Without libraries with English books, I’ve been itching for books to read in Japan. Luckily, when I scanned my friend’s bookshelf a couple weeks ago I came across Craig Karmin’s book, Biography of the Dollar: How the Mighty Buck Conquered the World and Why It’s Under Siege.
Karmin is a renowned reporter for The Wall Street Journal so I decided to dive into a subject I didn’t know too much about. Besides, I write about money 3 times a week – and it doesn’t hurt learning more about your favorite subject.
The book is split into just 6 chapters, but is still 250 pages. Karmin discusses several aspect’s of the dollar including its rise to power, history, how it’s made, and impact on the world
With all of the negative media talk about the dollar recently, it was scary to read how vital the dollar is to the world’s financial health. Many countries outside of the U.S. rely on the dollar for trading and even Saddam Hussein’s palace had hundreds of thousands of dollars stored away in case of a financial emergency.
Here’s my thoughts on the positive and negative parts of the book.
You can tell Karmin has spent a better part of his adult life writing about finance for the WSJ. His inside stories and accounts of financial moments are really fascinating. For example, he talks in depth about the specifics behind the foreign currency market. I learned how popular this market is and that the amount of trading done on the forex market destroys the amount done on the regular stock market.
My favorite parts of the book were the information about counterfeiting. The amount of time and energy the government puts into thwarting potential counterfeiters is truly amazing. The specifics within the bill, the way it feels to the finger tips, and the specific weight are all meticulously discussed and reworked.
Readers also get an insider’s look at the Bureau of Engraving and Printing. These are the people in charge of making the dollars that are sent around the world. The security is tight and the BEP is actually a private company – charging the Federal Reserve around 5.7 cents for each dollar it creates.
The accounts of BEP workers trying to steal cash was my favorite part of the book. Any bills that are mistakes are to be destroyed, but occasionally workers try to steal them as they are awaiting their death. They usually didn’t get far, but the book actually had me laughing out loud at some of the creative ways workers tried to smuggle out money.
Besides, learning about the tangible money, it was fascinating to learn how much other countries rely on the dollar. For example, Ecuador, El Salavador, and East Timor have all been using the dollar for almost 10 years. This is incredible to me, and really shows how powerful the dollar is.
Other countries will only trade with dollars. So if a country called Austin wants to trade with a country called Morgan, Austin will change their money to dollars, and then to Morgan’s money. The dollar is the great equalizer in many trades around the world.
This is a picky choice, but I didn’t really care for stories about what made the dollar rise or fall. The last 1/3 of the book read rather slow for me and I found myself skipping sections because I wasn’t interested in what caused the dollar to fall in 1981. If you’re interested in the economics of the dollar, you’ll love this part, but I could’ve done without it.
The book isn’t for beginners so if you’re looking to learn more about money for the first time, I wouldn’t start with Biography of the Dollar. Some of the discussions about foreign exchange markets were over my head and I had to skip sections that seemed way too complicated for my interests.
I loved the parts about the tangible dollar, but would’ve liked to learn more about the history behind the dollar’s creation. Not the idea of the dollar, but the physical piece of paper you and I have in our wallets. Who’s idea was the dollar? What were some stories about its rise to what we have today? This was the most fascinating stuff to me, and I was disappointed the book left me wanting more in that category.
To Read or Not to Read?
I would suggest The Biography of the Dollar to anyone who is intrigued by money at all. As the dollar loses power, it’s important to understand what we actually have in our wallets.
In 2006, only 66% of the world’s cash reserves were in dollars, compared to 71% in 1999. More and more people are holding their money in multiple currencies and this book will introduce you to a new way of thinking about your money.
If you’re not interested in the economics of the dollar, but are interested in the history of the dollar, then you’ll still enjoy the read.
It’ll be interesting to come back to this book in 25 years to see how the dollar’s place in the world has changed. Karmin and Biography of the Dollar does a terrific job of making sure you better understand the complexities of the dollar and will be able to react accordingly as the dollar’s place in the world changes over the next couple of decades.
Grade: 78 out of 100
Where do you think the dollar will be in 25 years?