Book Review: A Black Hole in Economics, by Jim Brown

By Richard

Think about the universe, the whole damn thing; take in planets, stars and wider still, whole solar systems and galaxies. Way too vast to grasp. Your mind twangs back to your own immediate vicinity. Your patch of existence is all you really care about, right? And yet you know the big stuff and the personally relevant are fundamentally linked. The same is true of understanding economics.

How can you figure out why your own personal pocket is so disappointingly empty, given how hard you work and fast you pedal, without first nailing the financial big picture? Especially when you sense it's working against you and the system is insidious.

Isn't it time to look inside it?

Jim Brown is the guide to lead you in his outstanding new book, A Black Hole in Economics. His clarity is vital; the insight it contains, devastating. This book reveals some shocking truths at the heart of money as we know it.

Galt's speech rammed home the message: blank outs are bad. Shrugging off the need for crucial knowledge and expecting to acquire success by chance dooms you to the opposite. You will be driftwood, dashed against the shore, repeatedly. Now, many books cover government policies but rarely the dark matter that is the banking system itself. You know it exists and functions somehow. What if that 'how' is the problem; comprehending it, the solution?

Tackling this scary subject requires flipping between the huge (the financial system) and the granular (money itself). The most pressing task of anyone understanding anything is to mentally crystalise the core concept upon which all ensuing premises depend. Got to get a grip on what this 'money' thing really is (whether gold or fiat currency) and where the hell it comes from. Hence the subtitle to the book: Money Creation and Its Consequences.

Those consequences affect you and your life. Money is your time and effort, the store of your unconsumed production. Your wealth is being eroded or stolen from right under your nose. Jim Brown demonstrates, step by step how, and what you can do to protect yourself. With it comes the joy of true comprehension as everything clicks into place.

Prior to discovering Ayn Rand and Objectivism, my life experience made me cynical of philosophy. In the practical managing of my own money, financial blowhards and bluffers were easy to spot everywhere. The conclusion was always to trust myself when it came to investments, founded on the ability to identify and verify what was true. Just as Rand highlights the need for philosophical detection, so Jim Brown applies the same principles to money and the financial system. In Rand's words 'if a given tenet seems to be true - why? If another tenet seems to be false - why? and how is it being put over?' For finance as for philosophy, finding your own way is more efficient and effective if you are taught by someone who gets it - utterly and totally - AND CAN PROVE IT. No faith in experts required. Only the application of your focus to reality. Jim Brown shows you where to look, how to see.

He achieves this without getting lost in the weeds of too many numbers. Henry Hazlitt's Economics In one Lesson, which I reference closely in another article on this substack, proved how a limited amount of actual numbers are necessary to explain the most knotty of financial issues. The talent of Hazlitt and Brown is to use numbers minimally, not to obfuscate, but to clarify, while, just as importantly, never losing sight of all the relevant parties in a transaction and the implications beyond. Here, on bank reserves, solvency, the fragility of the system.

'Follow the money', said Deep Throat. Jim Brown's book follows a single loan through the system. We witness how it is shifted, renamed, and accounted for - twice over! - demonstrating in the chapter, 'Money for Nothing', THE OFFICIAL PROCESS or spreadsheet magic by which money is created out of thin air. It is mind-blowing. This is not quantitative easing or money printing (although A Black Hole in Economics will cover that too) but about every individual loan, mortgage and bank deposit. How it really works. It's like 'they' don't want you to know. And what's worse, most economics professors and business journalists don't get it themselves. This is why their analysis and proposed financial solutions fall down, floored by reality, in another misguided attempt to separate theory and practice.

A Black Hole In Economics is aptly named. Never more so than when tackling inflation or in the chapter 'The Arsonist and the Fireman' which exposes the 'why' and 'how' behind politicians and central bankers persistence in doubling down on the doom loop of financial repression, putting Einstein's definition of insanity into action: 'doing the same thing over and over again and expecting different results'.

So, if the vortex described when discussing the USA's unpayable debt, has already got a hold of us, how do we avoid personally being sucked into oblivion? Or at least, not sucked in first. Before you're tempted to convert all your fiat currency into tinned food and haul it off to the woods for your final stand, you might want to consider the strategies Jim Brown outlines for surviving and safeguarding your wealth, while continuing to live your best life.

Bolstering your defenses begins with understanding the threat. Accessible, entertaining and fascinating, this book has all you need to know and, by the end of it, you'll be able to explain fractional reserve banking and the broad money supply to boot.

For the big picture finish, none of this monetary system is the metaphysically given. We are not stuck with how we do things now as the only way. But the system and the cover up will continue to metastasise so long as so few understand it.

Money is not the root of all evil, but there are evil roots wrapped tightly all round it. They must be weeded out before they asphyxiate capitalism and life itself. Your future is at stake. You sure you want to remain in the dark, unprotected?

All royalties from A Black Hole in Economics: Money Creation and Its Consequences by Jim Brown generously go to the Ayn Rand Centre UK.