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 oil producing 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.”
“A terrifically interesting and useful book . . . fascinating." (Kenneth W. Dam, Former Deputy Secretary of the Treasury and Adviser to three Presidents)
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Great Information - Oversensationalized
Yes. There is a lot of information about how money works and how it affects international trade and money policy. This information takes a lot of thinking to understand and digest for a lay person like myself so multiple reads will be necessary to really get a firm grasp on all that was included in the book.
From the beginning I knew this book would have a bit of the "dooms day" tone. Luckily this was somewhat mild and the author did a pretty good job of focusing on the facts of how money works.
The main thing I got from the book is a high level "how money works" in today's international economy. It did a pretty good job bringing up and explaining topics, setting a foundation of knowledge so I now know what other books to look for to expand that knowledge. Some information went over my head and will take additional reading to clarify but I came away feeling like I got more than my money's worth in learning.
The author's final conclusion on what to do about where money is headed was included at the end which was much appreciated. However, his suggestions will likely only be helpful to the very wealthy. For example, buy undeveloped land so when the economy drops (as in a recession) you can develop that land cheaply. That isn't going to help people who either barely make ends meat (the majority of people) or who are just doing well to keep a modest savings for retirement.
So if you are looking for a formula to protect yourself from bad turns in the economy or the government screwing things up with bad monetary policy, and if you aren't wealthy, look elsewhere. But if you want a deeper understanding of how money works so you can more intelligently decide how to plan your finances for the future, this is an interesting read.
- A. Bono
Doomsday-ish, but some good info