synthesize intellectual history and economics with the theory and practice of investment management. Now, with the Peter L. Bernstein Classics Collection e-bundle, you will be able to enjoy some of the most important and critically acclaimed books by this engaging investment writer— Capital Ideas, Against the Gods, The Power of Gold, and Capital Ideas Evolving.

• Capital Ideas and Capital Ideas Evolving traces the origins of modern Wall Street, from the pioneering work of early scholars and the development of new theories in risk, valuation, and investment returns, to the actual implementation of these theories in the real world of investment management
• Against the Gods skillfully explores one of the most profound issues of our time—the role of risk in our society—in a non-technical and accessible style
• The Power of Gold tells the story of how history's most coveted, celebrated, and inglorious asset has inspired romantic myths, daring explorations, and titanic struggles for money and power

Engaging and informative, Peter L. Bernstein Classics Collection puts the insights of one of the greatest financial writers of our time at your fingertips.

Contents

Foreword

Acknowledgments

Prologue

A Metal For All Seasons

Chapter 1: Get Gold at All Hazards

Chapter 2: Midas’s Wish and the Creatures of Pure Chance

Chapter 3: Darius’s Bathtub and the Cackling of the Geese

Chapter 4: The Symbol and the Faith

Chapter 5: Gold, Salt, and the Blessed Town

Chapter 6: The Legacy of Eoba, Babba, and Udd

Chapter 7: The Great Chain Reaction

Chapter 8: The Disintegrating Age and the Kings’ Ransoms

Chapter 9: The Sacred Thirst

The Path to Triumph

Chapter 10: The Fatal Poison and Private Money

Chapter 11: The Asian Necropolis and Hien Tsung’s Inadvertent Innovation

Chapter 12: The Great Recoinage and the Last of the Magicians

Chapter 13: The True Doctrine and the Great Evil

Chapter 14: The New Mistress and the Cursed Discovery

Chapter 15: The Badge of Honor

Chapter 16: The Most Stupendous Conspiracy and the Endless Chain

The Descent From Glory

Chapter 17: The Norman Conquest

Chapter 18: The End of the Epoch

Chapter 19: The Transcending Value

Chapter 20: World War Eight and the Thirty Ounces of Gold

Epilogue

Bibliography

Index

Copyright © 2000, 2012 by Peter L. Bernstein. All rights reserved.

Published by John Wiley & Sons, Inc.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Bernstein, Peter L.

The power of gold : the history of an obsession / Peter L. Bernstein.

p. cm.

Includes bibliographical references and index.

ISBN 0-471-25210-7 (cloth); ISBN 978-1-118-27010-3 (paper); ISBN 978-1-118-28269-4 (ebk.); ISBN 978-1-118-28414-8 (ebk.); ISBN 978-1-118-28522-0 (ebk.)

1. Gold—Folklore. 2. Gold—History. 3. Gold—Social aspects. I. Title.

GR810.B47 2000

398′.365—dc21 00-036647

For Barbara, once again and always.

They wonder much to hear that gold, which in itself is so useless a thing, should be everywhere so much esteemed, that even men for whom it was made, and by whom it has its value, should yet be thought of less value than it is.

Sir Thomas More (1478–1535). Utopia of Jewels and Wealth

Foreword

What could be timelier than a new release of Peter Bernstein’s authoritative book The Power of Gold?

Bernstein wrote at the turn of the century—only a decade ago, but what a contrast from today in the world of business and finance. Economic growth in the economically developed world had been sustained for a decade. Reasonable price stability had been achieved. Huge gains in the world’s stock markets exceeded past experience.

Almost everywhere, central bankers were esteemed and trusted. Central bank independence came to be taken as the indispensable guarantor of stability. The mood was epitomized by the creation of a brand-new central bank to manage the European common currency, itself a key initiative toward closer European union. With its independence from the sovereign states of the “Eurozone” embodied in a solemn treaty, the new central bank reached a virtually unprecedented state, freed of direct accountability to a political government.

For decades, no central bank or government had maintained convertibility of its currencies into gold. For the most part, major currencies were “floated” in exchange markets. In one of Bernstein’s apt phrases, gold had been “emasculated.” With its enduring luster, its malleability, its resistance to wear and corrosion, it could remain useful for adornment and jewelry and to a limited exchange as a tiny component of some electronic devices. Yet it had been shorn of monetary significance. In the 1990s, central banks, the custodians of national financial resources, were tending to sell from their golden hoards acquired over the decades, even at declining prices.

All of that was a very long way from the pleading of General de Gaulle in the 1960s for the world to return to a full-blooded gold standard. Bernstein recalled his eloquence: “There can be no other criterion, no other standard, than gold—gold that never changes, that can be shipped in ingots, bars, coins, that has no nationality, and that is eternally and universally accepted as the unalterable fiduciary value par excellence.” Somehow, in his lament for the gold standard, de Gaulle neglected to note that while gold may be immutable as a metal, its price could and did change—change in the marketplace or by government decision, as he himself strongly advocated at the time.

Here we are, only a decade or so after Bernstein wrote, in the midst of demonstrable—perhaps unprecedented—volatility in the price of gold. Neither de Gaulle nor Bernstein could have envisaged the level of the gold price as I write, 50 times the value in the 1960s and 5 times the price 10 years ago. Yet before his death, Peter had seen enough of the market turmoil to confirm his parting conclusion: in the midst of economic fears and financial uncertainty, gold would be back in demand.

Peter Bernstein was an anomaly in the modern world of investment, a man with a deep understanding of finance in all of its up-to-date mathematical and theoretical manifestations but also a student of history. The story of gold is filled with the foibles and vulnerabilities of kings and presidents and indeed of all human judgments. More than that, Peter can write—write in a way that the arcane becomes understandable, that the history of gold becomes a fascinating story of the rise and fall of nations and civilizations.

Now, only a few years after Bernstein’s death, our capitalist civilization is being challenged. Most of the so-called developed world is suffering through an extended recession and high unemployment. The euro and the European Central Bank so confidently launched a decade ago are in possibly even mortal crisis. Governments and central banks seem to have lost their established bearings. Distrust is rife.

There is a yearning for solidity and stability. So, it is not entirely surprising that we hear some urging that a monetary role for gold be restored. At the very least, gold remains for some a kind of last resort, a safeguard against threats seen and unseen. If gold has lost the essential elements of money, it at least remains for some people a store of value.

That is a very long way from restoring any approximation of the classic gold standard, including the residual role of gold in the Bretton Woods system. We have been left with a continuing, elusive challenge of combining needed discipline in our monetary and fiscal affairs with a degree of flexibility in exchange rates.

The need for realism in the reform of our monetary system is what makes Bernstein’s story The Power of Gold so timely. It is a compelling reminder that maintaining a fixed price for gold and fixed exchange rates was ...

Table of contents

• Cover
• Contents
• Title
• Copyright
• Introducing Wiley Investment Classics
• Publisher’s Note
• Foreword
• Capital Ideas
• Against The Gods
• The Power of Gold
• Capital Ideas Evolving