Currency Wars: The Making of the Next Global Crisis (Portfolio) [Hardcover]

James Rickards (Author)

Book Description

Publication Date: November 10, 2011 | Series: Portfolio

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.

Editorial Reviews

Review

"A literate financier with a global view."

(-Barron's )

"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 advisor to the director of the CIA, author )

"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 D )

"The leading edge of tomorrow''s warfare is economic, and we are being probed daily by those who would do us grave harm. . . . Fortunately, we are developing means of detection and a small cadre who understands that the economy intersects national security at the ground zero of modern warfare. Currency Wars provides the best introduction to how it has occurred in the past, how it is occurring today, and how we may prepare ourselves to prevent it from happening tomorrow."

(-Brigadier General (Ret.) Joseph L. Shaefer, U.S. Air Force Intelligence Crisis )

"A captivating, articulate, and thoughtful account of failed attempts by governments to create wealth by debasing their currencies. Currency Wars should be required reading for all policy makers, MBA students, and anyone concerned about the long-term stability and prosperity of Western democracies."

(-Sorin Sorescu, professor of finance, Texas A&M University )

"Rickards, experienced financial adviser, investment banker, and risk manager, tells us we are in a new currency war that could destroy faith in the U.S. dollar; he examines that war through the lens of economic policy, national security, and historical precedent. As a national security issue, he tells a fascinating story of his involvement with the Pentagon and other agencies in designing and participating in a war game using currencies and capital markets, instead of ships and planes, to gain early warning of attacks on the U.S. dollar. The author concludes that "mainstream economists and central bankers alike are well aware of dollar weakness and the risks to international monetary stability from the new currency wars." He sees four prospects for the dollar-multiple reserve currencies, special drawing rights, gold, and chaos. Rickards'' ideas are controversial and will attract support and criticism across many disciplines. Nevertheless, he presents a compelling case for his views and offers thought-provoking information for library patrons. This is a must-read book."

(-Mary Whaley, Booklist )

About 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.

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Product Details

• Reading level: Ages 18 and up
  
• Hardcover: 304 pages
• Publisher: Portfolio Hardcover; 1 edition (November 10, 2011)
• Language: English
• ISBN-10: 1591844495
• ISBN-13: 978-1591844495
• Product Dimensions: 9.1 x 6.4 x 1.1 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (110 customer reviews)
• Amazon Best Sellers Rank: #1,199 in Books (See Top 100 in Books)
  • #2 in Books > Business & Investing > Economics > Money & Monetary Policy
  • #5 in Books > Business & Investing > International > Economics
  • #6 in Books > Business & Investing > Reference

More About the Author

James Rickards is the author of Currency Wars: The Making of the Next Global Crisis, published by Penguin/Portfolio, November 2011.

He is Senior Managing Director at Tangent Capital Partners LLC, a merchant bank based in New York City, and is Senior Managing Director for Market Intelligence at Omnis, Inc., a technical, professional and scientific consulting firm located in McLean, VA. Mr. Rickards is a seasoned counselor, investment banker and risk manager with over thirty years experience in capital markets including all aspects of portfolio management, risk management, product structure, financing, regulation and operations. Mr. Rickards' market experience is focused in alternative investing and derivatives in global markets. He has also served as General Counsel at several alternative asset management companies and a stock exchange facility and is expert in fund governance and international fund structures.

Mr. Rickards' career spans the period since 1976 during which he was a first hand participant in the formation and growth of globalized capital markets and complex derivative trading strategies. He has held senior executive positions at sell side firms (Citibank and RBS Greenwich Capital Markets) and buy side firms (Long-Term Capital Management and Caxton Associates) as well as technology firms (OptiMark Technologies and Omnis). Mr. Rickards has been a direct participant in many of the most significant financial events in recent decades including the release of US hostages in Iran in 1981 and the LTCM hedge fund collapse of 1998 in which Mr. Rickards was the principal negotiator of the government-sponsored rescue. He was involved in the formation and successful launch of several hedge funds and fund-of-funds. His advisory clients include private investment funds, investment banks, litigation counsel, high-net worth individuals and government directorates. Since 2001, Mr. Rickards has applied his financial expertise to a variety of tasks for the benefit of the U.S. national security community and the Department of Defense. Mr. Rickards is licensed to practice law in New York and New Jersey and various Federal Courts and has held all major financial industry licenses.

Mr. Rickards has been a frequent speaker at conferences sponsored by bar associations and industry groups in the fields of derivatives, the international monetary system and hedge funds and is active in the International Bar Association. He has been the interviewed in The Wall Street Journal and on CNBC, Fox, CNN, NPR and C-SPAN and is an OpEd contributor to the Financial Times, New York Times and the Washington Post.

Mr. Rickards is a graduate school visiting lecturer in finance at Northwestern University, the School of Advanced International Studies and Singularity University. He has delivered papers on econophysics at the Applied Physics Laboratory, the Los Alamos National Laboratory and the NASA Ames Research Center. Mr. Rickards has written articles published in academic and professional journals in the fields of strategic studies, cognitive diversity, network science and risk management. He is an advisor to the Committee on Foreign Investment in the United States (CFIUS) Support Group of the Director of National Intelligence.

Mr. Rickards holds the following degrees: LL.M. (Taxation) from the New York University School of Law, New York City; J.D. from the University of Pennsylvania Law School, Philadelphia; M.A. in international economics from the Paul H. Nitze School of Advanced International Studies, Washington DC; and a B.A. degree with honors from the Krieger School of Arts & Sciences of The Johns Hopkins University, Baltimore.

Mr. Rickards is married, the father of three and lives in Darien, Connecticut. He is an avid sailor with extensive cruising experience in the Caribbean, Mediterranean and New England. He is also an experienced mountaineer following expeditions in the Alps, Andes, Cascades, Canadian Rockies and the Alaska Range.