326 of 340 people found the following review helpful
5.0 out of 5 stars The best thing since sliced bread?
Jim Rickards, who is famous, among other things, for his ability to accurately predict the Fed's moves ahead of time. His most recent accurate call was the implementation of Operation Twist, i.e the selling of short-term government debt and the buying of long-term government debt in order to increase short-term interest rates and decrease long-term interest rates...
Published on November 11, 2011 by Erez Davidi
107 of 123 people found the following review helpful
3.0 out of 5 stars Currency Wars: Reflection of a Bankrupt Ethos
James Rickards demonstrates convincingly that currency wars have had a poor track record over time. These wars are mutually destructive because they invite retaliation and have unintended consequences. Despite this poor track record, central banks continue to resort to this "beggar-my-neighbor" policy. Think for instance about the U.S. Federal Reserve and its...
Published on November 28, 2011 by Serge J. Van Steenkiste
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326 of 340 people found the following review helpful
5.0 out of 5 stars The best thing since sliced bread?,
This review is from: Currency Wars: The Making of the Next Global Crisis (Kindle Edition)
Jim Rickards, who is famous, among other things, for his ability to accurately predict the Fed's moves ahead of time. His most recent accurate call was the implementation of Operation Twist, i.e the selling of short-term government debt and the buying of long-term government debt in order to increase short-term interest rates and decrease long-term interest rates.
The main theme of the book is that the world is already heading toward a full-blown currency war which will bring even harsher economic turmoil to the world economy than the one we experienced in the last three years since the housing bubble burst in the U.S.
Rickards explores in depth, basing his arguments on past currency wars such as the one after WW1 between several European countries and the U.S., and why currency wars are a lose-lose situation. In short, Rickards's main argument is that countries around the world are devaluing their currencies in order to boost their exports (domestically produced goods and services will be cheaper for foreigners) thereby increasing their GDP. However, such actions will frequently be met by mutual currency devaluation by other countries or by some protectionist policy such as tariffs. Therefore, countries will gain a temporary advantage until other countries retaliate, the end result of which will be: inflation brought on from currency devaluation, protectionism and the halt of free trade, thus - wealth destruction. And in a worst case scenario, an outright military conflict.
As was mentioned above, I found Rickards's thesis to be well argued and backed with plenty of historical facts. To sum up, this book just has it all, great and engaging writing, fascinating economic history, and shrewd analysis of the current and coming global crisis.
172 of 181 people found the following review helpful
5.0 out of 5 stars Currency Wars: The Making of the Next Global Crisis,
No one is safe from Rickards' insightful analysis in this original and fast-paced history of world economic and monetary policy and the currency wars that have led to destructive outcomes more than once in the last hundred years. Despite the fact that repeated manipulation of currency by various countries throughout recent history in an attempt to dominate trade and spur domestic economic growth has failed miserably, the U.S. now faces a new currency war that might be, as Rickards says, "the currency war to end all currency wars." His disdain for the use of Quantitative Easing and the creation of a new world central bank is palpable and the urgency with which he makes his argument is cogent and frankly, terrifying. Rickards tells a fascinating story, taking the reader from the use of gold as an international currency in the Sixth century BC up to the current day, seamlessly connecting historical events in a manner that will appeal to experts and novices alike. His reductionist descriptions and gallows humor spares no one, and his analogies are both informative and beautifully written. Currency Wars is a must read for everyone, from classically-trained economists to small-time investors. But beware: after you read this book, instead of stuffing your mattress with cash, you may be inclined to do so with gold bullion.
218 of 241 people found the following review helpful
5.0 out of 5 stars Unlike 2008...this time we've been warned.,
If you have the stomach for doing a deep dive into the causes and cures of the worldwide financial morass we're in, here it is! "Currency Wars" takes you on a journey unlike any other. From a firsthand account of the wranglings at a mock "financial war game" in the bowels of the Pentagon, through a rich and literate history of previous currency wars with their devastating outcomes, Rickards is in full command of his topic. The author then brings us right up to present moment where he offers possible endgame scenarios to this latest currency war: paper, gold, or chaos! With outcome uncertain and stakes sky high, the tension is palpable! The final chapter is simply mind blowing! But that's not all. "Currency Wars" isn't simply an economics or history book. Rickards gives us a lot more. Chapter 9 is the most stinging indictment yet of the policy and intellectual failures of the Fed, Keynesianism and Monetarism. When you finish Chapter 9 your faith in economic conventional wisdom will be thoroughly shattered. The author also offers up some of the most original theory and analysis in economics since John Maynard Keynes himself in the 1920's. It's conceptually challenging but well worth the effort.
Unlike the financial meltdown of '08, this time you can say you've been warned. Extremely timely, and yet ahead of its time, "Currency Wars" is a revelation. The Media and politicians are so far behind the curve on this story that once they start giving it some weight it will already be too late to save yourself financially. You must read this book now!
69 of 75 people found the following review helpful
5.0 out of 5 stars A MUST READ!,
A currency war is a desperate and dark road your government takes you down when they become incapable of spurring domestic growth by any other means. But "stealing" growth from other countries by printing tons of money and cheapening one's own currency comes with an enormous price tag. In the new and complex arena of "geo-politics meets financial warfare," James Rickards is an intellectual tour de force. "Currency Wars" takes us on a whirlwind global tour from Peking to Moscow to Dubai, where governments and even everyday citizens are already hedging themselves against a declining U.S. Dollar. Sadly, most Americans are completely unaware of the dangers surrounding them and are still just hoping for the best. "Currency Wars" gives us a full understanding of the forces and players involved in taking us into this financial firestorm that's about to flashover. Once armed with this book, everyday Americans will also have a fighting chance. Thank you James!
42 of 45 people found the following review helpful
5.0 out of 5 stars Wow! The Next Global Financial Crisis,
The real test of any business or finance book is - "Did it change my thinking or my behavior?"
The answer to Jim Rickards's "Currency War's" is a resounding yes. I have gone from endorsing a Warren Buffet like view of investing in gold, i.e. little economic value in the yellow metal, to reallocating a sizable portion of my portfolio to gold and gold miners.
Rickard's work does an outstanding job of giving an over view of the evolving set of financial and economic theories that are driving current economic thought. And more importantly, he brings a great perspective to the complexity and unpredictability of future economic outcomes. The end game is not pretty!
With his background as a senior executive at Long Term Capital, Mr. Rickards had a ringside seat watching what was then viewed as the smartest and best financial minds nearly create a global crisis.
The making of the next global crisis becomes very clear in this well written book.
39 of 42 people found the following review helpful
5.0 out of 5 stars Currency Wars: Be Enlightened!,
Currency Wars is not a typical book about finance. It is, however, a fascinating path to understanding money, history and war. The first chapter reels you in with what happens behind the doors in a top secret weapons laboratory. This time the weapon is currency and stocks.
The reader understands for the first time, how global leaders from Dubai, to Moscow to Peking are building a cache of financial weapons while the US sits this one out.
Rickards shatters your faith in conventional economic wisdom. The final chapter challenges the reader: "Paper, Gold, or Chaos?" Required reading for everyone since we cannot rely on the Fed to do the intellectually challenging work that Rickards has done.
107 of 123 people found the following review helpful
3.0 out of 5 stars Currency Wars: Reflection of a Bankrupt Ethos,
James Rickards demonstrates convincingly that currency wars have had a poor track record over time. These wars are mutually destructive because they invite retaliation and have unintended consequences. Despite this poor track record, central banks continue to resort to this "beggar-my-neighbor" policy. Think for instance about the U.S. Federal Reserve and its unofficial dual mandate of easy money and dollar devaluation. Mr. Rickards is definitely at his best in his scathing overview of the misuse of economics in chapter 9. The U.S. Federal Reserve comes out as an underperforming organization that clearly does not deliver on its official dual mandate of price stability and full employment. Monetarism, Keynesianism, and financial economics are all riddled with flaws with no definitive solution in sight to this day. Mr. Rickards relies on the complexity-based, money-as-energy model to get insight in how what he calls Currency War III (2010-?) will evolve if money printing and debt expansion continue unabated. The U.S. should not take the role of the U.S. dollar as the leading reserve currency for granted. Mr. Rickards explores the four possible outcomes in prospect for the U.S. dollar in order of increasing disruptive potential. These scenarios are multiple reserve currencies, special drawing rights (SDRs), the return of the gold standard (the author's preference), and chaos. To avert the possible collapse of the U.S. dollar, Mr. Rickards pleads for a mix of descaling, compartmentalization, and simplification that aim at shrinking or simplifying the financial system. Mr. Rickards is at his weakest on this subject because of a lack of a detailed action plan. In summary, "Currency Wars" is a good introduction to a subject in need of more visibility.
21 of 21 people found the following review helpful
5.0 out of 5 stars A very different look at the world economy. Riveting.,
Currency Wars was a complete revelation to me. The author goes into the past century of busts, booms, depressions, recessions, and inflation with a completely different approach than any other author that I have read (and I have read many!). Mr. Rickards writes about the changing nature of currencies (concentrating on the dollar), the gold standard, and how governments have been manipulating their currencies mostly to catastrophic results.
I just have to recommend the book if nothing more than to have people exposed to a much different way of looking at how the world economy works and how it is constantly being fought over. It is novel and though provoking. It will leave you lying in bed muttering to yourself "What was that part about gold again?" or "Breakdown of complex systems? How does THAT explain the US economy?"
It is a GREAT read, entertaining and filled with conspiracies that took my breath away and made me laugh out loud. Having the US dictating to the world by John Connally and Richard Nixon to bring about trade surpluses to the US only to have it backfire so badly is a hel'of'a story. How the Fed's Ben Bernanke is doing the same with QE and QE2 by causing inflation around the world and selling it by promoting low interest rates AND the specter of high inflation is mind boggling. It just sounds so right.
The headiest part is how the author systematically shows how badly decisions have been made due to outdated, outmoded, or dismissed economic theories over the past 50 years. His own observations are backed up by well thought out reasons why things are now. He has a willingness to look at alternative economic theories that are completely new to me and that makes the world a much messier place than anyone dares to admit. Throwing complexity theory, fractals, and chaos into the world economies and you can get the completely unexpected results that we are seeing today that "normal" economic theories cannot explain at all. The author admits that this is on the edge of our knowledge but something new is needed as the "normal" economics that we are working with has failed us so miserably.
I don't think I have read a more scathing review of the myriad failures that the US Fed have made from the day it was created. The Great Depression, the mighty inflationary spiral of of the 70's, the housing and stock bubbles, and the Great Panic of 2008 can be laid directly at their doorstep. It has failed in ALL of it mandates. It has failed to hold inflation in check. It has failed to keep unemployment low. It has failed to bail out banks that deserved to be bailed out. It has started currency wars with England, France, and now China. It has loaned huge amounts of money to banks that are not even part of their charter in Europe and Asia. It has made itself completely insolvent and is hiding it with the Treasury's help. The Fed is manipulating our expectations by waving their hands around in the magic trick of making us concentrate on low interest rates and expectations of high inflation to make us buy things to bail out the government. I will never trust the Fed again.
The final chapter is a shocking look at the possibilities for a complete meltdown of the US currency that reads like a WSJ article in the near future. The most probable result is a general collapse of the currency, markets, and economies around the world within a matter of days. How will the US respond? Possibly going back to a more rational form of a gold standard seems to be the best answer the book comes up with, but there are other possibilities including an economic dark age descending upon us all.
There are answers in the book on how to unravel the mess we are in (for instance break up the huge banks, outlaw derivatives, massively decrease the size of governments, and go back to some sort of gold standard) but don't expect anyone to believe them, especially those who are the ones receiving the tremendous benefits they get from an unbalanced economy. No easy answers, no comfort to be had here, only the realization that there is a lot more going on than I had ever imagined and no one is really in control.
28 of 30 people found the following review helpful
3.0 out of 5 stars Another Book Review from the Aleph Blog,
I sometimes call it "the race to the bottom." During a time where most nations are feeling economically weak, some decide to weaken their currency, so that their exporters can do better, which supposedly preserves jobs in export industries.
Producers have concentrated interests, and lobby well. The interests of consumers are diffuse, and don't gain favor from governments kowtowing to producers, who also find more effective ways of rewarding political friends.
If we were intelligent, we would know this is a loser of a battle, and we would realize that this simply leads to inflation globally. Better to sit it out, ignore the debasement, and realize it will eventually burn out. Unlike the current Federal Reserve, don't add to the debasement, it just adds fuel to the global inflationary fire.
This book starts with a currency war-gaming scenario. In the game, the author pursues a course where on one of the non-US teams decides to link their currency to gold. Initially derided, they end up as one of the victors at the end of the game, even though no one else follows them.
The book continues with an examination of three eras where currencies were at war: 1) prior to the Great Depression until we leave the internal gold standard, 2) the inflationary guns and butter late '60s to mid '80s, encompassing the period where the US goes off the gold standard entirely, and global currencies float. We go through a period of high inflation after that, followed by an extreme rise in interest rates. 3) The book examines the present time, where every nation wants to devalue, so that it exporters are not harmed.
If we left the gold standard to get stability, we did not get it. If we left the gold standard to benefit the global or US economies, the benefit has not appeared.
But, from chapters 7 through 10, the book muddles. It talks about a wide variety of ideas loosely related to the main thesis, but proving little one way or another. The book does not build toward its conclusion in chapter 11, where it suggests a return to a gold standard.
A gold standard exists to preserve purchasing power, and takes power out of the hands of governments that want to favor one set of parties over another, whether favoring savers or investors, producers or consumers. It takes many questions out of the hands of the government, and reduces the need for an expensive central bank filled with PhDs in Economics who really have no idea how economies work, because they are mathematicians, and don't get the broader societal ramifications of what their policies encourage.
I enjoyed this book, and would recommend it. The book isn't linear to its goal, but you will learn a lot along the way, even if it is circuitous.
Who would benefit from this book: This book is for those frustrated with the way that our government are handling monetary affairs, and are looking for a better way.
41 of 46 people found the following review helpful
5.0 out of 5 stars Explosive Read!,
This is a MUST READ for all of us as we watch the turmoil in the markets today. Very interesting, hard to put down review of traditional currency policy, including the origins of the FED and the rise and fall of the gold standard, together with solid analysis and arguments for changes needed in monetary policy will have you turning pages. Rickards has done his homework and his grasp of subject matter will have you asking for more when you've read the final page!
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Currency Wars: The Making of the Next Global Crisis by James Rickards (Paperback - August 28, 2012)