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I can't speak for business schools, but economics departments take you in the wrong direction. Their attempt to "model" the financial sector using as few variables as possible is just a joke. In contrast, there is a serious take-away from every one of the books on my list.

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What specifically, and concretely, do you have in mind for students of this course?

Is there any reason not to just host a book club here on Substack? Or were you thinking of something more structured, e.g. with quizzes or tests or papers?

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Yes I would love to.

Perhaps a comparable reference point worth referring to is Perry Merhling's MOOC: https://www.mooc-list.com/course/economics-money-and-banking-coursera

Of course you'll provide a different angle but nonetheless worth scanning. The course (sponsored by INET) lays down Merhling's Money View credit theory of money and the financial system.

Here are 2 short Merhling blog posts topical to your course idea:

1. http://sites.bu.edu/perry/2015/06/08/why-is-money-difficult/

2. https://sites.bu.edu/perry/2017/09/29/cryptos-fear-credit/

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I'd take it, if I can do it from here.

I have a different attitude about many of those institutions. I see banks and the more formal money-transfer services as unnecessary gatekeepers who help cartelize the economy by excluding some people for politics or for not having the right friends, and who profit mostly by rent-seeking rather than creating value. This problem gets worse as banks get more heavily regulated, as tax authorities start demanding that payments to them be funneled through banks, and of course as government and the other formal institutions all get more corrupt.

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I would absolutely be interested in the course you describe. This kind of foundational knowledge would be super beneficial. (Full disclosure: I work in FinTech and deal in DeFi, digital securities, tokenization, etc.)

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I'd sign up!

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Great idea, Arnold. I suggest that at the beginning you explain how systems of payments have evolved so later you can focus only on financial intermediation (you may want to rely on Fama's "Banking in a Theory of Finance" to explain accounting systems of payments and how they differ from currency systems). Then, after the course, you may want to undertake a second one focused on "Distributed Ledgers" by MIT Professor Robert Townsend, a book that can be downloaded free from the MIT Press website.

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I sure would be interested! I’m 15 and haven’t had a formal Economics or finance class yet but have tried to learn on my own. To have an understanding of the base institutions, the incentives involved, etc, would allow me to finally understand everything I’m reading. So much discourse about the finance system doesn’t have background about the institutions themselves so I bet there is a lot of misguided thinking that could be cleared up with more context.

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I have to quibble a bit with the idea that FNMA and FHMLC collapsed because they started buying riskier mortgages; it's accurate but also a bit reductive. A big part of the problem was that they didn't realize just how much additional risk they were taking on. You could, I think partly look at their behavior as a reasonable reaction to increasing competition, but there was also plenty of the "Mania-->Panic-->Crash" dynamic at work also, as I imagine is discussed in the Charles Kinderberger book you mentioned in the reading list.

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Could Kling recommend a serious university class or sequence of classes at a traditional high quality university that would teach relevant parts of banking to tech DeFi types? I suspect if you are serious about DeFi work, you should take some serious classes in traditional banking. The books Kling lists seem more like popular audience fun stuff for after you take some serious classes.

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Useful list - I jotted download a few of the titles. Thanks

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Sounds fascinating

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Yes. It’s a much needed course, hopefully accompanied by a discussion forum. So needed as we continue deeper into the age of digital finance. Lots of fraudulent fantasies to avoid—like metaverses where digital “land” is sold for real fiat currency. Apparently, one can make more nft land in digital worlds!

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Absolutely.

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