Although no one has asked what I have been reading this summer, I will share it with you anyway! I heartily recommend both of these books. The first one is The Devil in the White City, Murder, Magic, and Madness at the Fair that Changed America by Eric Larson. It is the true story of the Chicago World’s Fair, which took place in 1893. The book provides great detail about life in that time and the extraordinary people who were brave enough to pull together that fair. It also covers the first American modern serial killer who was working in Chicago at that time taking advantage of all of the people streaming into the city for the fair.

Here is a link to purchase the book:

http://www.amazon.com/Devil-White-City-Madness-Changed/dp/0375725601/ref=sr_1_4/105-6816551-7827621?ie=UTF8&s=books&qid=1187195963&sr=1-4

Next up is an easy to read book on economics — be forewarned, the views expressed are contrary to almost everything you will read on the economy. It is Conquer the Crash, You Can Survive and Prosper in a Deflationary Depression by Robert Prechter, Jr.. The title pretty much says it all, it is a very interesting read — especially in light of the events of the last week or so. There is one chapter entitled “Can the Fed Stop Deflation?” which I re-read yesterday. The book’s answer is: “no.” That is based upon (among other things) the example of Japan, where its central bank did everything it could to mitigate that country’s economic crisis which started in 1990, to no avail.

“With these thoughts in mind, let’s return to the idea that the Fed could just print banknotes to stave off bank failures. One can imagine a scenario in which the fed…trades banknotes for portfolios of bad loans, replacing a sea of bad debt with an equal ocean of banknotes, thus smoothly monetizing all defaults in the system without a ripple of protest, reaction or deflation. There are two problems with this scenario. One is that the Fed is a bank, and it would have no desire to go broke buying up worthless portfolios, debasing its own reserves to nothing. Only a government mandate triggered by crisis could compel such action…. Second, the smooth reflation scenario is an ivory tower concoction that sounds plausible only by omitting human beings from it. While the Fed could embark on an aggressive plan to liquefy the banking system with cash in response to a developing credit crisis, that action itself ironically could serve to aggravate deflation, not relieve it.” (pg. 130-31, emphasis added). Does this sound familiar, especially in light of the billions in cash “injections” which are really purchases of debt by the Fed in the last few days?

Here is a link to buy this amazing book:

http://www.amazon.com/Devil-White-City-Madness-Changed/dp/0375725601/ref=sr_1_4/105-6816551-7827621?ie=UTF8&s=books&qid=1187195963&sr=1-4

Mike