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Dice Have No Memory
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Dice Have No Memory

Big Bets and Bad Economics from Paris to the Pampas

William Bonner
Wiley, 2011
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Editorial Rating

8

Qualities

  • Controversial
  • Innovative
  • Engaging

Recommendation

Bill Bonner’s curmudgeonly blog posts are so well crafted that they are pretty entertaining, even if you disagree with his conclusions. This collection of his best columns from 1999 to 2010 from his newsletter, The Daily Reckoning, displays his unusual combination of hard-hitting analysis and witty writing. The compilation includes excerpts in which Bonner recommended gold when gold wasn’t cool and bashed Alan Greenspan before that was fashionable. A constant contrarian, Bonner takes positions that might seem extreme: Central banking is a waste of time, he believes, and government can do nothing right. Yet Bonner delivers his opinions in a style that can make even a skeptic enjoy his wry way with words. While some of his ideas seem intended more to shock than illuminate – he advocates letting a Great Depression happen and contends that people are poor because they prefer poverty to working – getAbstract suggests this collection as a distinctive, contentious and conservatively controversial take on economic doings.

Summary

The Folly of Economists

Economists, especially those who run central banks, are usually wrong. To call economics a science is an insult to science: While physical science discovers provable and unchanging facts, the “dismal science” of economics is more akin to reading the tea leaves of data and statistics that don’t take into account human emotions and reactions. Money is no longer tied to a gold standard, so the value of a currency relies on nothing more than faith. During the dot-com hysteria of the late 1990s and the housing bubble of the early 2000s, investors abandoned rational thought and succumbed to fantasy: After all, they reasoned, what goes up and up will continue to rise indefinitely. During these periods, everyone forgot to think about what could go wrong and focused instead on what could go right. These spells of herdlike behavior reveal the illusions behind economists’ pseudoscientific theories of rational markets and logical pricing of assets. But just as successive throws of the dice don’t depend on the outcome of previous throws, so, too, economic realities are independent of economists’ data, statistics and prognostications.

Central Bankers Are...

About the Author

Bill Bonner is the president and CEO of Agora Publishing. Bonner also created The Daily Reckoning blog.

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