Niall Ferguson's new book, The Ascent of Money, is an excellent read for anyone interested in the origin, operation and inter-workings of money and banking. Ferguson, a distinguished British scholar and author, has produced a masterpiece that traces the history of finance from the ancient Babylonians, through the Medici's of the Italian Renaissance, through the emergence of "true" banks of 17th century London and Amsterdam to today's global, 24-hour, inter-related web of electronic transactions.

The book makes a compelling case that the development and evolution of ever-more sophisticated types of monetary concepts and transaction methods are as essential as raw materials and tehnology development for the advancement of civilization. Indeed, in the current era where banker bashing is trendy, Ferguson points out that this phenomenon is hardly new. Financiers seem to be frequently blamed for a nation's trouble from Shylock to Bernie Madoff. Yet, he cites compelling evidence that the absence of banking (and their associated instruments of credit) are much more likely to be the cause of society ills than an over-abundance.

It is especially note-worthy that the book was published in May of 2008, a full 4 months prior to the full extent of the current financial crisis becoming clear. Ferguson displays remarkable prescience in describing the risks of the increasing dependence of the world economy on credit-driven consumption fueled by rapidly escalating real estate markets linked to complex financial instruments. Anyone wanting a primer on the interlocked nature of banking, insurance and global monetary policy really should read this book.

Even though filled with detail, The Ascent of Money, is highly readable by the lay person not intimately familiar with derivatives, credit default swaps or other arcane financial properties. Ferguson's stated intention in writing the book is to educate. This he certainly achieves, but he also provokes thought into the nature of money and our relationship to it, and all those institutions and people that create it, manage it, save it and spend it.

All the best,

Ray