The 1977 Insider's Banking & Credit Almanac

The 1977 Insider's Banking & Credit Almanac, by Mark Skousen, Alexandria, Va.: Kephart Communications, 1977, 128 pp., $12.95 (paper)

"Welcome to the exciting world of banking!" opens this compendium of names, places, calculated schemes, and shrewd recommendations on how to manage your financial existence. Welcome indeed! From page one, author Skousen reviews a parade of innovations in banking and credit financing: free and interest-paying checking accounts, "Special Gold Accounts" that carry your balance in convertible gold, overdraft checking accounts, high-roller credit cards, unusual advantages of foreign banks, and ingenious ways of using money to make more money.

This is a book for those "who want to get more for their money and make their way up the financial ladder to success," and Skousen takes to his task with encyclopedic zeal. He covers all aspects of conventional finance—banks, credit unions, loan institutions, repositories, money markets—in scrupulous detail, supported by illustrative calculations and expressed in a straightforward style. The point is to instruct and arm the reader with thorough and pragmatic information about personal finance.

Skousen sounds some general themes that seem to be characteristic of banking in this inflationary era. The most immediate one is that of credit. Common wisdom has had it that one should borrow money seldom and only in extremis. Nowadays, however, with inflation as it is and interest rates encumbered by legislated limitations, there is little real cost involved in borrowing money—and tremendous opportunities to parlay large sums into larger sums! As always, of course, boldness and ambition seem to be the prime requisites for fortune seeking.

Another theme is the Peter-and-Paul leapfrog scheme—"borrowing from Peter to pay Paul"—when the debtor had previously borrowed from Paul. When one can earn considerable interest on borrowed money (and when inflation reduces the real value of debt), such an approach no longer refers to financial short-sightedness. Skousen provides a multitude of recipes for pulling this scam, involving an interlocking circuit of credit-card accounts, overdraft checking accounts, and grace-period savings accounts. All you have to do is keep one step ahead of the banks' computers. To be sure, he explicitly cautions the reader about the consequences of fraudulent intent.

Skousen discusses alternatives to conventional banks and carefully considers the benefits and drawbacks of overseas accounts. He devotes whole chapters to the topics of privacy in one's transactions, how to evaluate the financial integrity of a bank, and (surprise!) how to establish your own bank.

In his concentration on the financial aspects of banking, Skousen may be slighting coverage of other, worthwhile questions. For instance, there is little or no mention of remote-terminal deposit/withdrawal machines (common in the Pacific Northwest) that give the advantage of 24-hour access to banking, seven days a week. You profit nothing by this arrangement—apart from the exceptional convenience.

And this illustrates the book's limits. For its purposes, the book is most useful to those with a four-figure bank account to start with. Nevertheless, it is a competent and complete introduction to the banking arts. On these grounds alone it is worth reading.