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The Death of Money: The Coming Collapse of the International Monetary System
James Rickards
3.91 · Rating details · 1,654 ratings · 186 reviews
"The next financial collapse will resemble nothing in history... Deciding upon the best course to follow will require comprehending a minefield of risks, while poised at a crossroads, pondering the death of the dollar."
The international monetary system has collapsed three times in the past hundred years, in 1914, 1939, and 1971. Each collapse was followed by a period "The next financial collapse will resemble nothing in history... Deciding upon the best course to follow will require comprehending a minefield of risks, while poised at a crossroads, pondering the death of the dollar."
The international monetary system has collapsed three times in the past hundred years, in 1914, 1939, and 1971. Each collapse was followed by a period of tumult: war, civil unrest, or significant damage to the stability of the global economy. Now James Rickards, the acclaimed author of Currency Wars, shows why another collapse is rapidly approaching—and why this time, nothing less than the institution of money itself is at risk.
The American dollar has been the global reserve currency since the end of the Second World War. If the dollar fails, the entire international monetary system will fail with it. No other currency has the deep, liquid pools of assets needed to do the job.
Optimists have always said, in essence, that there's nothing to worry about—that confidence in the dollar will never truly be shaken, no matter how high our national debt or how dysfunctional our government. But in the last few years, the risks have become too big to ignore. While Washington is gridlocked and unable to make progress on our long-term problems, our biggest economic competitors—China, Russia, and the oilproducing nations of the Middle East—are doing everything possible to end U.S. monetary hegemony. The potential results: Financial warfare. Deflation. Hyperinflation. Market collapse. Chaos.
Rickards offers a bracing analysis of these and other threats to the dollar. The fundamental problem is that money and wealth have become more and more detached. Money is transitory and ephemeral, and it may soon be worthless if central bankers and politicians continue on their current path. But true wealth is permanent and tangible, and it has real value worldwide.
The author shows how everyday citizens who save and invest have become guinea pigs in the central bankers' laboratory. The world's major financial players — national governments, big banks, multilateral institutions — will always muddle through by patching together new rules of the game. The real victims of the next crisis will be small investors who assumed that what worked for decades will keep working.
Fortunately, it's not too late to prepare for the coming death of money. Rickards explains the power of converting unreliable money into real wealth: gold, land, fine art, and other long-term stores of value. As he writes: "The coming collapse of the dollar and the international monetary system is entirely foreseeable... Only nations and individuals who make provision today will survive the maelstrom to come."
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Published April 8th 2014 by Portfolio
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Sep 29, 2014 Nicholas rated it it was ok · review of another edition
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 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
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Nov 08, 2014 Eat.Sleep.Lift.Read. rated it liked it
We're all screwed.
Buy some gold and run for the hills. We're all screwed.
Buy some gold and run for the hills. ...more
Jul 10, 2014 Will Ducey rated it it was amazing
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 29 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.
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) ...more
Jul 31, 2014 Miriam rated it it was ok
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 R Did Al Qaeda Cash in on the 9/11 Attacks?
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 ...more
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May 28, 2014 Owlseyes marked it as to-read
Shelves: economy, currency
Some 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 I Some 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.
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
Mar 21, 2014 Dan Korth rated it it was amazing
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 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. ...more
Mar 22, 2014 John rated it really liked it
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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 m 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.
Jul 19, 2017 Nate rated it it was amazing
Entertaining read and very informative for those who aren't familiar with the role of the IMF in international monetary policy. Entertaining read and very informative for those who aren't familiar with the role of the IMF in international monetary policy. ...more
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Nov 11, 2017 Andrew rated it really liked it · review of another edition
Shelves: economics-finance, current-affairs
Interesting analysis of the problems with the current International Monetary system and its imminent demise.
Mar 08, 2019 Michele Harvey rated it really liked it
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 i 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. ...more
Jul 31, 2017 Venky rated it really liked it
Shelves: economics
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 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. ...more
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Nov 22, 2013 Rori Rockman rated it really liked it
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 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. ...more
Apr 09, 2014 Jean rated it really liked it
Shelves: non-fiction, audio-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 f 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. ...more
Sep 15, 2017 David rated it it was amazing
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 littl 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... ...more
Oct 17, 2017 Tobias Lege rated it it was ok
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 alternat 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. ...more
May 05, 2014 Jenny rated it it was amazing
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. 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. ...more
Nov 24, 2014 Kathleen Gear rated it it was amazing
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.
Sep 28, 2014 Mark Bachmann rated it really liked it
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 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.
Jan 30, 2020 Adrian rated it it was amazing
Though a more apt title would be The Death of the Dollar Standard, James Rickards nonetheless provides a detailed case as to how the Dollar's status as the Global Currency is not as strong as many assume, and that contrary to commonly held belief, there are several contenders suitable to replace the Dollar, not least of which are IMF Special Drawing Rights and Gold.
Rickards details how governments are in a race to acquire physical holdings of Gold, and that Gold price manipulation is already un Though a more apt title would be The Death of the Dollar Standard, James Rickards nonetheless provides a detailed case as to how the Dollar's status as the Global Currency is not as strong as many assume, and that contrary to commonly held belief, there are several contenders suitable to replace the Dollar, not least of which are IMF Special Drawing Rights and Gold.
Rickards details how governments are in a race to acquire physical holdings of Gold, and that Gold price manipulation is already underway. Despite various Gold related contracts, which he examines, he nonetheless maintains that Gold's status in its actual, physical form, unrelated to any contracts, is nonetheless unshakeable as a guarantor of value.
Rickards also details the evolution of the IMF and its role, from an initially uncertain institution, to its present role as a de facto World Central Bank. It is on this basis that Rickards contends that Special Drawing Rights may be rolled out in the future as a Dollar Replacement when sufficient confidence in the Dollar has been eroded.
The lodestar of Rickards's argument is confidence. The Dollar's status as the Global Currency hinges on government and investor confidence, and if the United States continues down its current path, it is only a matter of time before the machinations of US opponents, coupled with a general collapse in confidence, ushers in a collapse of the Dollar Standard.
The work in itself bears similarities to Currency Wars and the more recent Road to Ruin, but nonetheless contains enough sufficient gems of information, penetrating insight, decent analysis, and most of all, readability, to make this a worthy read for any economics enthusiast. ...more
Jun 11, 2019 Ryan Shea added it
Money is not so simple. Terrorism and monetary espionage are the new norm. The 9/11 attacks for example illustrate the potential cost-effective wealth destruction capabilities of terror over traditional warfare. Propping up confidence, while attempting to continue inflation are the roles of central banks. Why is inflation good for a government? It's what they must do - in order to reduce the burden of accumulated debt in *real* terms, while at the same time ensuring tax revenue (if your salary h Money is not so simple. Terrorism and monetary espionage are the new norm. The 9/11 attacks for example illustrate the potential cost-effective wealth destruction capabilities of terror over traditional warfare. Propping up confidence, while attempting to continue inflation are the roles of central banks. Why is inflation good for a government? It's what they must do - in order to reduce the burden of accumulated debt in *real* terms, while at the same time ensuring tax revenue (if your salary has a nominal 5% increase that is taxed - if efficiencies and technology lead to lower consumer prices, that lower price gain is not taxed).
The financial machinery of the world is fragile and increasingly leveraged, with higher debt to gdp ratios. Gold is still money, and plays a key role for central banks and the IMF, with economic powers such as China attempting to increase their holdings so that they would have a roughly proportional place at the table in a new world order of a future gold-backed dollar or IMF SDR world rather than USD based. Once this equalization happens the inflation flood gates will likely open wider. What to do personally? Hold gold, fine art, and land - hedges against both massive inflations or deflations. ...more
Jul 05, 2020 Ashrut Arya rated it liked it
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 co 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.
Ash ...more
May 10, 2020 Robin rated it liked it
Rickards insights into geopolitical, strategic economics are fascinating and insightful.
Whilst there is a clear effort to remain objective and analytical in describing monetary policy of central banks, and the influence of 'the global elite', it's clear that Rickards has a biased view on contemporary history, and that the punchline of the book is always going to turn into 'another case for investing in gold'.
The book would go from good to great if there were a little more analysis of WHY rampa Rickards insights into geopolitical, strategic economics are fascinating and insightful.
The book would go from good to great if there were a little more analysis of WHY rampant fiat-currency price inflation has not happened yet, in the last 2 decades, despite seemingly uncapped money-printing. We have to look for answers elsewhere, because Rickards doesn't offer any beyond "gold is the only real money, and the price of gold is being suppressed by anonymous market actors".
He makes a good case for it though.... But I'd like to read more about this from other sources. ...more
Jan 28, 2018 Adam Eivy rated it really liked it
The most enjoyable parts of this book are the story about predicting insider trading. However, being new to many of the global economic workings, I found a lot of new avenues to research. His cases for gold require more backing for my taste and I was astounded to find that many of the key points around the difficulty of moving gold around the world are better arguments for bitcoin (or a new IMF designed and controlled cryptocurrency).
Now I'm off to read his more recent book to see if his argumen The most enjoyable parts of this book are the story about predicting insider trading. However, being new to many of the global economic workings, I found a lot of new avenues to research. His cases for gold require more backing for my taste and I was astounded to find that many of the key points around the difficulty of moving gold around the world are better arguments for bitcoin (or a new IMF designed and controlled cryptocurrency).
Now I'm off to read his more recent book to see if his arguments have changed at all—though I know he has recently declared that the non-deflationary value of gold should be closer to $10K/ounce currently and he believes 2018 is another gold boom year.
Interesting book. Good food for thought, though take this with a grain of salt that the author is a gold maximalist. ...more
Jun 04, 2018 Andrecrabtree rated it really liked it
When I was a younger man, just entering the work force, and I encountered the concept of inflation I thought to myself "but that's not sustainable in the long term, eventually the chickens will come home to roost." I was right, but until I read this book I did really understand fully how complicit those in the power structure are. Inflation is the name of the game for a reason, and this book fleshed out the last bits of information I needed to fully grok that. That is not the purpose of the book When I was a younger man, just entering the work force, and I encountered the concept of inflation I thought to myself "but that's not sustainable in the long term, eventually the chickens will come home to roost." I was right, but until I read this book I did really understand fully how complicit those in the power structure are. Inflation is the name of the game for a reason, and this book fleshed out the last bits of information I needed to fully grok that. That is not the purpose of the book of course, it's to explain why "money" (by which we mean the US dollar) is on the way out (really? time will tell). Anyway, an enjoyable and enlightening read, and I look forward to reading more from Mr. Rickards. (just keep in mind fellow readers, you don't have to believe everything he says, but he does say some things worth thinking about.) ...more
Aug 23, 2017 Tarun Rattan rated it it was amazing
An eye opener in the real sense with lot of insider information on the current state of our financial system. So much is covered in this primer, dollar hegemony that is about to end, rise of China which might not be such a good thing, primacy of Gold which is real money?, full account of a small coterie of bureaucrats and technocrats who control and regularly messes up with global financial system. It is overall an interesting read, I don't think author has nailed this topic out in this book but An eye opener in the real sense with lot of insider information on the current state of our financial system. So much is covered in this primer, dollar hegemony that is about to end, rise of China which might not be such a good thing, primacy of Gold which is real money?, full account of a small coterie of bureaucrats and technocrats who control and regularly messes up with global financial system. It is overall an interesting read, I don't think author has nailed this topic out in this book but definitely has covered some ground on it. One thing author has missed completely is the rise of India, confident in the talent of its human capital and with growing conviction in its maturing economy. If anybody leaves India out from this analysis, it will be at their own peril. ...more
Jun 01, 2020 William rated it really liked it
4+ stars. This is a very interesting book about the structure of all things holding value and representing wealth. Surprisingly, I almost didn't get past the introduction, perhaps it seems written at the PhD level, full of terms and concepts almost beyond comprehension. Chapter One disposed of that concern as Rickards launches into a real-world description of Market Intelligence (MARKINT). Written originally in 2011, one wonders what the impact on Trump administration monetary policies have had 4+ stars. This is a very interesting book about the structure of all things holding value and representing wealth. Surprisingly, I almost didn't get past the introduction, perhaps it seems written at the PhD level, full of terms and concepts almost beyond comprehension. Chapter One disposed of that concern as Rickards launches into a real-world description of Market Intelligence (MARKINT). Written originally in 2011, one wonders what the impact on Trump administration monetary policies have had on the IMF movement toward replacing the dollar? Then again, there has been a crisis in US politics, the Corona virus, an economic shutdown, and now riots in the streets...
Oct 27, 2017 Felix de la Montana rated it it was amazing
Exquisite.
Hard to argue with a man who is pretty much always right.
Predicted Brexit. - check
Predicted Trump would win. - check
Correctly predicted the past dozen or so Fed Reserve Rate moves.
I don't have schooling in finance. Jim's books serve as my education. They are compelling and as broad as they are deep. Jim illustrates how financial systems mirror those in the natural world, like hurricanes. His metaphors are intriguing and his pedigree is superb. Agree or disagree, you will be intellec Exquisite.
I don't have schooling in finance. Jim's books serve as my education. They are compelling and as broad as they are deep. Jim illustrates how financial systems mirror those in the natural world, like hurricanes. His metaphors are intriguing and his pedigree is superb. Agree or disagree, you will be intellectually challenged with his arguments. ...more
Aug 19, 2018 Rebecca rated it liked it
Quite an eye opener with details and information about why we should buy gold, why fiat money involves a lot of risk, how the governments are trying to manipulate currencies, etc. good info, but there are some gruesome long paragraphs of details hard for the laymen to digest, at least for my first read. Overall I get the point at least. I did skip few lines here and there to get to the conclusions of the studies Rickards presented. OK book. Read it if you're curious why the author thinks the eco Quite an eye opener with details and information about why we should buy gold, why fiat money involves a lot of risk, how the governments are trying to manipulate currencies, etc. good info, but there are some gruesome long paragraphs of details hard for the laymen to digest, at least for my first read. Overall I get the point at least. I did skip few lines here and there to get to the conclusions of the studies Rickards presented. OK book. Read it if you're curious why the author thinks the economy will go down. ...more
Aug 19, 2019 Jennifer rated it it was ok
Scary stuff, but no advice as to what to do/invest in until the last two pages. Probably written from a conservative viewpoint but he states repeatedly that poor people are screwed because the redistribution of wealth from poor to rich has been going on for years through inflation and stagnant wages; the rich will always take care of themselves and the rest of us can suffer. There will be no social unrest of the "eat the rich" type - the militarized police (state Army) will handle all of that. M Scary stuff, but no advice as to what to do/invest in until the last two pages. Probably written from a conservative viewpoint but he states repeatedly that poor people are screwed because the redistribution of wealth from poor to rich has been going on for years through inflation and stagnant wages; the rich will always take care of themselves and the rest of us can suffer. There will be no social unrest of the "eat the rich" type - the militarized police (state Army) will handle all of that. My assessment: buy undeveloped land so you can hide. ...more
Apr 27, 2020 Christopher Manske rated it really liked it
With the changes to the Fed's powers in 2020, I picked up James Rickards' book a second time to reread his thoughts on The Death of Money. Rickards offers clear, easily readable insight into how the system on which money is built actually works. He explains that a crisis is coming and, instead of shouting it to the world, he calmly and methodically shows readers how and why the international monetary system has a collapse coming. This is a wonderful follow-up to the book Currency Wars but stands With the changes to the Fed's powers in 2020, I picked up James Rickards' book a second time to reread his thoughts on The Death of Money. Rickards offers clear, easily readable insight into how the system on which money is built actually works. He explains that a crisis is coming and, instead of shouting it to the world, he calmly and methodically shows readers how and why the international monetary system has a collapse coming. This is a wonderful follow-up to the book Currency Wars but stands alone just fine as well. ...more
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"The gross size of all bank derivatives positions now exceeds $650 trillion, more than nine times global GDP." — 1 likes
"If an economy has a stagnant labor force operating at a constant level of productivity, it will have constant output but no growth. The main drivers of labor force expansion are demographics and education, while the main drivers of productivity are capital and technology. Without those factor inputs, an economy cannot expand. But when those factor inputs are available in abundance, rapid growth is well within reach." — 0 likes