The End of Alchemy

The End of Alchemy is a book written by Mervyn King, the former Bank of England Governor from 2003-2013, including during the 2008 financial crisis. The book focuses on the history, flaws, and future of money, banking, and financial systems. Alchemy is referring to the money creation process in which banks 'manufacture' the new money supply as debt in the debt-based monetary system, where banks create margin for themselves and invest it as debt, such as mortgages, loans, bonds, treasuries, and other debt-based financial instruments.

The leverage created by banks creates the economic bubbles that the Central banks have to pop with deflationary monetary policy that typically causes unemployment to rise.

In Chapter 3, titled "The Good, the Bad, and the Ugly" King explains how in the 1920s countries tried to reinstate the gold standard at pre-World War I parities causing deflationary pressures and the Great Contraction through tight monetary policy, causing the Great Depression.

• Credit theory of money
• Radical uncertainty
• Inverted yield curve
• Lender of last resort and Pawnbroker for all seasons
• Chicago plan - 100% reserve requirement for banks
• Modern monetary theory
• Disequilibrium macroeconomics
• Prisoner's dilemma and Trust
• Northern Rock - British bank nationalized during the Great Recession
• The Age of Debt Bubbles
• Cryptocurrency