How Money Works: The Facts Visually Explained 024122599X, 9780241225998

Table of contents :
Contents 5...... 0007
Introduction 8...... 0011
MONEY BASICS 10...... 0013
The evolution of money 12...... 0014
Barter, IOUs, and money 14...... 0016
Artifacts of money 16...... 0018
Emergence of modern economics 20...... 0022
Economic theories and money 22...... 0024
PROFIT-MAKING AND FINANCIAL INSTITUTIONS 24...... 0027
Corporate accounting 26...... 0028
Net income 28...... 0030
Expensing vs capitalizing 30...... 0032
Depreciation, amortization, depletion 32...... 0034
Smoothing earnings 34...... 0036
Cash flow 36...... 0038
Gearing ratio and risk 40...... 0042
How companies use debt 42...... 0044
Financial reporting 44...... 0046
Financial instruments 46...... 0048
Shares 48...... 0050
Bonds 50...... 0052
Derivatives 52...... 0054
Financial markets 54...... 0056
The money market 56...... 0058
Foreign exchange and trading 58...... 0060
Primary and secondary markets 60...... 0062
Predicting market changes 62...... 0064
Arbitrage 64...... 0066
Manipulating the stock market 66...... 0068
Day trading 68...... 0070
Financial institutions 70...... 0072
Commercial and mortgage banks 72...... 0074
Investment banks 74...... 0076
Brokerages 76...... 0078
Insurance risk and regulation 78...... 0080
Investment companies 80...... 0082
Nonbank financial institutions 82...... 0084
GOVERNMENT FINANCE AND PUBLIC MONEY 84...... 0087
The money supply 86...... 0088
Increasing money circulation 88...... 0090
Banking reserves 90...... 0092
Recession and the money supply 92...... 0094
Recession to depression 94...... 0096
Managing state finance 96...... 0098
Government and the money supply 98...... 0100
The central bank 100...... 0102
Budget constraint 104...... 0106
How tax works 106...... 0108
Government borrowing 108...... 0110
Public debt 110...... 0112
Accountability 112...... 0114
Attempting control 114...... 0116
Reading economic indicators 116...... 0118
Deciding on economic policy 118...... 0120
Interest rates 120...... 0122
Quantitative easing 124...... 0126
The level of taxation 126...... 0128
Government spending 128...... 0130
How governments provide for the future 130...... 0132
Inflation 132...... 0134
Balance of payments 136...... 0138
International currency fluctuations 138...... 0140
Managing state pensions 140...... 0142
Why governments fail financially 142...... 0144
How governments fail: hyperinflation 144...... 0146
How governments fail: debt default 146...... 0148
PERSONAL FINANCE 148...... 0151
Worth, wealth, and income 150...... 0152
Calculating and analyzing net worth 152...... 0154
Income and wealth 154...... 0156
Converting income into wealth 156...... 0158
Generating income 158...... 0160
Generating wealth 160...... 0162
Investments for income 162...... 0164
Dividends from shares 164...... 0166
Earning income from savings 166...... 0168
Investing in managed funds 168...... 0170
Rental income from property 170...... 0172
Life assurance 172...... 0174
Wealth-building investments 174...... 0176
Investing in property 176...... 0178
Home equity 180...... 0182
Shares 182...... 0184
Managed funds 184...... 0186
Managing investments 186...... 0188
Asset allocation and diversification 188...... 0190
Dollar cost averaging 190...... 0192
Risk tolerance 192...... 0194
The optimal portfolio 194...... 0196
Pensions and retirement 196...... 0198
Saving and investing for a pension 198...... 0200
Converting pensions into income 202...... 0204
Debt 204...... 0206
Why we use debt 206...... 0208
Interest and compound interest 208...... 0210
Loans 210...... 0212
Mortgages 212...... 0214
Credit unions 216...... 0218
Credit cards 218...... 0220
Money in the digital age 220...... 0222
Cryptocurrency 222...... 0224
Bitcoin 224...... 0226
Crowdfunding 226...... 0228
Peer-to-peer lending 228...... 0230
Money in the US 230...... 0233
Index 248...... 0250
Acknowledgments 256...... 0258