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Sự lụi tàn của đồng tiền - Sự sụp đổ tiếp theo của hệ thống tiền tệ quốc tế
Hệ thống tiền tệ quốc tế đã sụp đổ ba lần trong một trăm năm qua: năm 1914, 1939 và 1971. Theo sau mỗi lần sụp đổ là giai đoạn hỗn loạn: chiến tranh, tình trạng bất ổn dân sự hoặc những thiệt hại đáng kể của nền kinh tế toàn cầu. Trong “Sự lụi tàn của đồng tiền”, James Rickards, tác giả của cuốn sách nổi tiếng “Các cuộc chiến tranh tiền tệ” đã cho thấy tại sao một sự sụp đổ khác đang nhanh chóng hình thành và những nguy cơ trong giai đoạn sắp tới. Đồng đô la Mỹ đã trở thành đồng tiền dự trữ toàn cầu kể từ khi kết thúc Chiến tranh thế giới thứ hai. Nếu đồng đô la sụp đổ, toàn bộ hệ thống tiền tệ quốc tế sẽ sụp đổ theo... Nhưng chỉ có những quốc gia hoặc cá nhân chuẩn bị đầy đủ mới có thể vượt qua cuộc khủng hoảng sắp tới.
490 pages, Unknown Binding
First published March 5, 2015
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September 29, 2014
James Rickards begins this book with an interesting account of how systems for detecting insider trading in futures markets can be integrated with conventional counter-terrorism techniques. He takes the discussion further by outlining financial warfare scenarios in which hostile nations use malicious interventions in markets to damage an adversary. This part of the book works well because it rests on what the author knows. He is a genuine expert in these matters.
Most of the book, however, is an inexpertly argued case for austerity economics. Rickards appears morally offended by inflation, government spending, and taxation. He feigns mastery of a values-free centre between centre-left and libertarian proposals for public policy but in reality he is ideologically committed to pushing the burden of bankers' mistakes onto households. He does not recognize that the large increases in public debt-to-GDP ratios since the Global Financial Crisis are the result of governments taking responsibility for massive amounts of PRIVATE debt. He believes wrongly that today's public debts are the result of excessive government spending.
Rickards favours steep cuts to the following: wages, government spending, regulatory "burdens", and taxes.
The book descends into farce when Rickards writes an extended paean to a senior IMF official's scheme for a global currency coupled with globally binding limits on government spending and taxation. Rickards favours a technocratic approach to government in which the people and their elected representatives have as little say as possible in how their economy is organized. He fetishizes markets and disregards questions of power inequalities. He is oblivious to his own moral and ideological preferences.
For an informed account of the Global Financial Crisis and how to deal with it, I recommend Mark Blyth's Austerity: The History of a Dangerous Idea and Nouriel Roubini's Crisis Economics. These authors do not pretend that economics is values-free
Most of the book, however, is an inexpertly argued case for austerity economics. Rickards appears morally offended by inflation, government spending, and taxation. He feigns mastery of a values-free centre between centre-left and libertarian proposals for public policy but in reality he is ideologically committed to pushing the burden of bankers' mistakes onto households. He does not recognize that the large increases in public debt-to-GDP ratios since the Global Financial Crisis are the result of governments taking responsibility for massive amounts of PRIVATE debt. He believes wrongly that today's public debts are the result of excessive government spending.
Rickards favours steep cuts to the following: wages, government spending, regulatory "burdens", and taxes.
The book descends into farce when Rickards writes an extended paean to a senior IMF official's scheme for a global currency coupled with globally binding limits on government spending and taxation. Rickards favours a technocratic approach to government in which the people and their elected representatives have as little say as possible in how their economy is organized. He fetishizes markets and disregards questions of power inequalities. He is oblivious to his own moral and ideological preferences.
For an informed account of the Global Financial Crisis and how to deal with it, I recommend Mark Blyth's Austerity: The History of a Dangerous Idea and Nouriel Roubini's Crisis Economics. These authors do not pretend that economics is values-free
December 2, 2014
We're all screwed.
Buy some gold and run for the hills.
Buy some gold and run for the hills.
July 10, 2014
Good read with some eye-opening sections. The things that stood out the most: terrorists can/will short stocks when they know a stock may plummet from a terror attack(happened on 9/11), China has many ghost cities, and lastly China may be in cahoots with the US to keep the dollar bubble going as it looks to be mutually beneficial for both parties.
Change is coming. One way or another our current global monetary system is going to change.
The conclusion section is a must read, starting on page 292.
The three paths:
1) World money, the SDR
2) Gold standard
3) Social disorder
The seven signs:
1) price of gold ($2,500 inflation, $800 deflation)
2) gold's continued acquisition by central banks
3) IMF governance reforms (look for SDR-denominated bonds by corporations)
4) failure of regulatory reform (bank lobbyists defeat of efforts by U.S. regulators)
5) System crashes (large stock market swings)
6) the end of QE and Abenomics
7) Chinese collapse
Five investments:
1) Gold (10-20%)
2) Land (20%)
3) Fine art (10%)
4) Alternative funds - hedge and private equity (20%) (include long-short equity, global macro, and hard-asset strategies that target natural resources, precious metals, water, or energy)
5) Cash (30%) (Singapore dollar, Canadian dollar, US dollar, and Euro)
Change is coming. One way or another our current global monetary system is going to change.
The conclusion section is a must read, starting on page 292.
The three paths:
1) World money, the SDR
2) Gold standard
3) Social disorder
The seven signs:
1) price of gold ($2,500 inflation, $800 deflation)
2) gold's continued acquisition by central banks
3) IMF governance reforms (look for SDR-denominated bonds by corporations)
4) failure of regulatory reform (bank lobbyists defeat of efforts by U.S. regulators)
5) System crashes (large stock market swings)
6) the end of QE and Abenomics
7) Chinese collapse
Five investments:
1) Gold (10-20%)
2) Land (20%)
3) Fine art (10%)
4) Alternative funds - hedge and private equity (20%) (include long-short equity, global macro, and hard-asset strategies that target natural resources, precious metals, water, or energy)
5) Cash (30%) (Singapore dollar, Canadian dollar, US dollar, and Euro)
Want to read
January 23, 2015Some time ago ago Russia and China struck a 400 billion dollar agreement on gas; a sign of the times, an Asian economic block a-building? It seems Russia wants to prove to the US it can find other business partners; others than Europe.
Russia and China, says Rickards, on the other side don’t have a debt/bonds market sufficiently big,…so the dollar is still a reserve currency. But things are changing (namely the Petrodollars status).
Rickards predicts a “liquidity crisis” to happen; and the IMF to bail it out with SDRs.
Inflation is coming due to the colossal debt level of the USA, not the 17 trillion so much divulged, but 100’s of trillions due to Medicaid, Medicare …and all guarantees.
----
Maybe Bitcoin, will save us; but it has bad reputation (drug money, some said at its onset) and now under threat due to some “money” disappearing from its Japan website, despite all its recent valuation.
And yet why so many bitcoins being held by the FBI?
-hmmm
Russia and China, says Rickards, on the other side don’t have a debt/bonds market sufficiently big,…so the dollar is still a reserve currency. But things are changing (namely the Petrodollars status).
Rickards predicts a “liquidity crisis” to happen; and the IMF to bail it out with SDRs.
Inflation is coming due to the colossal debt level of the USA, not the 17 trillion so much divulged, but 100’s of trillions due to Medicaid, Medicare …and all guarantees.
----
Maybe Bitcoin, will save us; but it has bad reputation (drug money, some said at its onset) and now under threat due to some “money” disappearing from its Japan website, despite all its recent valuation.
And yet why so many bitcoins being held by the FBI?
-hmmm
July 31, 2014
Did Al Qaeda Cash in on the 9/11 Attacks?
by Mark H. Gaffney
So says James Rickards, author of the hot bestseller, The Death of Money, The Coming Collapse of the International Monetary System, which presents a persuasive argument that citizens of planet earth face an imminent global financial meltdown, one that will make 2008 look like a warm up.
Rickards’ book includes insightful chapters about Germany and the Eurozone, the BRICS, China, the IMF, as well as a clear analysis about how the Federal Reserve has painted itself into a fiscal corner from which there is no exit and now faces insolvency.
Unfortunately, to get to all of this valuable material the reader must first wade through hip-deep hogwash in chapter one, in which the author reviews the evidence for insider trading in the days before the 9/11 attacks.
In chapter one Rickards’ otherwise clear vision fails him.
The author is absolutely correct that pre-9/11 insider trading did occur. Rickards also correctly notes that “every transaction has two parties,” meaning that every put and call option leaves a paper trail. But Rickards insults our intelligence when he tells us that associates of Osama bin Laden were responsible for the insider trading.
Rickards would have us believe, for example, that the terrorists were behind the 600% spike in call options for the military contractor Raytheon, whose stock surged 37% in the weeks after 9/11. Other big winners were L-3 Communications, Northrop Grumman, and Allied Techsystems.
According to Paul Zarembka, professor of econometrics at SUNY Buffalo, the put/call options were exercised, meaning that whoever purchased them later collected the profits, blood money. But is it believable that the very same terrorists who sought to destroy America got away with profiting from the subsequent vast expansion of the US war machine?
Catching those responsible certainly was the intent of the Securities and Exchange Commission, which led the probe into allegations of insider trading in the weeks after 9/11. At the time, SEC chairman Harvey Pitt told the press “We will do everything in our power to track those [guilty] people down and bring them to justice.” Everyone took it for granted that the paper trail would lead to al Qaeda.
Yet, weeks later, the SEC quietly and inexplicably tabled its investigation. Why? Instead of issuing indictments, the SEC took the unprecedented step of deputizing everyone associated with its probe. This totaled hundreds, possibly thousands, of people. Why did the SEC do this? The answer was transparently obvious to former LAPD narcotics investigator Mike Ruppert, who pointed out that the SEC deputized its investigators to effectively gag them, no doubt, to prevent leakage of its actual findings. And what were those findings? Well, probably the inconvenient truth that the paper trail led not to bin Laden but back to Wall Street.
As we know, there was leakage despite the SEC’s best efforts to keep a lid on things. The Independent (UK) reported that “to the embarrassment of investigators, it has emerged that the firm used to buy the put options on United Airlines was headed until 1998 by Alvin “Buzzy” Krongard, now executive director of the CIA.” George Tenet had personally recruited Krongard, probably to serve as his liaison with Wall Street.
The firm in question was America’s oldest investment bank, A.B. Brown, which merged with Bankers Trust in 1997. In 1999, when B.T. - Alex Brown pled guilty to criminal conspiracy charges, after it was revealed that top-level executives had created a $20 million slush fund out of unclaimed funds, B.T. - Alex Brown was on the verge of being closed down when Deutsche Bank scooped it up.
Krongard’s former associate at Alex Brown, Mayo Shattuck III, who helped engineer the merger with Bankers Trust, went on to assume Krongard’s former duties as private banker to the firm’s wealthiest clients, personally arranging confidential transactions and transfers. According to the New York Times, in January 2001, Shattuck was named “co-head of investment banking….overseeing Deutsche Bank’s 400 brokers who cater to wealthy clients.”
Shattuck’s sudden resignation on September 12, 2001 must therefor be viewed as highly suspicious. Shattuck retired without a word of explanation even though he reportedly had three years remaining on his contract.
All of the above is conspicuously absent from Rickards’ discussion about insider trading. One may draw his/her own conclusions -- I have drawn mine. Even as we teeter on the brink of a financial meltdown of historic proportions, the insider-writer who would explain all of this cannot bring himself to acknowledge the true extent of Wall Street corruption and criminality, especially regarding 9/11, the fulcrum event that produced the world as we know it.
Mark is the author of Black 9/11 (2012). He may be reached for comment at markhgaffney@earthlink.net
by Mark H. Gaffney
So says James Rickards, author of the hot bestseller, The Death of Money, The Coming Collapse of the International Monetary System, which presents a persuasive argument that citizens of planet earth face an imminent global financial meltdown, one that will make 2008 look like a warm up.
Rickards’ book includes insightful chapters about Germany and the Eurozone, the BRICS, China, the IMF, as well as a clear analysis about how the Federal Reserve has painted itself into a fiscal corner from which there is no exit and now faces insolvency.
Unfortunately, to get to all of this valuable material the reader must first wade through hip-deep hogwash in chapter one, in which the author reviews the evidence for insider trading in the days before the 9/11 attacks.
In chapter one Rickards’ otherwise clear vision fails him.
The author is absolutely correct that pre-9/11 insider trading did occur. Rickards also correctly notes that “every transaction has two parties,” meaning that every put and call option leaves a paper trail. But Rickards insults our intelligence when he tells us that associates of Osama bin Laden were responsible for the insider trading.
Rickards would have us believe, for example, that the terrorists were behind the 600% spike in call options for the military contractor Raytheon, whose stock surged 37% in the weeks after 9/11. Other big winners were L-3 Communications, Northrop Grumman, and Allied Techsystems.
According to Paul Zarembka, professor of econometrics at SUNY Buffalo, the put/call options were exercised, meaning that whoever purchased them later collected the profits, blood money. But is it believable that the very same terrorists who sought to destroy America got away with profiting from the subsequent vast expansion of the US war machine?
Catching those responsible certainly was the intent of the Securities and Exchange Commission, which led the probe into allegations of insider trading in the weeks after 9/11. At the time, SEC chairman Harvey Pitt told the press “We will do everything in our power to track those [guilty] people down and bring them to justice.” Everyone took it for granted that the paper trail would lead to al Qaeda.
Yet, weeks later, the SEC quietly and inexplicably tabled its investigation. Why? Instead of issuing indictments, the SEC took the unprecedented step of deputizing everyone associated with its probe. This totaled hundreds, possibly thousands, of people. Why did the SEC do this? The answer was transparently obvious to former LAPD narcotics investigator Mike Ruppert, who pointed out that the SEC deputized its investigators to effectively gag them, no doubt, to prevent leakage of its actual findings. And what were those findings? Well, probably the inconvenient truth that the paper trail led not to bin Laden but back to Wall Street.
As we know, there was leakage despite the SEC’s best efforts to keep a lid on things. The Independent (UK) reported that “to the embarrassment of investigators, it has emerged that the firm used to buy the put options on United Airlines was headed until 1998 by Alvin “Buzzy” Krongard, now executive director of the CIA.” George Tenet had personally recruited Krongard, probably to serve as his liaison with Wall Street.
The firm in question was America’s oldest investment bank, A.B. Brown, which merged with Bankers Trust in 1997. In 1999, when B.T. - Alex Brown pled guilty to criminal conspiracy charges, after it was revealed that top-level executives had created a $20 million slush fund out of unclaimed funds, B.T. - Alex Brown was on the verge of being closed down when Deutsche Bank scooped it up.
Krongard’s former associate at Alex Brown, Mayo Shattuck III, who helped engineer the merger with Bankers Trust, went on to assume Krongard’s former duties as private banker to the firm’s wealthiest clients, personally arranging confidential transactions and transfers. According to the New York Times, in January 2001, Shattuck was named “co-head of investment banking….overseeing Deutsche Bank’s 400 brokers who cater to wealthy clients.”
Shattuck’s sudden resignation on September 12, 2001 must therefor be viewed as highly suspicious. Shattuck retired without a word of explanation even though he reportedly had three years remaining on his contract.
All of the above is conspicuously absent from Rickards’ discussion about insider trading. One may draw his/her own conclusions -- I have drawn mine. Even as we teeter on the brink of a financial meltdown of historic proportions, the insider-writer who would explain all of this cannot bring himself to acknowledge the true extent of Wall Street corruption and criminality, especially regarding 9/11, the fulcrum event that produced the world as we know it.
Mark is the author of Black 9/11 (2012). He may be reached for comment at markhgaffney@earthlink.net
May 5, 2014
Absolutely fascinating! Stretched my brain in a 1,000 different ways given that I don't normally read about the economy (particularly in this much detail) but it provided tremendous insight into the state of the global economy and what current political, economic, and private interests are at play.
May 26, 2021
Money as we know it is about to change. It helps to have a heads up on the ways in which our current understanding of money will meet its demise, as well as strategies on how to deal with this major shift as it happens.
"The Death of Money" by Jim Rickards is an intriguing exploration into the gradual destruction of the world money system caused by major world players such as political factions and central banks. With the increase in the speed of monetary transactions coupled with the printing of more money supply by governments around the world, the entire system is bound to come to a sudden crash and will force people to make do with what they have to prevent their lives getting ruined as a result of the instability.
Mr. Rickards reveals how the money system is being disintegrated both secretly and in plain sight. Historical events that helped shaped the world money system in the past are being repeated, only this time the idea of money is viciously being changed to something that is in favor of banks and governments rather than a balance between those entities and the general public. Ever since gold was disassociated with money, the system had undergone changes that, if allowed to continue further, will make the purpose of money more malicious and keep the world debt increasing to the point where debts cannot be repaid.
Therefore, it is important that people are aware of the changes taking place and protect themselves accordingly. The author provides several solutions that the world powers could take into action to restore the balance, and also gives his suggestions to the readers on the precautionary measures they can take to protect themselves from losses to their wealth in case of a money system disaster. I like how the author attempts to give his own feedback to both sides (world powers and people); it shows that he is willing to analyze with as little bias as possible.
The book is lengthy and requires a bit of focus to make sense of the author's ultimate message towards the end. But its contents are special in that the analysis will rarely be found in other works that deal with economics. The subject matter is quite bold and non-traditional in nature, and will surely open the eyes of readers who are unaware of the world money system.
"The Death of Money" is a fascinating read that got my attention especially since most of the author's findings are happening now in the economy today. Perhaps the other predictions will happen sooner or later. In any case I, and others who read this book, will be more aware of the changes around us and will prepare ourselves accordingly to secure our wealth.
"The Death of Money" by Jim Rickards is an intriguing exploration into the gradual destruction of the world money system caused by major world players such as political factions and central banks. With the increase in the speed of monetary transactions coupled with the printing of more money supply by governments around the world, the entire system is bound to come to a sudden crash and will force people to make do with what they have to prevent their lives getting ruined as a result of the instability.
Mr. Rickards reveals how the money system is being disintegrated both secretly and in plain sight. Historical events that helped shaped the world money system in the past are being repeated, only this time the idea of money is viciously being changed to something that is in favor of banks and governments rather than a balance between those entities and the general public. Ever since gold was disassociated with money, the system had undergone changes that, if allowed to continue further, will make the purpose of money more malicious and keep the world debt increasing to the point where debts cannot be repaid.
Therefore, it is important that people are aware of the changes taking place and protect themselves accordingly. The author provides several solutions that the world powers could take into action to restore the balance, and also gives his suggestions to the readers on the precautionary measures they can take to protect themselves from losses to their wealth in case of a money system disaster. I like how the author attempts to give his own feedback to both sides (world powers and people); it shows that he is willing to analyze with as little bias as possible.
The book is lengthy and requires a bit of focus to make sense of the author's ultimate message towards the end. But its contents are special in that the analysis will rarely be found in other works that deal with economics. The subject matter is quite bold and non-traditional in nature, and will surely open the eyes of readers who are unaware of the world money system.
"The Death of Money" is a fascinating read that got my attention especially since most of the author's findings are happening now in the economy today. Perhaps the other predictions will happen sooner or later. In any case I, and others who read this book, will be more aware of the changes around us and will prepare ourselves accordingly to secure our wealth.
June 12, 2014
Rickard's incredible breadth of experience and depth of understanding of the intricacies of the world's financial systems is again on display in incredible fashion in this follow up to Currency Wars. I've read Currency Wars three times now and most of this book twice and am still amazed at how much ground is covered in each book. Although The Death of Money does offer some investment recommendations at the end of this book (something I felt was lacking in CW) I feel like the real value to what's presented in both of his books is the understanding of what is happening in the world's economies and what factors are playing into the significant risks facing each one. This book continues the discussion from Currency Wars of the complexity models that the author advocates should be applied to economies and financial markets and provides some fascinating insight into the growing risks of financial warfare due to the increasing complexities of markets, banking systems and governments.
In a world saturated with noise and entertainment based political commentary in place of news and analysis, I found this book to be a refreshing, balanced, no nonsense evaluation of the state of the world. The picture it paints isn't pretty but I at least feel like I can look at the world through more informed eyes and maybe make investment and career decisions based on a better understanding of how things really are.
In a world saturated with noise and entertainment based political commentary in place of news and analysis, I found this book to be a refreshing, balanced, no nonsense evaluation of the state of the world. The picture it paints isn't pretty but I at least feel like I can look at the world through more informed eyes and maybe make investment and career decisions based on a better understanding of how things really are.
May 18, 2015
http://www.riosmauricio.com/wp-conten...
The announcement by China in late 2014 or early 2015 that it has acquired over 4,000 tonnes of gold will be a landmark in this larger trend and a harbinger of inflation. A portfolio of 20% gold, 20% land, 10% fine art, 20% alternative funds, and 30% cash should offer an optimal combination of wealth preservation under conditions of inflation, deflation, and social unrest, while providing high risk-adjusted returns and reasonable liquidity. This portfolio must be actively managed no portfolio intended to achieve these goals works for the "buy-and-hold" investor. We are not helpless; we can begin now to prepare to weather the inevitable outcome of the hubris of central banks.
Students have a high propensity to spend, whether on tuition itself or on books, apartments, furniture, and beer. A record 21 million young adults between the ages 18- 31 are living with their parents. Many of these stay at homes because of student loans are recent graduates who cannot pay rent or afford down payments on homes because of student loans. For now, student loan cash flows and spending have helped deflation threat, but the student loan bubble will burst in the years ahead, making the debt and deficit crises worse.
The announcement by China in late 2014 or early 2015 that it has acquired over 4,000 tonnes of gold will be a landmark in this larger trend and a harbinger of inflation. A portfolio of 20% gold, 20% land, 10% fine art, 20% alternative funds, and 30% cash should offer an optimal combination of wealth preservation under conditions of inflation, deflation, and social unrest, while providing high risk-adjusted returns and reasonable liquidity. This portfolio must be actively managed no portfolio intended to achieve these goals works for the "buy-and-hold" investor. We are not helpless; we can begin now to prepare to weather the inevitable outcome of the hubris of central banks.
Students have a high propensity to spend, whether on tuition itself or on books, apartments, furniture, and beer. A record 21 million young adults between the ages 18- 31 are living with their parents. Many of these stay at homes because of student loans are recent graduates who cannot pay rent or afford down payments on homes because of student loans. For now, student loan cash flows and spending have helped deflation threat, but the student loan bubble will burst in the years ahead, making the debt and deficit crises worse.
April 22, 2014
The book is about the decline of the dollar era, and what might come after it if the dollar fails as the reserve currency of choice. Rickard’s believes “The Fed’s insolvency is looming.” The author claims the reason for this is the US Federal Reserve has mismanaged the financial crisis and recovery. Rickard thinks they should have let the market correct itself without intervention. The author discusses inflation and deflation in detail as well as the role of banks, central banks and the IMF. I found his history of the global financial system interesting. He covered the financial history of a few countries in-depth, they are Japan, Germany, Russia, China, Brazil, Britain and the U.S. as well as the formation of the European Union. He also covers in detail gold and the gold standard; he lists the countries that have built up gold reserves and why they have done it. The author says the Euro will be the surviving currency and recommends the purchase of gold and land to survive the fall of the dollar. Richards failed to discuss oil, energy and the reckless and fraudulent behavior of the financial industry except in a brief comment. It is an interesting book, a bit gloomy but a good review of the global financial system. I will understand a bit more when listening to the financial news. I read this as an audio book downloaded from Audible. Sean Pratt did an excellent job narrating the book. I think it would have been better if I had read the book instead of listen. It would have been easier to go back and re-read a few items.
November 12, 2017
I had just started reading a book on this topic but had to give up, something I almost never do, because it was discussing economic theory at a clinical graduate level that made it difficult to follow; and I do have an MBA. So deciding to switch to the Death of Money, I was concerned about at what level this was written.
This was not the case. In fact, this author really made this subject easy to understand and also made it interesting. He included many examples and filled in with plenty of little-known historical facts. By reading The Death of Money you will get an in depth understanding of Money as well as international finance. Try it, you might like it and learn something...
This was not the case. In fact, this author really made this subject easy to understand and also made it interesting. He included many examples and filled in with plenty of little-known historical facts. By reading The Death of Money you will get an in depth understanding of Money as well as international finance. Try it, you might like it and learn something...
March 9, 2019
I used both the online print version and audio book version of this book simultaneously. With my very limited understanding of economics, I still found this book difficult to follow at times. The book's title attracted me. Though chilling in it's predictions throughout, this book is very educational as it sheds light on various global financial scenarios and feedback loops that have occurred, and those that can occur, as well as how they can occur, and what we can do to best position ourselves in each scenario, instead of sticking our heads in the sand.
December 18, 2021
This took me a very long time to finish reading. Very interesting, but also very dense, and often confusing. I feel like I learned a lot, but also like a lot of information just went right over my head. If you haven't studied much economics, you might want to read something else first (kinda wish I'd done that myself).
January 24, 2021
Looks like just what is happening today in the world economy. Scary but accurate
July 19, 2017
Entertaining read and very informative for those who aren't familiar with the role of the IMF in international monetary policy.
May 29, 2021
Good reading, and critical thinking.
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The most important clause in the written dollar contract appears on the front at the top of each bill. It is the phrase “Federal Reserve Note.” A note is an obligation, a form of debt. Indeed, this is how the Fed reports money issued on its balance sheet. Balance sheets show assets on the left-hand side, liabilities on the right-hand side, and capital, which is assets minus liabilities, at the bottom. Notes issued by the Fed are reported on the right-hand side of the balance sheet, as a liability, exactly where one would place debt.
Fed notes are an unusual form of debt because they bear no interest and have no maturity. Another way to describe a dollar, using the contract theory, is that it is a perpetual, non-interest-bearing note issued by the Fed. Any borrower will attest that perpetual, non-interest-bearing debt is the best kind of debt because one never pays it back, and it costs nothing in the meantime. Still, it is a debt.
So the dollar is money, money is value, value is trust, trust is a contract, and the contract is debt. By application of the transitive law of arithmetic, the dollar is debt owed by the Fed to the people in contractual form. This view may be called the contract theory of money, or contractism . As applied to the dollar, one way to understand the theory is to substitute the word debt every time one sees the word money . Then the world looks like a different place; it is a world in debt.
This approach to money through the lens of contract is one of many monetary theories. The most influential of these is the quantity theory of money, or monetarism, advocated in the twentieth century by Irving Fisher and Milton Friedman. Monetarism is one of the Fed’s chosen guides to money creation, although the original formulation advocated by Friedman is no longer in vogue.”
------------------------------------
---------
The most important clause in the written dollar contract appears on the front at the top of each bill. It is the phrase “Federal Reserve Note.” A note is an obligation, a form of debt. Indeed, this is how the Fed reports money issued on its balance sheet. Balance sheets show assets on the left-hand side, liabilities on the right-hand side, and capital, which is assets minus liabilities, at the bottom. Notes issued by the Fed are reported on the right-hand side of the balance sheet, as a liability, exactly where one would place debt.
Fed notes are an unusual form of debt because they bear no interest and have no maturity. Another way to describe a dollar, using the contract theory, is that it is a perpetual, non-interest-bearing note issued by the Fed. Any borrower will attest that perpetual, non-interest-bearing debt is the best kind of debt because one never pays it back, and it costs nothing in the meantime. Still, it is a debt.
So the dollar is money, money is value, value is trust, trust is a contract, and the contract is debt. By application of the transitive law of arithmetic, the dollar is debt owed by the Fed to the people in contractual form. This view may be called the contract theory of money, or contractism . As applied to the dollar, one way to understand the theory is to substitute the word debt every time one sees the word money . Then the world looks like a different place; it is a world in debt.
This approach to money through the lens of contract is one of many monetary theories. The most influential of these is the quantity theory of money, or monetarism, advocated in the twentieth century by Irving Fisher and Milton Friedman. Monetarism is one of the Fed’s chosen guides to money creation, although the original formulation advocated by Friedman is no longer in vogue.”
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May 13, 2021
I picked up the book after reading a newspaper review which wrote good and exciting things about it. The book, however, turned out to be just an average read.
One of the areas where author's arguments fall flat is the derivative instruments which banks deal in. He repeatedly suggests banning all derivatives outrightly as a cure for financial and liquidity woes. It completely lacks a nuanced take on the issue expected from an expert and sounds more like a rhetorical diatribe painting all the bankers with the same brush. This may surely appeal to an average person or an outsider to the industry. But, derivatives all not all that bad. These are innovative contracts designed to shift and manage financial risks across parties and across time. It lends depth to an inherently complex industry. What's bad is the reckless execution of these contracts with a motive of profit while underestimating or underplaying the associated risks. And that is something which can be effectively regulated - just what the Basel committee suggested after the 2008 GFC and subsequently implemented by the central bankers of major economies.
So the point is that I expected better of the book. There are no doubt some brilliant sections about gold and currencies (where the author's expertise lies) but, somehow it just doesn't gel together in the end. The warnings are apocalyptic but the very complex nature of the global financial system means that none of those may come to pass or at least in the manner author suggested. To be fair, the author himself admits the difficulty in predicting anything in complex global financial world. But then the title of the book certainly doesn't leave any room for such uncertainties.
The author doesn't have a balanced view on issues like national debt, inflation, monetary policy etc. He has a view and he runs with it. For a broad, deep and effective analysis of such issues, it ought to be more nuanced and balanced.
One of the areas where author's arguments fall flat is the derivative instruments which banks deal in. He repeatedly suggests banning all derivatives outrightly as a cure for financial and liquidity woes. It completely lacks a nuanced take on the issue expected from an expert and sounds more like a rhetorical diatribe painting all the bankers with the same brush. This may surely appeal to an average person or an outsider to the industry. But, derivatives all not all that bad. These are innovative contracts designed to shift and manage financial risks across parties and across time. It lends depth to an inherently complex industry. What's bad is the reckless execution of these contracts with a motive of profit while underestimating or underplaying the associated risks. And that is something which can be effectively regulated - just what the Basel committee suggested after the 2008 GFC and subsequently implemented by the central bankers of major economies.
So the point is that I expected better of the book. There are no doubt some brilliant sections about gold and currencies (where the author's expertise lies) but, somehow it just doesn't gel together in the end. The warnings are apocalyptic but the very complex nature of the global financial system means that none of those may come to pass or at least in the manner author suggested. To be fair, the author himself admits the difficulty in predicting anything in complex global financial world. But then the title of the book certainly doesn't leave any room for such uncertainties.
The author doesn't have a balanced view on issues like national debt, inflation, monetary policy etc. He has a view and he runs with it. For a broad, deep and effective analysis of such issues, it ought to be more nuanced and balanced.
August 2, 2021
“Seit der Abkehr vom Goldstandard wurde der Dollar als Reservewährung zunehmend unsicherer und instabiler. Wir sollten uns darauf vorbereiten, dass er bald zusammenbricht und es zu einem großen Crash kommt. Vorsorglich empfehlen sich daher Bargeld, Investitionen in Land, Kunst, alternative Fonds – und Gold. Gerade Letzteres könnte künftig wieder große Bedeutung erlangen.” (Blinkist, 2021)
#blinkist
#blinkist
March 31, 2023
I feel like I wouldn’t have walked out away from an economics major in college if I had Jim Rickards as a professor. I’ve read 3 books of his now and they do tend to overlap in thought (there WILL be at least one chapter on gold) but I always learn something new in the simplest possible language. This book taught me what the IMF actually does.
November 11, 2017
Interesting analysis of the problems with the current International Monetary system and its imminent demise.
May 28, 2023
Cuốn sách thứ 2 nghe từ fonos. Từ khi nghe fonos, tốc độ "đọc" nhanh hẳn, kkk
November 4, 2019
In this where Ian Fleming-meets-Michael Lewis-meets-John Le Carre, James Rickards knocked the very stuffing out of yours truly and left me reeling with incredulity!Brash, egregious and outspoken, "The Death of Money", is a roller coaster experience which at times is so surreal that you may be forgiven for thinking that Rickards is trying to pull the carpet from underneath you!
Just 3 days before the infamous 9/11 disaster there was an unusual element of trading in the stocks of both American and United Airlines. The peculiarity of such a trading was that put options were being traded betting on the stocks of the two concerned airlines going down. This frenzy of trading went unnoticed or was ignored as an aberration. Immediately after the attacks, the stocks of both the airlines plummeted more than 40%. Were the terrorists or someone within their network who was in the know of the ensuing insidious attacks indulging in insider trading to obtain pecuniary benefits in addition to wreaking a reign of terror? Although the investigating commission explored this angle only to discard it in their final report, Rickards firmly believes that this was also a financial warfare strategy adopted by the extremists to bring the dollar down to its knees.
Rickards, in this extremely fast paced and thriller like book, goes on to posit a few other theories and potential triggers which might signal the end of the American Dollar's prestigious status as the world's reserve currency. Some of the main contenders for the displacement of the dollar are:
The issuance of SDR's by the International Monetary Fund amongst his members. The burgeoning rise of SDRs especially in times such as the financial panic that gripped the world beginning 2008 might soon be the preferred reserve currency. The fact that the dollar is diminishing in importance as one of the components of the basket of currencies making up the SDR bears ample testimony to this fact;
Rickards also highlights the frantic purchase of gold by many nations in general and China in particular as a potential signal for the return of the gold standard which was abolished by Richard Nixon in 1971. The "stealth" procurement of gold reserves by China in Rickards estimate gives the nation gold reserves of a whopping 4,000 tonnes!
The BRICS, BELLS and other alphabet souping of emerging nations are working closely and furiously to end the hegemony of the dollar. The establishment of a bank within the BRICS with a view to facilitate inter partner trading and also the trade engaged in by China with Latin America entirely being invoiced in currencies such as the Yuan and Peso to the exclusion of the dollar does not bode well for the American currency;
Pinning its hopes on inflation and thereby printing trillions of dollars, the Federal Reserve is turning a blind eye to the potential deflationary conditions that might come to haunt it, according to Rickards. The unfortunate experience of Japan is a case in point.
The doomsday scenarios laid out by James Rickards in this stupendous book might not come to pass after all. However the underlying signs and signals are inevitable and absolutely impossible to ignore. All these canaries in the mine and the elephants in the room however are being viewed dismissively by both mavens of economics and policy makers alike. In the general interests of a well functioning and interconnected global economy, it is imperative that initiatives be taken sooner rather than later.
Just 3 days before the infamous 9/11 disaster there was an unusual element of trading in the stocks of both American and United Airlines. The peculiarity of such a trading was that put options were being traded betting on the stocks of the two concerned airlines going down. This frenzy of trading went unnoticed or was ignored as an aberration. Immediately after the attacks, the stocks of both the airlines plummeted more than 40%. Were the terrorists or someone within their network who was in the know of the ensuing insidious attacks indulging in insider trading to obtain pecuniary benefits in addition to wreaking a reign of terror? Although the investigating commission explored this angle only to discard it in their final report, Rickards firmly believes that this was also a financial warfare strategy adopted by the extremists to bring the dollar down to its knees.
Rickards, in this extremely fast paced and thriller like book, goes on to posit a few other theories and potential triggers which might signal the end of the American Dollar's prestigious status as the world's reserve currency. Some of the main contenders for the displacement of the dollar are:
The issuance of SDR's by the International Monetary Fund amongst his members. The burgeoning rise of SDRs especially in times such as the financial panic that gripped the world beginning 2008 might soon be the preferred reserve currency. The fact that the dollar is diminishing in importance as one of the components of the basket of currencies making up the SDR bears ample testimony to this fact;
Rickards also highlights the frantic purchase of gold by many nations in general and China in particular as a potential signal for the return of the gold standard which was abolished by Richard Nixon in 1971. The "stealth" procurement of gold reserves by China in Rickards estimate gives the nation gold reserves of a whopping 4,000 tonnes!
The BRICS, BELLS and other alphabet souping of emerging nations are working closely and furiously to end the hegemony of the dollar. The establishment of a bank within the BRICS with a view to facilitate inter partner trading and also the trade engaged in by China with Latin America entirely being invoiced in currencies such as the Yuan and Peso to the exclusion of the dollar does not bode well for the American currency;
Pinning its hopes on inflation and thereby printing trillions of dollars, the Federal Reserve is turning a blind eye to the potential deflationary conditions that might come to haunt it, according to Rickards. The unfortunate experience of Japan is a case in point.
The doomsday scenarios laid out by James Rickards in this stupendous book might not come to pass after all. However the underlying signs and signals are inevitable and absolutely impossible to ignore. All these canaries in the mine and the elephants in the room however are being viewed dismissively by both mavens of economics and policy makers alike. In the general interests of a well functioning and interconnected global economy, it is imperative that initiatives be taken sooner rather than later.
February 17, 2019
There are few authors from whom I learn more than James Rickards. Both this book and his first offering (Money Wars) are chock full of information on the global economy and how different countries interact with one another. His books are so information-dense that they often take me a while to get through them (I have to step back and digest the information every so often), but I feel like a better informed citizen once I'm done reading.
The reason I'm knocking off a star: Rickards has the thesis that many economists are predicting future trends incorrectly, because they are looking at too narrow a set of sample data. They need to look at trends not over the last 50 years, but over the last hundreds of years, to properly understand the current state of the economy. He also mentions chaos theory and how one little thing can have drastic, unforeseen consequences that transform the system as a whole.
Then he talks about how the death of the dollar is certain and imminent. He also talks about how there are exactly three courses that the world can take: switch to the gold standard, switch to a global currency, or descend into chaos.
Rickards talks so much about how chaos and uncertainty, and then declares his predictions about the future with a certainty that is completely at odds with his argument that the economy is an inherently complex system full of uncertainty. He strikes me as entirely too cocky and sure of himself with regards to his own predictions. I'm sure saying "The death of the dollar is upon us!" creates a more flashy tagline than "The economy is full of uncertainty;" however, if he wants to get a reputation as intelligent and worth listening to, I really think he should dial back his boastful certainty.
Overall, I learned a ton from this book, and I'm glad I read it.
The reason I'm knocking off a star: Rickards has the thesis that many economists are predicting future trends incorrectly, because they are looking at too narrow a set of sample data. They need to look at trends not over the last 50 years, but over the last hundreds of years, to properly understand the current state of the economy. He also mentions chaos theory and how one little thing can have drastic, unforeseen consequences that transform the system as a whole.
Then he talks about how the death of the dollar is certain and imminent. He also talks about how there are exactly three courses that the world can take: switch to the gold standard, switch to a global currency, or descend into chaos.
Rickards talks so much about how chaos and uncertainty, and then declares his predictions about the future with a certainty that is completely at odds with his argument that the economy is an inherently complex system full of uncertainty. He strikes me as entirely too cocky and sure of himself with regards to his own predictions. I'm sure saying "The death of the dollar is upon us!" creates a more flashy tagline than "The economy is full of uncertainty;" however, if he wants to get a reputation as intelligent and worth listening to, I really think he should dial back his boastful certainty.
Overall, I learned a ton from this book, and I'm glad I read it.
July 5, 2020
The book title, though catchy, essentially indicates the probable loss of confidence in Dollar over the years due to the model of the current international monetary system. Now, the book, a non-fiction being at 398 pages is for sure long (, and totally opinionated), but it still gives a hell lot of knowledge about how the system works, what the governments are capable of doing, what they are already doing, and some ideas on what you can do to save yourself in the likely event of a system-wide collapse.
If you believe everything the book says, you'd be better off investing all your savings into gold and running off to a remote location where no one can touch you, but then, you have to have savings for that first!
IMO, even though the knowledge of all the technical stuff is a plus point, all the speculation portion is a bit dated, since the book was published in 2014, and the book being highly opinionated is another major drawback. There are always different POVs to a scenario, and they are explored only from a single viewpoint by the author. A great one time read nevertheless.
Ciao
Ash
If you believe everything the book says, you'd be better off investing all your savings into gold and running off to a remote location where no one can touch you, but then, you have to have savings for that first!
IMO, even though the knowledge of all the technical stuff is a plus point, all the speculation portion is a bit dated, since the book was published in 2014, and the book being highly opinionated is another major drawback. There are always different POVs to a scenario, and they are explored only from a single viewpoint by the author. A great one time read nevertheless.
Ciao
Ash
October 17, 2017
I should have done some research on the author before ordering - proudly describing project work for the CIA at the beginning really put me off. For people looking for alternative views and truth, you will probably be disappointed. Consider this snippet: "The 9/11 Commission Report is a monumental and excellent summary, a brilliant work of history..." Having said that, on the financial side there is plenty of good information, yet nothing groundbreaking that hasn't been said or heard in alternative news for years. Overall a disappointment.
November 16, 2024
Just like every bother ook by James Rickards: 100% doom and gloom, 100% predicting imminent crash, 0% accuracy. All his predictions are consistently wrong for decades, and his books are just tools to sell his overpriced services. Just google "James Rickards BBB" for all the reviews about his programs.
Rule for life: Just do the opposite of whatever James Rickards recommends and you will do great with your investments.
Rule for life: Just do the opposite of whatever James Rickards recommends and you will do great with your investments.
June 27, 2023
If there are 2 key sentences that would make me be more aware after reading this book, they would be:
“It is possible to start a war in a computer room or stock exchange that will send an enemy country to its doom... where is the battlefield? it can be anywhere" - Col Qiao Liang and Col Wang Xiang Sui 1996
"Information warfare will control the form and future of war".
“It is possible to start a war in a computer room or stock exchange that will send an enemy country to its doom... where is the battlefield? it can be anywhere" - Col Qiao Liang and Col Wang Xiang Sui 1996
"Information warfare will control the form and future of war".
category-dnf
February 22, 2024DNF!!
We can start with the fact that Rickards got most his first two projections completely wrong. Written in 2014, he completely failed to get anything correct for the next decade. I won’t penalize him for missing Covid and the changes to monetary policy that resulted but his failures elsewhere make a complete reading for me impossible.
We can start with the fact that Rickards got most his first two projections completely wrong. Written in 2014, he completely failed to get anything correct for the next decade. I won’t penalize him for missing Covid and the changes to monetary policy that resulted but his failures elsewhere make a complete reading for me impossible.
December 29, 2014
This is a fascinating book. Scary. Gives you a in-depth perspective on the global economy and the role monetary policy plays in the rise and fall of civilizations. Especially interesting if you love anthropology or sociology.
September 28, 2014
Despite its apocalyptic title, this is not really an end-of-days book. James Rickards is an astute analyst, and what he's writing about here is not really disappearance of the international monetary order so much as its transition into something radically new. What sets him apart from at least some of the other writers focusing nowadays on similar issues is that he has some fairly well-grounded ideas about what shape the new order may be trying to take. And while we're not talking quite Book of Revelation stuff here, the metamorphosis he envisions is inevitably a traumatic affair, particularly for the United States, whose currency enjoys a privileged status that cannot be expected to survive the approaching seismic shift.
So far as I can tell, Mr. Rickards is not an academically-trained economist. He is a fund manager who focuses on macro issues affecting his investments. However, he's well enough respected for his knowledge of the global monetary system that the U.S. Defense Department consults with him in war-scenario planning exercises, where hypothetical attacks against financial market targets are standard fare anymore. And he seems well-enough versed in conventional economic theory too. He just doesn't consider it much help in coming to grips with the real crisis affecting the global economy today.
For Rickards is a student of "Complexity Theory". And as such he does not offer any neatly-packaged prognostications of the type dear to the hearts of most academic economists. Complexity theorists, when applying their vision to economics, see financial markets as seas of mostly hidden variables, all of them playing off one another in ways that can never be predicted with any semblance of exactitude. Small movements morph into storms before much at all is apparent. And while the rough direction of things can sometimes be discerned, sudden events have a way of exploding out of nowhere and turning the picture upside-down. For economists and investors, according to Rickards, this is just the nature of the environment they inhabit, whether they know it or not.
Economic complexity is bad enough at a national level. It becomes orders of magnitude worse when we go global. In this book Rickards takes us on a quick guided tour of the world's economies, and he doesn't show us much to bring comfort to anyone hoping for a orderly resolution to our current problems. The United States is front-and-center to his critique, because the dollar remains the world's most important currency, and its precarious state threatens everybody. He flogs the dollar with the usual observation, i.e., that chronic trade and budget deficits and decades of increasingly easy money support a national consumption we've lost the ability to pay for. He says we get away with it only because of the reserve currency status, which forces other countries - most importantly China - in greater and lesser degrees to benchmark their currencies to the dollar, thereby exporting to them what should be domestic inflation in the U.S.
Interestingly, though, he is if anything even harder on China than he is on the U.S. He considers China ruled by what the calls a "parasitic elite" which manipulates a centralized state for its own benefit while distorting its economy with massive and wasteful infrastructure spending. He seems to regard China as a bubble economy and a huge crash site awaiting impact.
Making his way around the major economies, Rickards hammers Japan a well. He portrays it as a sort of microcosm for the rest of the developed world, calling it the "canary in a coal mine". Coping for many years with deflationary pressures, Japan is now, under Prime Minister Abe, attempting to break out with massive inflationary over-compensation that offers little hope of finding a stable equilibrium.
In what might strike some readers as incongruous, Rickards actually takes a moderately optimistic tone in his discussion of Europe. Dismissing the fears of "Euro-skeptics" , he argues that the economic power of Germany is sufficient to ensure the Euro's survival. Conceived as a kind of monetary glue for holding Europe together, the Euro is central to Germany's determination to ensure a permanent end to the continent's history of cataclysmic internecine wars. Survival, however, does not imply stability, and in the last analysis Rickards sees the Euro as one more in the global stew of fiat currencies headed towards a reckoning
He rounds out his monetary tour with brief discussions of the world's peripheral markets that Western bankers have, for marketing purposes, cobbled together under various cutesy acronyms: BRICS, BELLs, GIIPS, PIGS, and so forth. Rickards sees tiny rays of hope in certain of these places, but within the context of his Complexity Theory world view, any one of them is capable harboring the hidden spark poised to trigger a global contagion.
Which brings us around to Rickards' Idée Fixe, which is Gold. Insisting he is not a "Gold Bug", Rickards at one point even pokes gentle fun at theorists who see a return to a gold monetary standard as the only hope for heading off economic apocalypse. However, he then goes on to demonstrate that the pejorative term hardly has any meaning if it doesn't apply to him. For Rickards subscribes to the belief that gold itself is the only "true" money, and that its value is fixed. Apparent movements in its price should instead be viewed as fluctuations in the prices of the world's various fiat currencies, all of which revolve around it like so many planets orbiting the sun. This is, of course, a semantical point that is axiomatically true if we buy into his way of thinking. Most people, including myself, find it little hard to swallow today, in light of the fact that not one of the world's central banks recognizes any official relationship between gold and the value of its currency.
Rickards, however, works very hard to cover his base. He devotes quite a bit of text to the behavior of our central banks, who have since officially demonetizing gold in the 1970's, continued not only to hold it in large quantities but to actively trade it. Some banks, notably those of China and Russia, have even taken to accumulating new gold directly from their national mining industries. Those of us tending to see monetary gold as an anachronism generally have a hard time explaining this behavior. Rickards, for his part, explains it matter-of-factly. Far from seeing central bankers as out-of-touch bureaucrats, he writes about them as though they were about the only people in the world today really understanding what's going on, even if their true goals remain hidden behind their public agendas. He implies that, as a group, they fully understand that the fiat currency systems they manage are headed for collapse, and that they are all scrambling to pre-position themselves for the new monetary order. He doesn't portray them as wicked conspirators so much as institutions jockeying for position among themselves while struggling to salvage a degree of order out of the impending chaos.
Richards views the International Monetary Fund, far from being the obsolete institution some observers consider it to be, as standing front and center in the new international system. Its Special Drawing Right instrument, created in 1969 as a Reserve Currency supplement, has since its inception remained in the shadow of the U.S. dollar. Rickards, however, sees it or something akin to it emerging in the new order as the primary international reserve asset and a kind of global money, albeit in a radically redesigned form. The world's existing powers will negotiate the new design, with the power of their negotiating positions being determined, as it was at Bretton Woods in 1944, by their gold holdings and by the relative size of their economies. The existing SDR represents a basket of currencies - dollar, euro, yen, and pound - that is plainly obsolete and will be re-examined under the blazing light of crisis and replaced with something more representative of the world's economic balance. The dollar will still have power but one far diminished on a relative basis, particularly with regard to China's RMB.
What this means for Americans, if Rickards is right, is that our reserve currency subsidy will disappear and the purchasing power of our money will be sharply diminished. Living for us will become a lot more expensive.
I'm sure that many readers regard James Rickards as a crackpot, and this book does indeed at times verge on crankishness. However, he's too knowledgeable and writes in too measured a tone for his views to be dismissed quite so readily in my opinion. At the very least, Death of Money is informative and thought-provoking, and I recommend it.
So far as I can tell, Mr. Rickards is not an academically-trained economist. He is a fund manager who focuses on macro issues affecting his investments. However, he's well enough respected for his knowledge of the global monetary system that the U.S. Defense Department consults with him in war-scenario planning exercises, where hypothetical attacks against financial market targets are standard fare anymore. And he seems well-enough versed in conventional economic theory too. He just doesn't consider it much help in coming to grips with the real crisis affecting the global economy today.
For Rickards is a student of "Complexity Theory". And as such he does not offer any neatly-packaged prognostications of the type dear to the hearts of most academic economists. Complexity theorists, when applying their vision to economics, see financial markets as seas of mostly hidden variables, all of them playing off one another in ways that can never be predicted with any semblance of exactitude. Small movements morph into storms before much at all is apparent. And while the rough direction of things can sometimes be discerned, sudden events have a way of exploding out of nowhere and turning the picture upside-down. For economists and investors, according to Rickards, this is just the nature of the environment they inhabit, whether they know it or not.
Economic complexity is bad enough at a national level. It becomes orders of magnitude worse when we go global. In this book Rickards takes us on a quick guided tour of the world's economies, and he doesn't show us much to bring comfort to anyone hoping for a orderly resolution to our current problems. The United States is front-and-center to his critique, because the dollar remains the world's most important currency, and its precarious state threatens everybody. He flogs the dollar with the usual observation, i.e., that chronic trade and budget deficits and decades of increasingly easy money support a national consumption we've lost the ability to pay for. He says we get away with it only because of the reserve currency status, which forces other countries - most importantly China - in greater and lesser degrees to benchmark their currencies to the dollar, thereby exporting to them what should be domestic inflation in the U.S.
Interestingly, though, he is if anything even harder on China than he is on the U.S. He considers China ruled by what the calls a "parasitic elite" which manipulates a centralized state for its own benefit while distorting its economy with massive and wasteful infrastructure spending. He seems to regard China as a bubble economy and a huge crash site awaiting impact.
Making his way around the major economies, Rickards hammers Japan a well. He portrays it as a sort of microcosm for the rest of the developed world, calling it the "canary in a coal mine". Coping for many years with deflationary pressures, Japan is now, under Prime Minister Abe, attempting to break out with massive inflationary over-compensation that offers little hope of finding a stable equilibrium.
In what might strike some readers as incongruous, Rickards actually takes a moderately optimistic tone in his discussion of Europe. Dismissing the fears of "Euro-skeptics" , he argues that the economic power of Germany is sufficient to ensure the Euro's survival. Conceived as a kind of monetary glue for holding Europe together, the Euro is central to Germany's determination to ensure a permanent end to the continent's history of cataclysmic internecine wars. Survival, however, does not imply stability, and in the last analysis Rickards sees the Euro as one more in the global stew of fiat currencies headed towards a reckoning
He rounds out his monetary tour with brief discussions of the world's peripheral markets that Western bankers have, for marketing purposes, cobbled together under various cutesy acronyms: BRICS, BELLs, GIIPS, PIGS, and so forth. Rickards sees tiny rays of hope in certain of these places, but within the context of his Complexity Theory world view, any one of them is capable harboring the hidden spark poised to trigger a global contagion.
Which brings us around to Rickards' Idée Fixe, which is Gold. Insisting he is not a "Gold Bug", Rickards at one point even pokes gentle fun at theorists who see a return to a gold monetary standard as the only hope for heading off economic apocalypse. However, he then goes on to demonstrate that the pejorative term hardly has any meaning if it doesn't apply to him. For Rickards subscribes to the belief that gold itself is the only "true" money, and that its value is fixed. Apparent movements in its price should instead be viewed as fluctuations in the prices of the world's various fiat currencies, all of which revolve around it like so many planets orbiting the sun. This is, of course, a semantical point that is axiomatically true if we buy into his way of thinking. Most people, including myself, find it little hard to swallow today, in light of the fact that not one of the world's central banks recognizes any official relationship between gold and the value of its currency.
Rickards, however, works very hard to cover his base. He devotes quite a bit of text to the behavior of our central banks, who have since officially demonetizing gold in the 1970's, continued not only to hold it in large quantities but to actively trade it. Some banks, notably those of China and Russia, have even taken to accumulating new gold directly from their national mining industries. Those of us tending to see monetary gold as an anachronism generally have a hard time explaining this behavior. Rickards, for his part, explains it matter-of-factly. Far from seeing central bankers as out-of-touch bureaucrats, he writes about them as though they were about the only people in the world today really understanding what's going on, even if their true goals remain hidden behind their public agendas. He implies that, as a group, they fully understand that the fiat currency systems they manage are headed for collapse, and that they are all scrambling to pre-position themselves for the new monetary order. He doesn't portray them as wicked conspirators so much as institutions jockeying for position among themselves while struggling to salvage a degree of order out of the impending chaos.
Richards views the International Monetary Fund, far from being the obsolete institution some observers consider it to be, as standing front and center in the new international system. Its Special Drawing Right instrument, created in 1969 as a Reserve Currency supplement, has since its inception remained in the shadow of the U.S. dollar. Rickards, however, sees it or something akin to it emerging in the new order as the primary international reserve asset and a kind of global money, albeit in a radically redesigned form. The world's existing powers will negotiate the new design, with the power of their negotiating positions being determined, as it was at Bretton Woods in 1944, by their gold holdings and by the relative size of their economies. The existing SDR represents a basket of currencies - dollar, euro, yen, and pound - that is plainly obsolete and will be re-examined under the blazing light of crisis and replaced with something more representative of the world's economic balance. The dollar will still have power but one far diminished on a relative basis, particularly with regard to China's RMB.
What this means for Americans, if Rickards is right, is that our reserve currency subsidy will disappear and the purchasing power of our money will be sharply diminished. Living for us will become a lot more expensive.
I'm sure that many readers regard James Rickards as a crackpot, and this book does indeed at times verge on crankishness. However, he's too knowledgeable and writes in too measured a tone for his views to be dismissed quite so readily in my opinion. At the very least, Death of Money is informative and thought-provoking, and I recommend it.
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