A certified public accountant and real estate investor offers a lucid debut overview of America’s financial system.
Readers interested in a book on the inner workings of the American economy will find that Cline’s work nicely fits the bill. In its first part, he covers confidence, monetary policy, and fiscal policy—the economy’s “three pillars.” The most important of these is confidence, he writes: “It sets the tone for everything else, infusing a positive spirit that inspires the ability to overcome seemingly insurmountable odds.” He then runs through basic accounting principles (which are useful both for consumers and business owners), explains in simple terms how banks operate, and provides an understandable description of the working relationship between the Federal Reserve Bank and the U.S. Treasury Department. He appropriately includes three chapters that specifically address the global economy. In them, he discusses the interrelationship of world currencies and the establishment of a “reserve currency.” The most intriguing chapter, however, concerns China’s “currency sterilization,” or monetary intervention. According to Cline, other countries have employed similar tactics, but “China carries it a step further, creating an unfair advantage over its trading partners.” The author’s in-depth description of that country’s actions to keep “the value of the yuan artificially low against the dollar in order to perpetuate the advantage of suppressed labor and manufacturing costs” may be too technical for some readers, but it’s insightful nonetheless. The book’s second part concerns three specific investment vehicles, which the author chose due to their unique impact on American and global economies: real estate, oil, and gold. Here, as in the previous section, the author provides useful overviews of each area in uncomplicated language. His discussion of how oil is priced, for example, brings welcome clarity and immediacy to rising and falling gas prices. In the book’s closing, Cline concludes, “Understanding the economy does not need to be an arduous task. It really is quite simple.” Overall, this book provides a useful and highly comprehensible introduction to the American financial system, in the context of an increasingly complex world economy.
A cogent, if academic work, unencumbered by financial jargon and appropriate for any reader.