This book was recommended by Tyler Cowen (Marginal Revolution) as one of the best books of the year.
The book is a history of money in China over the past 1100 years. Silver (not gold) was the underlying preference of the rulers and ruled in China. Paper money was used earlier than elsewhere in the world, but lost trust when over-issued during crises (war-related, mainly).
Interesting tidbits:
Copper coins circulated for day-to-day transactions. But the value of copper was low. So copper coins were mined with holes and “strings” of coins were the higher denominations.
Silver coins were not minted until late in history. China used “taels” instead. Shaped blocks of silver of a specified weight and purity.
China had few sources of silver (and gold) internally. So creating money was very expensive. The copper coinage was also expensive — often, the coined copper was more valuable when melted down. So there were often periods of “money famine” — not enough money in circulation for day-to-day uses.
Silver flowed into China via trade. When the Spanish conquered the new world, silver mines in Mexico and South America flooded the world with silver. By some estimates, maybe 1/3 of this silver ended up in China. This led to market price distortions (inflation/deflation), similar to what was happening in Europe.
Eventually, the European countries settled on the gold standard, but China did not. This led to trade-balance issues.
Bottom Line: I found the book interesting, but I have insufficient knowledge of world history or economics or finance to appreciate most of the insights presented.
Aside: I have recently been interested in understanding Bitcoin and block-chain technology in general. I don’t understand why the Bitcoiners are so ‘invested’ in Bitcoin. Or why the ‘gold bugs’ are so invested in precious metals. Comes down to the basic question — “what is money?” I haven’t found a good answer.
Apparently, money only has “value” if other people think it is valuable and will accept it in trade. So basically, Bitcoin has value because there are enough Bitcoin fanatics to support it. Sigh. Is it another tulip-bubble? I can’t tell.