Currency Wars: The Making of the Next Global Crisis

Currency Wars: The Making of the Next Global Crisis

by James Rickards
Currency Wars: The Making of the Next Global Crisis

Currency Wars: The Making of the Next Global Crisis

by James Rickards

Paperback

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Overview

In 1971, President Nixon imposed national price controls and took the United States off the gold standard, an extreme measure intended to end an ongoing currency war that had destroyed faith in the U.S. dollar. Today we are engaged in a new currency war, and this time the consequences will be far worse than those that confronted Nixon.

 

Currency wars are one of the most destructive and feared outcomes in international economics. At best, they offer the sorry spectacle of countries' stealing growth from their trading partners. At worst, they degenerate into sequential bouts of inflation, recession, retaliation, and sometimes actual violence. Left unchecked, the next currency war could lead to a crisis worse than the panic of 2008.

Currency wars have happened before-twice in the last century alone-and they always end badly. Time and again, paper currencies have collapsed, assets have been frozen, gold has been confiscated, and capital controls have been imposed. And the next crash is overdue. Recent headlines about the debasement of the dollar, bailouts in Greece and Ireland, and Chinese currency manipulation are all indicators of the growing conflict.

As James Rickards argues in Currency Wars, this is more than just a concern for economists and investors. The United States is facing serious threats to its national security, from clandestine gold purchases by China to the hidden agendas of sovereign wealth funds. Greater than any single threat is the very real danger of the collapse of the dollar itself.

Baffling to many observers is the rank failure of economists to foresee or prevent the economic catastrophes of recent years. Not only have their theories failed to prevent calamity, they are making the currency wars worse. The U. S. Federal Reserve has engaged in the greatest gamble in the history of finance, a sustained effort to stimulate the economy by printing money on a trillion-dollar scale. Its solutions present hidden new dangers while resolving none of the current dilemmas.

While the outcome of the new currency war is not yet certain, some version of the worst-case scenario is almost inevitable if U.S. and world economic leaders fail to learn from the mistakes of their predecessors. Rickards untangles the web of failed paradigms, wishful thinking, and arrogance driving current public policy and points the way toward a more informed and effective course of action.


Product Details

ISBN-13: 9781591845560
Publisher: Penguin Publishing Group
Publication date: 08/28/2012
Pages: 320
Sales rank: 121,107
Product dimensions: 5.40(w) x 8.30(h) x 1.00(d)
Age Range: 18 Years

About the Author

James Rickards is the Editor of Strategic Intelligence a financial newsletter. He is The New York Times bestselling author of The New Great Depression (2020), Aftermath (2019), The Road to Ruin (2016), The New Case for Gold (2016), The Death of Money (2014), and Currency Wars (2011) from Penguin Random House. He is an investment advisor, lawyer, inventor, and economist, and has held senior positions at Citibank, Long-Term Capital Management, and Caxton Associates. In 1998, he was the principal negotiator of the rescue of LTCM sponsored by the Federal Reserve. His clients include institutional investors and government directorates. He is an op-ed contributor to the Financial TimesEvening StandardThe TelegraphNew York Times, and Washington Post, and has been interviewed by BBC, CNN, NPR, CSPAN, CNBC, Bloomberg, Fox, and The Wall Street Journal. Mr. Rickards is a guest lecturer in globalization and finance at The Johns Hopkins University, Georgetown University, Trinity College Dublin, The Kellogg School at Northwestern, the U.S. Army War College and the School of Advanced International Studies. He has presented papers on risk at Singularity University, the Applied Physics Laboratory, and the Los Alamos National Laboratory. He is an advisor on capital markets to the U.S. intelligence community, and the Office of the Secretary of Defense, and is on the Advisory Board of the FDD Center on Economic and Financial Power in Washington DC. Mr. Rickards holds an LL.M. (Taxation) from the NYU School of Law; a J.D. from the University of Pennsylvania Law School; an M.A. in international economics from SAIS, and a B.A. (with honors) from Johns Hopkins. He lives in New Hampshire.


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Table of Contents

Preface xiii

Part 1 War Games 1

Chapter 1 Prewar 3

Chapter 2 Financial War 17

Part 2 Currency Wars 35

Chapter 3 Reflections on a Golden Age 37

Chapter 4 Currency War I (1921-1936) 56

Chapter 5 Currency War II (1967-1987) 78

Chapter 6 Currency War 111(2010-) 98

Chapter 7 The G20 Solution 125

Part 3 The Next Global Crisis 143

Chapter 8 Globalization and State Capital 145

Chapter 9 The Misuse of Economics 168

Chapter 10 Currencies, Capital and Complexity 195

Chapter 11 Endgame-Paper, Gold or Chaos? 226

Conclusion 255

Afterword 259

Acknowledgments 267

Notes 271

Selected Sources 279

Index 289

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

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