Currency Wars: The Making of the Next Global Crisis

Currency Wars: The Making of the Next Global Crisis

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by James Rickards
     
 

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How the worldwide currency war, already under way, will soon affect us all.

The debasement of the dollar, bailouts in Greece and Ireland, and Chinese currency manipulation are unmistakable signs that we are experiencing the start of a new currency war. Fought as a series of competitive devaluations of one country's currency against others, currency wars

Overview

How the worldwide currency war, already under way, will soon affect us all.

The debasement of the dollar, bailouts in Greece and Ireland, and Chinese currency manipulation are unmistakable signs that we are experiencing the start of a new currency war. Fought as a series of competitive devaluations of one country's currency against others, currency wars are one of the most destructive and feared outcomes in international economics. Left unchecked, the new currency wars could lead to a crisis worse than the panic of 2008.

Drawing on a mix of economic history, network science, and sociology, Currency Wars provides a rich understanding of the increasing threats to U.S. national security, from dollar devaluation to collapse in the European periphery, failed states in Africa, Chinese neomercantilism, Russian adventurism, and the current scramble for gold.

James Rickards, an expert who has worked at the highest levels of both finance and national security, explains everything we need to know about this growing global standoff. He takes readers around the world and behind closed doors to explain complex financial and political currents with absorbing firsthand anecdotes.

Editorial Reviews

Publishers Weekly
In 2008, Rickards, an investment banker with extensive experience in hedge funds, was invited to participate in a seminar sponsored by the Department of Defense, which examined the safety of U.S. sovereign wealth funds in the case of economic warfare. As Rickards explains, "Sovereign wealth funds are huge investment pools established by governments to invest their excess reserves." He participated in further seminars that addressed the impact of futures markets, derivatives, and more, on strategic commodities such as oil, uranium, copper, and gold. Rickards's first book is an outgrowth of his contributions and a later two-day war game simulation held at the Applied Physics Laboratory's Warfare Analysis Laboratory. He argues that a financial attack against the U.S. could destroy confidence in the dollar. In Ricards's view, the Fed's policy of quantitative easing by lessening confidence in the dollar, may lead to chaos in global financial markets. Possible strategies for dealing with such a situation include a return to the gold standard. Though the book will no doubt interest policymakers, even non-experts will be rewarded for their efforts. (Nov.)
Kirkus Reviews
A pioneer in the use of market intelligence for strategic purposes warns of the coming collapse of the dollar-based financial system. In Rickards' view, the world is currently going through a third currency war ("CWIII") based on competitive devaluations. CWII occurred in the 1960s and '70s and culminated in Nixon's decision to take the dollar off the gold standard. CWI followed WWI and included the 1923 German hyperinflation and Roosevelt's devaluation of the dollar against gold in 1933. Rickards demonstrates that competitive devaluations are a race to the bottom, and thus instruments of a sort of warfare. CWIII, he writes, is characterized by the Federal Reserve's policy of quantitative easing, which he ascribes to what he calls "extensive theoretical work" on depreciation, negative interest rates and stimulation achieved at the expense of other countries. He offers a view of how the continued depreciation and devaluation of the dollar will ultimately lead to a collapse, which he asserts will come about through a widespread abandonment of a worthless inflated instrument. Rickards also provides possible scenarios for the future, including collaboration among a variety of currencies, emergence of a world central bank and a forceful U.S. return to a gold standard through an emergency powers–based legal regime. The author emphasizes that these questions are matters of policy and choice, which can be different. Intriguing thinking about these current potentials and their history, especially given the dollar's pervasiveness in the pricing and exchange of global assets.
From the Publisher
  “One of the scariest books I’ve read this year. The picture that emerges is dark yet comprehensive and satisfying.” — Bloomberg Businessweek

 “One of the most urgent books of the fall.” — Mike Allen, Politico

  “Let’s hope he’s wrong.” — Financial Times

 “Unsettling…fascinating…a thorough analysis of how nations have manipulated their currencies…with disastrous consequences.” — Fort Worth Star-Telegram

Product Details

ISBN-13:
9781591844495
Publisher:
Penguin Publishing Group
Publication date:
11/10/2011
Pages:
304
Sales rank:
475,965
Product dimensions:
6.30(w) x 9.26(h) x 1.03(d)
Age Range:
18 Years

What People are saying about this

From the Publisher
“One of the most urgent books of the fall.”
—Mike Allen, Politico

“Let’s hope he’s wrong.”
Financial Times

“Rickards . . . has written one of the scariest books I’ve read this year. Though I was tempted at first to dismiss him as alarmist, his intelligent reasoning soon convinced me that we have more to fear than fear itself. Part history, part primer and analysis, the text covers topics ranging from the “misuse of economics” to complexity theory. The pieces, although disparate, fit together snugly, as in one of those mystery jigsaw puzzles that come with clues in lieu of cover art. The picture that emerges is dark yet comprehensive and satisfying.”
—Bloomberg Businessweek

“Unsettling . . . fascinating . . . a thorough analysis of how nations have manipulated their currencies . . . with disastrous consequences.”
—Fort Worth Star-Telegram

“Buy Currency Wars if you want to learn the history and language of the global currency markets and the political economy which they support.”
—Chris Whalen, Ritholtz.com

“Jim Rickards highlights dangerous dynamics between national security and the international financial markets. What we assumed was firm ground under our feet is more like the narrowing point of a precipice. Our politicians, national security experts, and financial markets, each chasing carrots dangling in front of them, fail to see that they are leading America right off the edge.”
—Charles A. Duelfer, former special adviser to the director of the CIA; author of Hide and Seek: The Search for Truth in Iraq

“Put on your flak vest and helmet and enter the dangerous battlefield of global finance. Jim Rickards takes you through a captivating roller-coaster ride—the past, the present, and a look at the problematical future of our ongoing currency wars.”
—Rear Admiral (Ret.) Stephen H. Baker, chief of staff, Fifth Fleet; recipient, Distinguished Service Medal

Meet the Author

James Rickards is a counselor, investment banker, and risk manager with over thirty years' experience in capital markets. He advises the Department of Defense, the U.S. intelligence community, and major hedge funds on global finance, and served as a facilitator of the first ever financial war games conducted by the Pentagon. A frequent guest on CNBC, CNN, Fox, C-SPAN, Bloomberg TV, and NPR, Rickards also lectures at Northwestern University and at the School of Advanced International Studies.

Visit currencywarsbook.com

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Currency Wars 4 out of 5 based on 0 ratings. 21 reviews.
Anonymous More than 1 year ago
I just bought the Nook version of this book and couldn't put it down. I've just started to learn about economics the last four years and highly recommend this book. If you are just starting to learn about our financial system or have been around I still recommend. The author is very informed and backs up all ideas with facts, history, etc., so unlike other economic books with too much political slant. It starts out as a narrative and then towards the middle he really starts to address the impact of dollar on world currencies...must read. Very rare to find an "economic" book with "suspense"...
Anonymous More than 1 year ago
A compeling thesis on monetary instability.
honestTT More than 1 year ago
This is an excellent book and well worth your time to read it. I'm not sure why some reviewers did not like the book since their arguments were incoherent with respect to the authors main points. Perhaps it is because they disagree with his conclusion as to the best way to avoid Ruinous economic consequences Precipitated currency wars.
Anonymous More than 1 year ago
Extremely enlightening. This is a must read if you are interested in macro economics.
Anonymous More than 1 year ago
After graduate studies in government, social sciences, and real estate, and 30 years of dealing with the consequences of our monetary policy in the real estate business, this is the first book I've seen that gives a broad and long perspective on the role of monetary policy in history. I pick my writers carefully so as not to bore myself, so after enjoying Michael Lewis, I decided to "plow through" this book only to understand what is going on today. It was surprisingly easy plowing. Rickards brings it all very much to life, and covers a huge amount of (extremely relevant) ground in a short time... with elegant illustrations and an intellectually honest, balanced treatment. Highly recommended to anyone planning to live through the next decade, or who would like to understand the news!
Anonymous More than 1 year ago
A look at how markets can be manipulated to ruin a country. They are doing it to Iran right now, but it turns out it can be done more subtly...
Anonymous More than 1 year ago
This is one of types of book that makes you think about what could and might happen. The basic arguments seem sound and the conclusions all seem possible. In fact I would say much of the book has to say is just down right scary. It was well worth time needed to read and think about it's contents.
fz01 More than 1 year ago
For me this was light reading, perhaps not enough substance. But, interesting that Pentagon was involved in staging such war games, i.e. involving currency as war. We are apparently witnessing it today, via Dollar, Euro, Pound, Renminbi. Author predicts four stages, from what we see today to SDR, and basket of currencies, only to end in gold as the final solution.
Anonymous More than 1 year ago
Easy to read even for foreigner. Exciting !
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Couldnt get through it
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Anonymous More than 1 year ago
A must read
greybees More than 1 year ago
Light reading Richards reports in all-embracing detail - office layouts, furniture arrangements, beverages drank, foods eaten, etc. - the preparation for and events of a multi-day conference sponsored by DOD. Not sure of the overall cost of the operation or its usefulness because before too many pages are past the reader is rather disinterested. A reference to the Drudge Report by the author as a prime source of his financial information is rather telling.