As this year draws to a close, it would be appropriate to take a look at the best of 2009. Since the last months of 2008, I’ve been a follower of Jim Puplava and his excellent weekly financial news talk show. The second hour of each Financial Sense Newshour features an author of a book written about economics or finance. Here’s my top 8 for the year that was. Enjoy!

1. Inflation vs. Deflation debate – 2009 was a year of endless debate for inflationists and deflationists and it seems that neither side has settled down yet. In the previous show Mr. Puplava hinted that there would be another inflation vs. deflation debate in January 2010.

2. Trend of 2009 – interview with Gerald Celente, the trends forecaster.

3. Fallen Giant: The Amazing Story of Hank Greenberg and the History of AIG – this is the story of how AIG grew to be such a large institution and what undid the company.

4. Oil 101 – the best guide to the oil industry: from the well to the pump.

5. Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy - if you like Barry’s style, you should check out his blog at www.ritholtz.com

6. Where Keynes Went Wrong: And Why World Governments Keep Creating Inflation, Bubbles, and Busts

7. “The New Market Wizards: Conversations with America’s Top Traders - an excellent interview based on the best-selling book by Jack Schwager

8. “Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse” – another great book by Thomas Woods. There are more interviews and presentations with Thomas Woods at the Mises Institute.

The full list of 2nd hour interviews is available here.

From Bloomberg:

The U.S. House is considering reinstituting the Depression-era Glass-Steagall Act, which barred bank holding companies from owning other financial companies, Majority Leader Steny Hoyer said today.  A renewal of the 1933 law “is certainly under discussion” by House members, Hoyer, a Maryland Democrat, told reporters in Washington. The Glass-Steagall law was repealed in 1999 to help pave the way for the formation of Citigroup Inc. by the $46 billion merger of Citicorp and Travelers Group Inc.

Glass-Steagall was the law that kept commercial banks (the likes of Bank of America before its purchase of Merrill) and investment banking separate. It was intended to stabilize the banking system and is served its purpose for over 60 years until 1999, when it was repealed by the Gramm-Leach-Bliley Act. The latter is what got many banks into trouble in the current financial crisis. When the Glass-Steagall Act was first instated, it was done to stabilize the banking system that had failed after the crash of 1929. It was only the Great Depression that got politicians thinking. Out of it, the SEC was born. But the formation of SEC came with a lot of new regulations, regulations that investors and traders these days consider to be vital. Mandatory reporting is one of them – before the financial reform of the 30s, companies didn’t have the obligation to report quarterly or even yearly transactions. There was no obligation to disclose insider ownership or even the number of outstanding shares, for that matter. Glass-Steagall was one of the cornerstones of these reforms and the US has to reinstate it, for the sake of its trustworthiness, but also for the sake of the banking system as a whole.

Phil Gramm, the former Republican Senator from Texas who co-wrote the act that undid Glass-Steagall:

I’ve never seen any evidence to substantiate any claim that this current financial crisis had anything to do with Gramm-Leach-Bliley. In fact, you couldn’t have had the assisted takeovers you had. More institutions would have failed.

UPDATE! Apparently, WSJ has also done an interview with Volcker. Here it is.

Der Spiegel has done an interview with Paul Volcker that sheds some light on his opinion of the economic recovery.

SPIEGEL: The US has not yet instituted any kind of reform policy. What we see is the government and the Federal Reserve pouring money into the economy. If one looks beyond that money, one sees that the economy is in fact still shrinking.

Volcker: What should I say? That’s right. We have not yet achieved self-reinforcing recovery. We are heavily dependent upon government support so far. We are on a government support system, both in the financial markets and in the economy.

Paul Volcker was the Chairman of the Federal Reserve from 1979 to 1987. During the time he took office, inflation was running at 12% annually and people were buying gold, art, real estate, anything to and everything that had real value because there was no end in sight. When Volcker took office, he raised fed funds rate to around 20%, which plunged the United States into a recession. Truth be told, raising interest rates was the only cure and had to be done sooner or later to cure rampant inflation and put the US back on track. Although Volcker was heavily criticized for his actions, he is now viewed as the only person who had a clear head and the spine to do what he did. The interview is short, but it is well worth reading.

Another great documentary from Frontline, this time about credit cards.

A letter to those savvy investors that are still holding on to their gold and gold mining shares,

I hope you’re not feeling too bad about this sharp correction gold had on Friday. It’s nothing to be afraid of – this is nothing personal. The markets are not personal and sooner or later we’ve all got to deal with it. Gold is in a long term bull and short term corrections like these should not be taken too seriously. For some who are more courageous, this will signal a buying opportunity. For people who can’t sleep well knowing their portfolio is temporarily in the red because they bought where others sold, this is a time to sit on one’s hands and do nothing.

Do you remember the bull run and the eventual bubble in tech stocks? Or this bubble? At first, the bull was also climbing a wall of worry just like gold is right now. There was widespread disbelief but eventually people got around and after a few years it all went manic. Gold is not in a mania phase yet, but it may test the launching pad (ie. $1000) level. I’m not too worried about that. In fact, I like it because I wouldn’t want to see gold going too parabolic. Assets that go up too sharply tend to snap back very fast. If you take a look at previous bull runs that ended in a bubble (like gold will in a few years’ time, but we are far from that right now), then you will see that investors who get shaken out near the launching pad will miss the big moves. You need to ask yourself whether you are in gold and silver stocks for short term gains or for the whole marathon.

If a decline like we had on Friday makes you nervous then I have to warn you – this is just the beginning. When gold reaches new highs, the volatility is going to increase significantly. $100-150 moves will become the norm.  The result will be that small, antsy, caffeine-laden day-traders will be shaken out of their positions. They will fall like leaves off a tree on an autumn day. One of the things that I’ve learned during this financial crisis thanks to the help of many great authors and newsletters is that bankers run the show by buying on the dips. In effect, this is the transfer of stock positions from weak hands to strong hands. Don’t be the weak hand. This is not some” think positive” type of bullshit. I wouldn’t be telling you to be the strong hand if I didn’t know the fundamentals behind gold’s rise (and the dollar’s subsequent demise). Being the strong hand when it comes to the dollar is bullshit because the fundamentals are very bleak. Being the strong hand when it comes to gold is the only way to win this game. You’ve got to acknowledge that bankers still run the game and there is nothing you can do about it. The only way to play this is to ignore the short term dips until the fundamentals and the technicals signal a selling point.

This year another strong fundamental driver has been added to the mix – central bankers have become net buyers of gold and there is nothing Ben can do about it. The fact is that central bankers are printing away our purchasing power. This is not a phenomenon that is unique to the United States. Nobody wants their currency to strengthen in an environment like this so the central bankers just keep depreciating their respective currencies. The only way you can protect your wealth is by buying hard assets, the best of which are gold and silver, because they will not only protect your wealth but they will also gain in value since gold and silver are in a bull market. Have been for quite some time. And there’s no end in sight just yet. So hold on to your metals and keep accumulating.

I don’t know how gold will do next week. The dollar had been setting up for a rally for quite some time now. This might hamper gold’s rise. Or not. But it really doesn’t matter. If you are convinced about gold’s superiority to all the other asset classes then you really shouldn’t worry.