Money at First Sight

In the past 12 months alone, the world's top five central banks have conjured up $1.4 trillion. They called it into existence as a sorcerer might summon the spirits. No wand, no printing press was required; taps on a keyboard did the heavy lifting.

"War and Gold" is a chronicle of fiscal ruination and redemption, with the emphasis on the former. In ages past, observes the historian and politician Kwasi Kwarteng, governments printed currency and levied taxes to fight wars. Now they materialize the money on computer screens to jolt their underachieving and overindebted economies back to life (so far without notable success). Customarily, sound finance resumed with the peace. What's new is that, starting about 1919, the taxing and inflating has kept right on going even after the shooting stopped.

Money is as old a story as the historian cares to make it. Mr. Kwarteng begins his chronicle with the 16th-century Spaniards, who ripped gold and silver from the hands of the Incas and Aztecs and hauled it back to Seville, making that inland port "one of the great financial centers of the world." "It is no accident," the author relates, "that four of the most widely performed operas of the modern era— Mozart's The Marriage of Figaro and Don Giovanni, Rossini's Barber of Seville and Bizet's Carmen—are set in this city."

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