Preparing To Publish Novel About Financial Crisis

[WFT]

Just introducing myself. I'm preparing to self-publish my first novel, The Money Suckers, about the financial crisis. I came to this board to learn more about e-book publishing options. So... hello!

[Mason]

Welcome to the forums, can't wait to hear more about your novel

[MickeyC]

Hi WFT and welcome to MobileRead

[columbus]

Hi WFT welcome aboard

[WFT]

Originally Posted by Mason

Welcome to the forums, can't wait to hear more about your novel

Hi Mason,

Thank you (and the others) for your kind welcome. I actually came to MobileRead because I wanted to learn about the technical issues involved in publishing for e-readers. Still, I'm happy to tell you whatever you want to know about my book.

I wrote my novel as an entertaining story because when people enjoy the story, it's much easier to handle the concepts involved. Various non-fiction books have been written on the subject since Sept./Oct. 2008, but financial non-fiction is extremely boring to read (even for me). So I invented a tale that blends the undiscussed root causes of the crisis into a fictional story of conspiracy and government ties to terrorism.

The story includes (among other things) a kidnapping, a murder attempt, a wild chase scene, and an underground movement called the Agorist Underground (or "AU" for short... an "agorist" is a classical Greek word that means "marketplace") whose goal is major monetary system reform. The AU ends up rescuing the protagonists and staging a nationally-televised program challenging the "official" story about the roots of the financial crisis. The program takes the form of a debate between the top financial leaders and spokesmen for the AU.

I also went out of my way to make my characters as real as I could, people dealing with extraordinary circumstances, yet displaying their own foibles and humanity in the process. I spend a significant amount of time in the novel focusing on their interpersonal relationships, particularly among the three main protagonists.

My motivation in writing the novel comes from the fact that most people only know about the financial crisis what the newscasters and reporters tell them. An awful lot of the information put out by the talking heads, the politicians, the bureaucrats, and the financial experts is misleading at best.

For instance, the claim that the crisis was caused by sub-prime mortgages is way off the mark. Certainly, sub-primes were the symptom that brought the whole crisis to light, and the banks suffered because of them. However, sub-prime mortgages were issued in such large numbers because the legal, regulatory, and financial system surrounding banking encourages such behavior, not merely because of banker greed.

Today, the financial and political leaders are reporting that the economies of the U.S. and the world are beginning to pull out of the recession. This is also very misleading, because we're not anywhere near done with mortgage foreclosures. 2008 was a peak year, but we've known since 2007 or even before that there would be a second peak year for foreclosures: 2011. 2009 was expected to be a "lull" year (by those who pay attention to these things), and indeed it is playing out that way. But mortgage foreclosures will definitely increase in 2010 and peak again in 2011. Do the newsies, the politicos, and the bureaucrats report this fact? Of course not.

Further, mortgage failures are increasing even faster for prime mortgages. In fact, most recently, the rate of sub-prime mortgage foreclosures declined significantly, while prime mortgage types, previously thought to be "safe" have increased in foreclosure activity dramatically.

This crisis, unfortunately, is far from over.

The bigger question is: what really caused the crisis, if not sub-prime mortgages? The answer is that the monetary system of all countries is rigged, both in the U.S. and abroad, in such a way as to encourage risky lending practices. Indeed, the money supply itself depends on lending for its growth and survival!

Most people don't realize that all modern, major currencies are debt-based. By this I mean that every single dollar, euro, yen, etc. are issued by making a loan. I realize that sounds crazy, but it's true. It also has some very negative consequences that go along with such a system, consequences which include the current financial crisis.

I've probably rambled on more than you were asking for, so forgive me.

[Mason]

No, actually you made me want to read it even more

[WFT]

Originally Posted by Mason

No, actually you made me want to read it even more

Thanks! That's encouraging!

[SpiderMatt]

Your explanation has also increased my interest in the book. When I first saw that you were self-publishing a book on the financial crisis I assumed you would be avoiding the subject of the inherent problems of our monetary system, not directly confronting them. This is, of course, what I have come to expect from mainstream media. I'm interested in how you present the material in your book.

[WFT]

Originally Posted by SpiderMatt

Your explanation has also increased my interest in the book. When I first saw that you were self-publishing a book on the financial crisis I assumed you would be avoiding the subject of the inherent problems of our monetary system, not directly confronting them. This is, of course, what I have come to expect from mainstream media. I'm interested in how you present the material in your book.

Hmm... I'm not sure how to answer your question to your satisfaction, but let me give it a try.

The book is a novel, so my main purpose is to tell an entertaining, fictional story. I wanted to avoid getting too technical about monetary and banking theory because people get lost so easily. Frankly, monetary system theory is dry, abstract, and confusing.

I've tried explaining such things as fractional reserve banking and debt monetization to people in-person, sitting across a living room or whatever, with only minimal glazing over of the eyes. Usually, I can do so successfully, and I get responses which suggest that they understand what I've explained.

However, 10 minutes later that same person will usually be unable to repeat back to me the things I just explained to them earlier. Again, the main reasons are that the material is so dry, so abstract, and so confusing that it's hard for most people to retain the concepts. It's almost like people experience a form of selective amnesia over the topic, regardless of how interested they are due to the crisis. I remember going through the same confusion myself some 30 years ago when I was first exposed to theory. It took a lot of diligent study before I could finally hold the often self-contradictory concepts involved in my head.

Clearly, this "amnesia" causes tremendous problems when it comes to writing an entertaining story. So, I made a conscious decision. Instead of writing about the technical aspects, I chose instead to summarize the root causes of banking and monetary system flaws. I gave a lot of thought to the overall problem, looked at the history of the problem, and distilled the whole thing down to some very basic, root-level principles which really drive the whole, dysfunctional system. Here's how I summarized them:

I claim that since the earliest days of modern banking dating back to the late 17th Century in Britain (and possibly earlier), banks and governments have engaged in three forms of what I call "legalized fraud." They are:

1. Banks lending money that does not belong to the banks
2. Banks lending money long-term using short-term funds
3. Governments and banks issuing currency backed by nothing but debt and false promises

I maintain that these three forms of "legalized fraud," so-called because they are fraudulent in nature but are considered legal, ethical activity by government authorities, may be found in various combinations at the root of every financial crisis experienced in United States history, as well as nearly all of the financial crises experienced abroad in other countries around the world. If we make these forms of fraud illegal, we will go a long, long way toward eliminating systemic financial crises for present and future generations.

Let me take a moment to clarify each of the items in my list.

Banks lending money that does not belong to the banks
By this I mean that banks take money people deposit in their checking, savings, money market, and CD accounts, and lend it out, keeping a percentage on reserve in order to meet day-to-day demands for cash and transaction clearing. They count on the fact that most of the time people don't need direct use of most of their money, so they can legally "get away" with such behavior.

This is the vital essence of fractional reserve banking. For those who posses a more complete understanding of the theory of fractional reserve banking, obviously I've grossly simplified the concept, but I argue that this is all the average person really needs to understand in order to grasp why fractional reserve banking should be eliminated. By identifying the practice as fraud and then leaving the concept at that, I've given people a very clear reason for opposing it. After all, virtually everyone agrees that fraud is wrong and should be illegal. Most people are aware that banks do this kind of thing. They've just never thought of this particular practice in this light, and they certainly have not associated it with the financial crisis. Yet, without it, the financial crisis could not have occurred.

Banks lending money long-term using short-term funds
By this, I mean that banks take checking, savings, money market, and CD money, all of which are deposited either for available withdrawal "on demand" or to be held at interest for very short terms (three months, six months, etc.). The banks then lend this money out in the form of mortgages (typically 30 years), business loans (typically 1-5 years), car loans (typically 3-5 years), equity loans (various terms), etc.

This second form of legalized fraud is obviously very closely related to the first one I identified, although they're not identical. Again, this is a banking practice most people already know about, but very, very few average people pay any attention to it. Yet, if you think about it, it's not so surprising that banks get into trouble doing it. Rather, the surprise is that they don't get in trouble more often than they actually do! The reasons for this are varied and are beyond the limited scope I've set for the novel, but the point remains the same. This practice definitely helped cause the financial crisis.

Governments and banks issuing currency backed by nothing but debt and false promises
This final practice has been around for centuries. Governments and banks have a long history of debasing the currencies they issue and maintain. The nature of fiat currencies (money that is declared to be money by government decree) contributes directly to this history, as do the other two forms of legalized fraud I identified.

For a time, of course, we were on the "gold standard," which means that gold was set at an official price (about $20.65 an ounce) for many years, and the banks and government promised to redeem the paper for the gold on demand during that period. The problem was that they issued far more paper at that rate than they had in gold on hand to cover it.

If any of us private citizens engaged in any of these three activities, we would be arrested. The small minority of bankers and government officials who "officially" engage in it get rewarded instead.

As with other forms of fraud, legalized fraud is very profitable. After all, those who engage in it don't actually have to earn the money they lend out or issue. The Federal Reserve, like all other central banks these days, issues new currency by simply creating it with the stroke of a pen or a computer key. What a wonderful way to make money! [every pun intended]

Anyway, that's about as deeply as I go into the issue in the novel. I do touch on some of the many consequences of these activities, but that's about it. Let me know if this answers your question.

[kazbates]

Welcome to MobileRead, WFT!

[SpiderMatt]

I mostly meant I'm interested in seeing the book myself to see how all this economic theory is presented in a fictional framework. It sounds like you're in agreement with a large part of Austrian Economics, which is definitely something with which I can get on board. :-) This is definitely a topic worthy of much more coverage than it receives by the news. I wish you all the best with the book and I hope you keep us posted.

Have you considered http://www.smashwords.com as an ebook retailer? The site is getting pretty popular on these boards because authors keep a larger percentage of their money than they would publishing through someone like Amazon and the site provides an array of popular formats sans DRM. I know that would be a popular decision around these parts, especially if you coupled that with a low price. If you really want to get it out there, you could always release it for free under the Creative Commons License. Your book would show up on a number of sites rather quickly, I'm sure. I understand why this isn't an appealing option for many authors, though. Publishing with Amazon isn't very popular because they take like 70% (I think that's what I read). It's something ridiculous. However, publishing with Amazon does give you a larger potential readership. I don't see why you wouldn't be able to put it both on Smashwords and Amazon (and any other site you desire).

[WFT]

Thanks for your welcome, Kazbates!

Originally Posted by SpiderMatt

I mostly meant I'm interested in seeing the book myself to see how all this economic theory is presented in a fictional framework. It sounds like you're in agreement with a large part of Austrian Economics, which is definitely something with which I can get on board. :-) This is definitely a topic worthy of much more coverage than it receives by the news. I wish you all the best with the book and I hope you keep us posted.

Have you considered http://www.smashwords.com as an ebook retailer? The site is getting pretty popular on these boards because authors keep a larger percentage of their money than they would publishing through someone like Amazon and the site provides an array of popular formats sans DRM. I know that would be a popular decision around these parts, especially if you coupled that with a low price. If you really want to get it out there, you could always release it for free under the Creative Commons License. Your book would show up on a number of sites rather quickly, I'm sure. I understand why this isn't an appealing option for many authors, though. Publishing with Amazon isn't very popular because they take like 70% (I think that's what I read). It's something ridiculous. However, publishing with Amazon does give you a larger potential readership. I don't see why you wouldn't be able to put it both on Smashwords and Amazon (and any other site you desire).

Actually, yes SpiderMatt, I will likely offer the book on smashwords.com, among other places. I'm a little concerned about their automated ebook software... I still have to look into that further. From a smattering of books I checked on their site, the formatting often looks rather ragged. I want the book to look good and to read well. I'm wondering if they'll accept an upload that I format myself, probably using Calibre (based on other recommendations I've seen here in the forums).

I'll also be offering it at my own site at a substantial discount to retail. (Amazon and others keep such a big piece of the pie, as you know.) I was also thinking about offering a direct affiliate program, to reward others willing to help distribute it. Can you tell me whether this is something that has any chance of gaining traction?

Yes, you're correct. I'm definitely heavily influenced by the Austrian school. I was (and am) a big fan of Murray Rothbard in particular. I actually met and chatted with him one time about 10 years before he died. He was a character! He was this little, fat Jewish guy with this high squeaky voice... and a mind like a library. The man was brilliant, and at the same time he was a walking caricature of himself. I thoroughly enjoyed that conversation and remember it vividly.

[SpiderMatt]

Originally Posted by WFT

I'll also be offering it at my own site at a substantial discount to retail. (Amazon and others keep such a big piece of the pie, as you know.) I was also thinking about offering a direct affiliate program, to reward others willing to help distribute it. Can you tell me whether this is something that has any chance of gaining traction?

That would be a better question to pose to the rest of the board. I don't know that many people who read ebooks (mostly because many of my friends are broke college students who can't afford eink ebook readers and prefer not to read full books on computer). I'd gladly inform people about the book but I personally would not expect much success on my part.

I'm a strong believer in the power of free. You may not think this is a financially viable option for you and I'm not one to assume one way or the other but I think more authors suffer from obscurity than free distribution of their works. This is a case commonly made by Cory Doctorow who became famous by releasing ebooks of his works for free. Today, any work that becomes popular enough is quickly offered up on pirate sites, anyway. The people on these boards are really enthusiastic about the idea of free literature, as well. It doesn't always have to do with money, though. You will probably find that people are willing to donate if they like work or just to support authors who freely distribute their work. The biggest advantage of work distributed freely is that people can immediately share it with their friends and family without legal scruples and it can be distributed to any site willing to host it.

That decision, of course, boils down to which concern is paramount for you: making money or distributing your work to the largest possible number of people. I'm not one to judge, either way. At this point you've interested me enough that I'll probably get the book no matter your decision. I just mention this because I realize distribution is a big concern for you. Otherwise, ask around here and see who else may be interested in an affiliate program. And ask other forums that may have an interest in your book (places like Mises, maybe).

Originally Posted by WFT

Yes, you're correct. I'm definitely heavily influenced by the Austrian school. I was (and am) a big fan of Murray Rothbard in particular. I actually met and chatted with him one time about 10 years before he died. He was a character! He was this little, fat Jewish guy with this high squeaky voice... and a mind like a library. The man was brilliant, and at the same time he was a walking caricature of himself. I thoroughly enjoyed that conversation and remember it vividly.

Sounds like it was a great experience. Wish I'd had the pleasure.

[WFT]

Originally Posted by SpiderMatt

I'm a strong believer in the power of free. You may not think this is a financially viable option for you and I'm not one to assume one way or the other but I think more authors suffer from obscurity than free distribution of their works. This is a case commonly made by Cory Doctorow who became famous by releasing ebooks of his works for free. Today, any work that becomes popular enough is quickly offered up on pirate sites, anyway. The people on these boards are really enthusiastic about the idea of free literature, as well. It doesn't always have to do with money, though. You will probably find that people are willing to donate if they like work or just to support authors who freely distribute their work. The biggest advantage of work distributed freely is that people can immediately share it with their friends and family without legal scruples and it can be distributed to any site willing to host it.

That decision, of course, boils down to which concern is paramount for you: making money or distributing your work to the largest possible number of people.

Your post intrigued me. So I did some research on Doctorow. He certainly makes the case you described. The thing that bothers me is that he says, "Every writer I've heard of who's tried giving away ebooks to promote paper books has come back to do it again. That's the commercial case for doing free ebooks."

Okay, that's a very interesting claim, and I'd like to check it. The problem is finding the empirical data and being able to verify it.

I did find a story on freebooksforall.com about Paulo Coelho selling only 1,000 copies of his book, The Alchemist, in 1999 before his Russian publisher dumped him. Then he supposedly put a free ebook on a website, and his sales started to take off: 10,000 copies in one year, 100,000 in two, etc.

The problem is that I can't find verification to reliably corroborate this story. So I can't tell if it's true or if it's just an urban legend. All I can find for sure is that the book is selling well on Amazon 10 years later. To make matters even more confusing, the book has supposedly already been out 20 years according to the author himself. That means it was first published in 1989. So where did 1999 come from in that tale on freebooksforall.com?

Doctorow's own novels seem to sell fairly well on Amazon, so I suppose I can take that as some level of verification.

The freebooksforall.com lists a couple of similar claims by author M.J. Rose. One such claim reads, "Haven't enough writers proved it not only helps introduce new readers to the writers but that it does the opposite of cannibalizing sales?" I checked Rose on Amazon... except for one title, sales numbers seemed pretty dismal for that author. Maybe it's the quality of the books? I don't know.

So I guess I'm saying that I'm intrigued by the claim, but I'd like to see more factual evidence. If I can find enough to convince me, I'd put my ebook out for free while trying to sell my print book.

To answer your question: yes, it's more important to me that the ideas my novel presents get out there, but I also need to earn money. While my personal story certainly isn't much different from other first-time authors, I've spent most of the last 10 months of my life living close to the edge in order to finish this book. I'd really like to earn a good living from the fruits of my labors.

Having said that, I can't deny that my primary motivation in writing the book was to get my message out there.

You seem to suggest that it's an either/or choice: either distribution or money, but not both. I draw this inference from your statement, "That decision, of course, boils down to which concern is paramount for you: making money or distributing your work to the largest possible number of people."

But Rose, Doctorow, et al seem to suggest the opposite, that free ebooks lead to more sales, not less or lost sales. Do you doubt their claim? If so, I'd be interested in knowing your reasons.

[DixieGal]

Be sure to publish it in ePub format so that we can download it, except for the Kindlers who need their own format. Look at the top of this page and find links to "forums" and "wiki." Our wiki has whatever tools you need to do this. And in the "Writer's Corner" forum, you can meet plenty of other authors with lots of experience epublishing.

Good Luck!