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The World Is Curved: Hidden Dangers to the Global Economy

The World Is Curved: Hidden Dangers to the Global Economy

by David M. Smick

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David Smick keeps a low profile, but experts consider him one of the most insightful financial market strategists in the world. For more than two decades, he has conferred with central bankers (such as Alan Greenspan and Ben Bernanke) and advised top Wall Street executives and investors, from George Soros to Michael Steinhardt to Stan Druckenmiller. Political leaders


David Smick keeps a low profile, but experts consider him one of the most insightful financial market strategists in the world. For more than two decades, he has conferred with central bankers (such as Alan Greenspan and Ben Bernanke) and advised top Wall Street executives and investors, from George Soros to Michael Steinhardt to Stan Druckenmiller. Political leaders (from Bill Bradley to Jack Kemp) have regularly sought his policy advice.

The World Is Curved picks up where Thomas Friedman’s The World Is Flat left off, taking readers on an insider’s tour through the private offices of central bankers, finance ministers, even prime ministers. Smick reveals how today’s risky environment came to be—and why the mortgage mess is a symptom of potentially far more devastating trouble. He wrestles with the two questions on everyone’s mind: How bad could things really get in today’s volatile economy? And what can we do about it?

Drawing on riveting anecdotes in language anyone can understand, Smick explains:

  • Why the churning cauldron we call China (the next great bubble to burst) represents a powerful threat to everyone’s pocketbook
  • How Japanese housewives have taken control of their nation’s savings, and why it matters to us
  • How greed-driven bankers and investment bankers have put everyone’s pensions and 401(k)s at risk
  • Why today’s “incredible shrinking central banks” may not be able to save us when the next crisis hits
  • Why the big-money Russian, Chinese, Saudi, and Dubai sovereign wealth funds represent a tectonic shift in global financial power, away from the United States, Europe, and Japan
  • Why the world desperately needs a “big think” financial doctrine to guide today’s dangerous ocean of money
The World Is Curved is the rare book that speaks simultaneously to the Wall Street, Washington, and London elite, yet its apt storytelling shows Main Street readers how to survive in these turbulent times.

Editorial Reviews

Publishers Weekly

Confronting the ever-increasing challenges of globalism and the economic problems plaguing the U.S. from a downward spiraling value of the dollar to the subprime mortgage crisis, Smick argues again and again that the solution to the problem is deregulation and encouraging entrepreneurship. While he examines the U.S. in relation to other emerging and potentially powerful markets (China and India, in particular), Smick argues weakly against Thomas Friedman's more utopian or opportunistic points of view. Jim Bond delivers the book in an accessible and gentle tone. Smick's prose can be a bit inundating, but Bond balances speed with emphasis to keep listeners' attention. A Portfolio hardcover (reviewed online). (Sept.)

Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Library Journal

The 2007-08 subprime financial crisis is the jumping-off point for Smick's (Johnson Smick International) examination of current threats to global prosperity. He explains that although the subprime losses are small in the context of world financial markets, a lack of transparency has diminished investor confidence, dried up financial liquidity, and threatened the very foundations of our world financial system. He says that the growth of global financial markets has made it more difficult for central banks like the U.S. Federal Reserve to intercede effectively in times of crisis. Smick compares the subprime crisis to past events like the UK's forced devaluation of the pound in 1992 and Japan's economic stagnation in the 1990s. He warns of pending dangers like an overheating of the Chinese development juggernaut and the present calls for protectionism by U.S. politicians. He favors a global financial system built on transparency and trust. Smick's role for some 30 years as an economic adviser to central bankers and legislators of all stripes gives him a solid perspective on the global financial system. This summing-up of the subprime debacle and other global financial threats, aimed at general readers, is first rate; highly recommended for all public and academic libraries.-Lawrence Maxted, Gannon Univ. Lib., Erie, PA

Kirkus Reviews
It's a fraught time, writes hedge-fund guru Smick in this timely book. If the "Chinese juggernaut" doesn't sink us, then class warfare and our spendthrift ways will. Borrowing his title, obviously, from Thomas Friedman's optimistic The World Is Flat (2005), Smick dourly notes that in finance, the horizon is near while the dangers lurk out of sight-"nothing happens in a straight line. Instead, there is a continual series of unforeseen discontinuities-twists and turns of uncertainty that often require millions of market participants to stand conventional wisdom on its head." Seeing over the horizon is the job of sound analysts and good political leaders, who seem to be in short supply. Weathering the fiscal storms is ever harder for numerous reasons, one of them the declining vigor of central banks, another, in the United States, an accumulation of personal debt that threatens to put the economy into a Japan-like state of decades-long stagnation. Globalism, some would object, is a vehicle for weakening national economies, but Smick counters that "liberated global financial markets and free trade" are largely responsible for the creation of vast wealth in the last quarter-century (during which the Dow Jones Industrial Average rose from 800 to more than 12,000) and should not be unduly regulated, since economies seem to be slipping beyond the control of national governments. Instability will thus be the norm in the future, especially inasmuch as private concerns dwarf whole economies: The exposure of the Swiss bank UBS to the subprime mortgage meltdown was four times as large as the entire Swiss economy, Smick observes. Couple profligate habits with an ever-growing Chinese economybeholden to no one, and suddenly the future looks like a roller-coaster ride for even the most aggressive investor. A supremely useful book for portfolio planning, though not the thing to give someone who's inclined to worry about the state of the world. Agent: Fredrica Friedman/Fredrica S. Friedman and Company

Product Details

Penguin Publishing Group
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Penguin Group
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576 KB
Age Range:
18 Years

What People are Saying About This

Lawrence Eagleburger
"The World Is Curved is a brilliant, if disturbing, exposé of today's global financial minefields, and an equally compelling description of possible remedies. The next president would do well to read The World Is Curved before taking office next year."--(Lawrence Eagleburger, former U.S. Secretary of State)
Bill Bradley
"The World Is Curved makes transparent all the challenges facing today's new global economy. Read along while Smick exposes the hidden global economic dangers and what steps must be taken to correct an imperfect system."--(Bill Bradley, former U.S. Senator)
Lawrence H. Summers
"David Smick understands, as few do, that international finance depends on politics and passions as much as on policies. Agree or disagree, his sense of where we have been and where we are going deserves close attention. He writes in a way that makes giving close attention a pleasure."--(Lawrence H. Summers, former U.S. Secretary of the Treasury)
George P. Shultz
"The World Is Curved affords an engrossing look at the edifice upon which global finance has been built. It's a vision we ignore at our peril; for instance, we know from experience the dangers of protectionism. This is a vital primer about the zone where finance and statesmanship intersect."--(George P. Shultz, former U.S. Secretary of State)
Barton M. Biggs
"Smick is a world-class thinker. Any serious investor must read what he has to say."--(Barton M. Biggs, Traxis Partners and author of Hedgehogging)
Alan Greenspan
"The World Is Curved is an essential read for those who wish to understand the workings, politics and distresses of the global financial system. David Smick has done an outstanding job in drawing on his interactions with many of the key players in international finance, to produce an insightful and entertaining book."

Meet the Author

David Smick advises some of the world’s most successful money managers through his investment and strategic consulting firm Johnson Smick International, Inc. He is also the founder, editor, and publisher of The International Economy, an acclaimed quarterly. He has served as an adviser to both Republican and Democratic presidential candidates and has written for publications such as The Wall Street Journal and The New York Times. Mr. Smick and his family live in Washington, D.C.

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