A Brief History of Doom by Richard Vague

This book’s full title is A Brief History of Doom: Two Hundred Years of Financial Crises. This is an interesting book talking about passed financial crisis being mainly caused by private. Richard Vague tells a good story.

One of the things that is pointed out is that investors sometimes bought bonds because they thought they were safer than buying a company’s stock. After all, bond holders have to be paid before stockholders get any money. However, if a company goes bankrupt, bondholders lose also. The lesson should be that you should not buy bonds from a company for which you would not buy the stock.

The thing that Richard Vague is pointing out in this book is that recessions are caused by private debt increasing dramatically against the GDP. Private debt is both of individuals and companies. Usually overbuilding comes into play (railways, real estate). Recessions are worsened then when people then stop spending. A lot of the economy, especially in the US, is dependent on individuals spending.

One of the things he points out is that the recovery from 2008 would have been much better if individual households who were under water because of mortgages were helped out. Only the banks and financial institutions were help. A lot of people in the US are still angry about that.

I live in Toronto and this book comes at a handy time because I have been worried about all the condo building going on. There has been an incredible number of condos built. Real estate prices just go higher and higher. You have to wonder who is buying all these condos. At night the ones that are built and bought seem to have few lights on at night. So, we seem to be overbuilding and anything I have read is that Canadians have a very high level of debt.

There are few reviews on Good Reads. On Good Reads, a lot of people have rated this book and usually with 4 and 5 stars. Joseph N. DiStefano does a review of this book for Philadelphia Inquirer. Some of the best reviews on in newspapers. Another good place is blogs. There is a good review also on the Dollar and Sense blog.

Richard Vague speaks on YouTube about his book. He speaks until around 14:41 and then the interview begins. He said that the US does not have a problem with private debt currently, however, Asia does. He thinks our next crisis will come from Asia. He thinks that ordinary people should have gotten debt relief in the 2008 crisis just as the banks got help. Rob Johnson interviews Richard Vague at the Institute for New Economic Thinking. Richard Vague talks at Oxford Union on why he has little hope for the next decade. Richard Vague talks about debt on New Economic Thinking.

An index of the books I have reviewed are on my website at Books. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.