Enjoy fast, free delivery, exclusive deals, and award-winning movies & TV shows with Prime
Try Prime and start saving today with fast, free delivery

Kindle
$8.99

Available instantly

Audiobook
$0.00
with membership trial

Hardcover
$16.66

Paperback
$20.10

List Price: $29.00 Details

Save: $12.34 (43%)

Get Fast, Free Shipping with Amazon Prime FREE Returns

FREE delivery Friday, January 12 on orders shipped by Amazon over $35

Select delivery location

Only 1 left in stock - order soon.

$$16.66 () Includes selected options. Includes initial monthly payment and selected options. Details

Ships from

Amazon

Ships from

Amazon

Sold by

The BAP Goods

Sold by

The BAP Goods

Returns

Eligible for Return, Refund or Replacement within 30 days of receipt

Returns

Eligible for Return, Refund or Replacement within 30 days of receipt

This item can be returned in its original condition for a full refund or replacement within 30 days of receipt.

Read full return policy

Payment

Secure transaction

Payment

Secure transaction

We work hard to protect your security and privacy. Our payment security system encrypts your information during transmission. We don’t share your credit card details with third-party sellers, and we don’t sell your information to others. Learn more

Details

Add a gift receipt for easy returns

Get Fast, Free Shipping with Amazon Prime

FREE delivery Thursday, January 11 on orders shipped by Amazon over $35

Select delivery location

Used: Good | Details

Sold by DDV Sales and Resources LLC

Fulfilled by Amazon

Access codes and supplements are not guaranteed with used items.

Other Sellers on Amazon

Added

Not added

$16.66
FREE Shipping on orders over $35.00 shipped by Amazon.

Sold by: bestbuy76

Added

Not added

$16.66
FREE Shipping on orders over $35.00 shipped by Amazon.

Sold by: Arizy

Added

Not added

$22.04
FREE Shipping on orders over $35.00 shipped by Amazon.

Sold by: Amazon.com

James Rickards

+ Follow

More books from this author

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial CrisisMerchant Video

Image Unavailable

Image not available for
Color:

To view this video download Flash Player

2 VIDEOS

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis Hardcover – November 15, 2016

by James Rickards (Author)

4.5 1,541 ratings

See all formats and editions

Great on Kindle

Great Experience. Great Value.

Enjoy a great reading experience when you buy the Kindle edition of this book. Learn more about Great on Kindle, available in select categories.

View Kindle Edition

{"desktop_buybox_group_1":[{"displayPrice":"$16.66","priceAmount":16.66,"currencySymbol":"$","integerValue":"16","decimalSeparator":".","fractionalValue":"66","symbolPosition":"left","hasSpace":false,"showFractionalPartIfEmpty":true,"offerListingId":"k3NtD2Xh%2B4jW%2F2RSyTyr3EQfCyXxpVapMYFYqN5d5C2DnLR46uKnh5FWcMaP62AgBGd4Dv9iyDjOvXSB8zWNPW8dBJuWgW%2FLKSt46pYor%2F6ncGB0Qfd2bVqbJ9mebw%2FGCrsCODEX7nR5NXjIY7MqHxjYwovDB%2FzYcAD0bwrB7VPt%2BYtWwQM3%2F24jsAfYn1VF","locale":"en-US","buyingOptionType":"NEW","aapiBuyingOptionIndex":0}, {"displayPrice":"$10.00","priceAmount":10.00,"currencySymbol":"$","integerValue":"10","decimalSeparator":".","fractionalValue":"00","symbolPosition":"left","hasSpace":false,"showFractionalPartIfEmpty":true,"offerListingId":"k3NtD2Xh%2B4jW%2F2RSyTyr3EQfCyXxpVapcrzKPZc5akSoSkEhbkAmxXizV%2FDqm1z6hB6XWPliGS7jdHrIdvaEMvC6c36ekbzDWm6CVPg60nAIMQR5I%2FbD01XRfyZqn0B%2BGLBvPOC1U6IccO57mwdl%2Fkvx%2BUaGGOyT%2BDi5a6TKqn6272Wq%2F9Xo%2BYmqY4m%2BL8AP","locale":"en-US","buyingOptionType":"USED","aapiBuyingOptionIndex":1}]}

Purchase options and add-ons

The bestselling author of The Death of Money and Currency Wars reveals the global elites' dark effort to hide a coming catastrophe from investors in The Road to Ruin, now a National Bestseller.

A drumbeat is sounding among the global elites. The signs of a worldwide financial meltdown are unmistakable. This time, the elites have an audacious plan to protect themselves from the fallout: hoarding cash now and locking down the global financial system when a crisis hits.

Since 2014, international monetary agencies have been issuing warnings to a small group of finance ministers, banks, and private equity funds: the U.S. government’s cowardly choices not to prosecute J.P. Morgan and its ilk, and to bloat the economy with a $4 trillion injection of easy credit, are driving us headlong toward a cliff.

As Rickards shows in this frightening, meticulously researched book, governments around the world have no compunction about conspiring against their citizens. They will have stockpiled hard assets when stock exchanges are closed, ATMs shut down, money market funds frozen, asset managers instructed not to sell securities, negative interest rates imposed, and cash withdrawals denied.

If you want to plan for the risks ahead, you will need Rickards’s cutting-edge synthesis of behavioral economics, history, and complexity theory. It’s a guidebook to thinking smarter, acting faster, and living with the comforting knowledge that your wealth is secure.

The global elites don’t want this book to exist. Their plan to herd us like sheep to the slaughter when a global crisis erupts—and, of course, to maintain their wealth—works only if we remain complacent and unaware. Thanks to The Road to Ruin, we don’t need to be.

"If you are curious about what the financial Götterdämmerung might look like you’ve certainly come to the right place... Rickards believes -- and provides tantalizing snippets of private conversations with those who dwell in the very eye-in-the-pyramid -- that the current world monetary and financial system is on the verge of insolvency and that the world financial elites already have a successor system for which they are laying the groundwork."
--Ralph Benko, Forbes

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 Times, Evening Standard, The Telegraph, New 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.

Follow @JamesGRickards.

Excerpt. © Reprinted by permission. All rights reserved.

Chapter 1

This Is the End

Nice, nice, very nice- So many different people In the same device.

From Cat's Cradle, a novel by Kurt Vonnegut, 1963

The Conversation

Aureole is an elegant, high-ceilinged restaurant of sleek modern design on West Forty-second Street in Manhattan. It sits midway between tourist throngs in Times Square and Bryant Park's greenery. The neoclassical New York Public Library, whose entrance is attended by the twin marble lions, Patience and Fortitude, looms nearby.

I was there on a pleasant evening in June 2014 with three companions at a window table. We arrived at Aureole after a short walk from the library lecture hall where I had earlier delivered a talk on international finance.

The library offered free access to the lecture. Free access to any event in New York City guarantees an eclectic audience, more diverse than my typical institutional presentation. One gentleman in attendance wore an orange suit, bow tie, sunglasses, and lime-green derby hat. He was seated in the front row. His appearance did not raise an eyebrow.

New Yorkers are not only bold dressers, they're typically astute. In the question-and-answer session after the lecture, one listener raised his hand and said, "I agree with your warnings about systemic risk, but I'm stuck in a company 401(k). My only options are equities and money market funds. What should I do?" My initial advice was "Quit your job."

Then I said, "Seriously, move from equities to half cash. That leaves you some upside with lower volatility, and you'll have optionality as visibility improves." That was all he could do. As I gave the advice, I realized millions of Americans were stuck in the same stock market trap.

At Aureole, it was time to relax. The crowd was the usual midtown mix of moguls and models. I was with three brilliant women. To my left was Christina Polischuk, retired top adviser to Barclays Global Investors. Barclays was one of the world's largest asset managers before being acquired by BlackRock in 2009. That acquisition put BlackRock in a league of its own, on its way to $5 trillion of assets under management, larger than the GDP of Germany.

Across the table was my daughter, Ali. She had just launched her own business as a digital media consultant after four years advising Hollywood A-list celebrities. I was among her first clients. She brought millennial savvy to my lecture style with good success.

To my right was one of the most powerful, yet private, women in finance; consigliere to BlackRock CEO Larry Fink. She was BlackRock's point person on government efforts to suppress the financial system following the 2008 meltdown. When the government came knocking on BlackRock's door, she answered.

Over a bottle of white Burgundy, we conversed about old times, mutual friends, and the crowd at the lecture. I had addressed the audience on complexity theory and hard data that showed the financial system moving toward collapse. My friend on the right didn't need any lectures on systemic risk; she stood at the crossroads of contagion in her role at BlackRock.

Under Larry Fink's direction, BlackRock emerged over the past twenty-five years as the most powerful force in asset management. BlackRock manages separate accounts for the world's largest institutions as well as mutual funds and other investment vehicles for investors of all sizes. It sponsors billions of dollars of exchange-traded funds, ETFs, through its iShares platform.

Acquisitions engineered by Fink including State Street Research, Merrill Lynch Investment Management, and Barclays Global Investors, combined with internal growth and new products, pushed BlackRock to the top of the heap among asset managers. BlackRock's $5 trillion of assets were spread across equities, fixed income, commodities, foreign exchange, and derivatives in markets on five continents. No other asset management firm has its sheer size and breadth. BlackRock was the new financial Leviathan.

Fink is obsessively driven by asset growth, and the financial power that comes with it. He typically rises early, devours news, keeps a grueling schedule punctuated by power lunches and dinners, and is asleep by 10:30 p.m., ready to do it all again the next day. When he's not shuttling between his east side Manhattan apartment and his midtown office, Fink can be found on the global power elite circuit including Davos in January, IMF meetings in April, St. Petersburg, Russia, in June for "white nights," and so on around the calendar and around the globe, meeting with clients, heads of state, central bankers, and other lesser-known yet quietly powerful figures.

Such power does not go unnoticed in Washington. The U.S. government operates like the Black Hand, a Mafia predecessor portrayed in The Godfather Part II. If you pay protection money in the form of campaign contributions, make donations to the right foundations, hire the right consultants, lawyers, and lobbyists, and don't oppose the government agenda, you are left alone to operate your business.

If you fail to pay protection, Washington will break your windows as a warning. In twenty-first-century America, government breaks your windows with politically motivated prosecutions on tax, fraud, or antitrust charges. If you still don't fall into line, the government returns to burn down your store.

The Obama administration raised the art of political prosecution to a height not seen since 1934, when the Roosevelt administration sought the indictment of Andrew Mellon, a distinguished former secretary of the treasury. Mellon's only crimes were being rich and a vocal opponent of FDR. He was eventually acquitted of all charges. Still, a political prosecution played well among FDR's left-wing cohort.

Jamie Dimon, CEO of JPMorgan Chase, learned this lesson the hard way when he publicly criticized Obama's bank regulatory policy in 2012. Over the course of the next two years, JPMorgan paid more than $30 billion in fines, penalties, and compliance costs to settle a host of criminal and civil fraud charges brought by the Obama Justice Department and regulatory agencies. The Obama administration knew that attacking institutions was more remunerative than attacking individuals as FDR had done. Under this new Black Hand, stockholders paid the costs, and CEOs got to keep their jobs provided they remained mute.

Fink played the political game more astutely than Dimon. As Fortune magazine reported, "Fink . . . is a strong Democrat . . . and has often been rumored as set to take a big administration job, such as Secretary of the Treasury." Fink had so far managed to avoid the attacks that plagued his rivals.

Now Fink confronted a threat greater than targeted prosecutions and West Wing animus. The threat involved the White House, but emanated from the highest levels of the IMF and the G20 club of major economic powers. This threat has an anodyne name intended to confuse nonexperts. The name is G-SIFI, which stands for "globally systemic important financial institution." In plain English, G-SIFI means "too big to fail." If your company is on the G-SIFI list, it will be propped up by governments because a failure topples the global financial system. That list went beyond large national banks into a stratosphere of super-size players who dominated global finance. G-SIFI even went beyond too big to fail. G-SIFI was a list of entities that were too big to leave alone. The G20 and IMF did not just want to watch the G-SIFIs. They wanted to control them.

Each major country has its own sublists of SIFIs, and systemically important banks (SIBs) that are also too big to fail. In the United States, these banks include JPMorgan, Citibank, and some lesser-known entities such as the Bank of New York, the clearing nerve center for the U.S. treasury market.

I knew this background when I sat down to dinner that evening. The latest development was that governments were now moving beyond banks to include nonbank financial companies in their net.

Some nonbank targets were easy prey, including insurance giant AIG, which almost destroyed the financial system in 2008, and General Electric, whose credit operations were unable to roll over their commercial paper in the panic that year. It was the General Electric freeze, more than Wall Street bank failures, that most panicked Ben Bernanke, Federal Reserve chairman at the time. The General Electric credit collapse spread contagion to all of corporate America, which led directly to government guarantees of all bank deposits, money market funds, and corporate commercial paper. The General Electric meltdown was a white-knuckle moment that governments resolved never to repeat.

Once GE and AIG were swept in, the issue was how far to cast the nonbank net. Prudential Insurance was snared next. Governments were moving to control not just banks and large corporations, but the world's biggest asset managers as well. MetLife Insurance was next on the hit list; BlackRock was directly in the crosshairs.

I asked my dinner companion, "How's this whole SIFI thing going? You must have your hands full."

Her reply startled me. "It's worse than you think," she said.

I was aware of the government's efforts to put BlackRock in the nonbank SIFI category. A behind-the-scenes struggle by BlackRock management to avoid the designation had been going on for months. BlackRock's case was straightforward. They argued they were an asset manager, not a bank. Asset managers don't fail; their clients do.

BlackRock insisted size itself was not a problem. The assets under management belonged to the clients, not to BlackRock. In effect, they argued BlackRock was just a hired hand for its institutional clients, and not important in its own right.

Fink argued that systemic risk was in banks, not BlackRock. Banks borrow money on a short-term basis from depositors and other banks, then loan the funds out for a longer term as mortgages or commercial loans. This asset-liability maturity mismatch leaves banks vulnerable if the short-term lenders want their money back in a panic. Long-term assets cannot be liquidated quickly without a fire sale.

Modern financial technology made the problem worse because derivatives allowed the asset-liability mismatch to be more highly leveraged, and spread among more counterparties in hard-to-find ways. When panic strikes, even central banks willing to act as lenders of last resort cannot easily untangle the web of transactions in time to avoid a domino-style crash of one bank after another. All of this was amply demonstrated in the Panic of 2008, and even earlier in the collapse of hedge fund Long-Term Capital Management in 1998.

BlackRock had none of these problems. It was an asset manager, pure and simple. Clients entrusted it with assets to invest. There was no liability on the other side of the balance sheet. BlackRock did not need depositors or money market funds to finance its operations. BlackRock did not act as principal in exotic off-balance-sheet derivatives to leverage its client assets.

A client hired BlackRock, gave it assets under an advisory agreement, and paid a fee for the advice. In theory, the worst that could happen to BlackRock is it might lose clients or receive fewer fees. Its stock price might decline. Still, BlackRock could not suffer a classic run on the bank because it did not rely on short-term funding to conduct its operations, and it was not highly leveraged. BlackRock was different from a bank, and safer.

I said, "Well, I know what the government is doing. They realize you're not a bank and don't have funding risk. They just want information. They want you on the nonbank SIFI list so they can come in, poke around, look at your investments, and report the information to Treasury in a crisis. They'll combine that with information from other sources. The information gives them the big picture if they need to put out a fire. It's a pain, and it's expensive, but you can do it. It's just another compliance cost."

My friend leaned in, lowered her voice, and said, "No, it's not that. We can live with that. They want to tell us we can't sell."

"What?" I replied. I heard her well enough, but the implication of what she said was striking.

"In a crisis, they want to pick up the phone and order us not to sell securities. Just freeze us in place. I was in Washington last week on this and I'm going back next week for more meetings. You know it's not really about us, it's about our clients."

I was shocked. I should not have been. BlackRock was an obvious choke point in the global flow of funds. The fact that regulators might order banks to behave in certain ways was not surprising. Regulators can close banks almost at will. Bank management knows that in a match with regulators, the bank will always lose, so they go along with government orders. But government had no obvious legal leverage over asset managers like BlackRock.

Yet the flow of funds through BlackRock on a daily basis was enormous. BlackRock was a strategic choke point like the Strait of Hormuz. If you stop the flow of oil through the Strait of Hormuz, the global economy grinds to a halt. Likewise, if you stop transactions at BlackRock, global markets grind to a halt.

In a financial panic, everyone wants his money back. Investors believe stocks, bonds, and money market funds can be turned into money with a few clicks at an online broker. In a panic, that's not necessarily true. At best, values are crashing and "money" disappears before your eyes. At worst, funds suspend redemptions and brokers shut off their systems.

Broadly speaking, there are two ways for policymakers to respond when everyone wants his money back. The first is to make money readily available, printing as much as necessary to satisfy the demand. This is the classic central bank function as the lender of last resort, more aptly called printer of last resort.

The second approach is to just say no; to lock down or freeze the system. A lockdown involves closing banks, shutting exchanges, and ordering asset managers not to sell. In the Panic of 2008, governments pursued the first option. Central Banks printed money and passed it around to reliquefy markets and prop up asset prices.

Now it looked like governments were anticipating the next panic by preparing the second approach. In the next panic, government will say, in effect, "No, you can't have your money. The system is closed. Let us sort things out, and we'll get back to you."

Money locked down at BlackRock is not their money, it's their clients'. BlackRock manages funds for the largest institutions in the world such as CIC, the Chinese sovereign wealth fund, and CALPERS, the pension fund for government employees in California. A freeze on BlackRock means you are freezing sales by China, California, and other jurisdictions around the world. The U.S. government has no authority to tell China not to sell securities. But because China entrusts assets to BlackRock, the government would use its power over BlackRock to freeze the Chinese. The Chinese would be the last to know.

By controlling one financial choke point-BlackRock-the U.S. government controls the assets of major investors normally beyond its jurisdiction. Freezing BlackRock was an audacious plan, obviously one the government could not discuss openly. Thanks to my dinner companion, the plan had become crystal clear.

Print length

352 pages
Language

English
Publisher

Portfolio
Publication date

November 15, 2016
Dimensions

6.17 x 1.14 x 9.28 inches
ISBN-10

1591848083
ISBN-13

978-1591848080
See all details

Frequently bought together

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis

$16.66

Get it as soon as Friday, Jan 12

Only 1 left in stock - order soon.

Sold by The BAP Goods and ships from Amazon Fulfillment.

+

Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos

$12.53

Get it Jan 11 - 12

Only 1 left in stock - order soon.

Ships from and sold by Titanium Store.

+

The New Great Depression: Winners and Losers in a Post-Pandemic World

$17.51

Get it as soon as Thursday, Jan 11

Only 1 left in stock - order soon.

Sold by HORIZON EXPRESS and ships from Amazon Fulfillment.

Total price:

To see our price, add these items to your cart.

Try again!

Details

Added to Cart

These items are shipped from and sold by different sellers.

Show details Hide details

Choose items to buy together.

James Rickards
1,836
Paperback
143 offers from $1.35
Ray Dalio
7,147
Hardcover
93 offers from $11.15
Nassim Nicholas Nicholas Taleb
7,165
Paperback
71 offers from $6.43
Victor Davis Hanson
4,092
Hardcover
73 offers from $7.02
Edward Chancellor
550
Hardcover
in Financial Interest
53 offers from $18.00
Brandon Turner
8,006
Paperback
in Buying & Selling Homes
82 offers from $7.98

Product details

Publisher ‏ : ‎ Portfolio (November 15, 2016)
Language ‏ : ‎ English
Hardcover ‏ : ‎ 352 pages
ISBN-10 ‏ : ‎ 1591848083
ISBN-13 ‏ : ‎ 978-1591848080
Item Weight ‏ : ‎ 1.21 pounds
Dimensions ‏ : ‎ 6.17 x 1.14 x 9.28 inches

Best Sellers Rank: #326,844 in Books (See Top 100 in Books)
- #192 in Money & Monetary Policy (Books)
- #226 in International Economics (Books)
- #487 in Economic Conditions (Books)

Customer Reviews:
4.5 1,541 ratings

Brief content visible, double tap to read full content.

Full content visible, double tap to read brief content.

Important information

To report an issue with this product or seller, click here.

About the author

Follow authors to get new release updates, plus improved recommendations.

James Rickards

Brief content visible, double tap to read full content.

Full content visible, double tap to read brief content.

James Rickards is the Editor of Strategic Intelligence, a financial newsletter, and Director of The James Rickards Project, an inquiry into the complex dynamics of geopolitics + global capital. He is the author of The New Case for Gold (April 2016), and two New York Times best sellers, The Death of Money (2014), and Currency Wars (2011) from Penguin Random House. He is a portfolio manager, lawyer, 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 Times, Evening Standard, New York Times, and Washington Post, and has been interviewed on BBC, CNN, NPR, C- SPAN, CNBC, Bloomberg, Fox, and The Wall Street Journal. Mr. Rickards is a guest lecturer in globalization and finance at The Johns Hopkins University, The Kellogg School at Northwestern, and the School of Advanced International Studies. He has delivered 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 Center on Sanctions & Illicit Finance 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.

Customer reviews

4.5 out of 5

1,541 global ratings

How customer reviews and ratings work

Reviews with images

See all photos

Sort reviews by

Top reviews from the United States

There was a problem filtering reviews right now. Please try again later.

Julian Talbot

Essential advance reading for investors as well as risk and finance professionals

Reviewed in the United States on July 12, 2017

Verified Purchase

I can't say I agree with all the conclusions but the research is sound and the material is very thought provoking. As a risk management professional I particularly appreciated his understanding of risk management, complexity theory and related concepts. James Rickards mixes his personal experience and anecdotes with sound science and research to provide a picture of modern finance and global economies which is rare.

He talks about risk in the broadest possible sense and in real world scenarios which is particularly helpful and gets to the heart of some of our systemic issues. For example: "The failing of prevailing risk models is that complex systems behave in a completely different manner from equilibrium systems. This is why central bank and Wall Street equilibrium models produce consistently weak results in forecasting and risk management."

He also argues a good case for the use of complexity theory and Bayesian analysis. Some of the text can be a bit dense if you're not used to this sort of thing but the information is all there. You may just want to re-read the odd section if it is all new to you but if not, just persevere and the material links back to itself as the book progresses. An example: "Complexity Bayesian technique is not a science in itself, it’s an applied mathematical tool with robust predictive properties. The prime science of capital markets is complexity theory. Capital markets are complex systems, yet complexity is little understood and even less used in financial economics. From the 1998 global liquidity crisis, to the 2000 tech bubble collapse, to the 2008 panic, policymakers have led the world into one crash after another. Their failure to use complexity theory explains why. The case for complexity theory is straightforward. It’s not difficult to grasp. Investors must grasp it now if they wish to preserve wealth." He does take the time to explain all of these concepts by the way, so don't be put off if the above isn't immediately helpful.

I quite like that he says what he is thinking and doesn't mince words: "When I left LTCM in 1999, I was dissatisfied with the standard explanations for my former firm’s collapse. Nobel Prize winners talked about the “perfect storm,” the “hundred-year flood,” and a “fifteen-standard-deviation event.” I knew enough about statistics to realize this was the language of normally distributed risk and mean reversion—the language of random walks and efficient markets. My intuition said there was something rotten at the heart of modern financial economics." He is quite right. Hundred year floods occur more frequently than every 100 years and 6-sigma events occur more frequently than statistical models predict. If I tell you that it's 99% sure to be sunny tomorrow and you complain to me when it rains, I will simply point out to you that a 1% chance of rain does not preclude it from raining. In complex systems such as stock markets or global politics, probabilities are even less helpful. The various parties are continually adapting to each others behaviours so nothing can be taken for granted (regrettably for organisations such as LTCM who rely on quantitative models).

One of his best insights, if you haven't clued into it already, is that the notion of 'value-at-risk' is fundamentally flawed in an interconnected world of derivatives. In the 21st century, we bundle loans to create securitised debt instruments, which are sold and the funds used to create more loans, bonds or collateralized debt. We also use stocks as the basis for futures, warrants, options, bonds and more. All of these can be used to offset other debt obligations, creating a notional amount of debt which in theory can all be mathematically offset to balance each other. But only in theory ... Rickards does a much better and more detailed job of explaining this in his book but in essence, $1 billion in cash or equities, can be leveraged again and again as the basis to create (for example) a $100 billion or more exposure of debt and other instruments. This is risky enough even if you could rely on everything to fall due at the same instant that a market crash occurs but in reality, nobody has a unified picture to be able to zero out all the transactions. One debt instrument can fall due days, weeks or months before the others and before anyone can even work out all the various counter-parties. By then, it's all a bit late and if even one of the counter-parties has fallen into bankruptcy, the chain is broken and the house of cards collapses. That's a crude oversimplification of how global financial crises unfold but if you read the book, you'll understand it in detail. Lest you think his book is all doom and gloom, Rickards has a few helpful suggestions on this and other issues.

Another strength of the book is the way he takes a centuries or even millennia long view of finance, politics, nations and family dynasties to step outside the prevailing short term focus of quarterly reports and 'the last crisis'.

As I mentioned at the start, I don't agree with all his conclusions, nor necessarily his interpretations of all the facts available but found it all informative and thought provoking. Original. Definitely worth a read. I've studied and worked in finance, investing and risk management for decades but still learned a lot from this book.

12 people found this helpful

Helpful

Mahatma Kane

A Very Important Book

Reviewed in the United States on November 22, 2016

Verified Purchase

As an economist and financial adviser, I was prepared to be highly critical of James Rickards' latest book. Instead, I found myself annotating it heavily and reread it immediately after finishing it. There may be a little more detail in some parts than the explication really needed, but I found myself nodding in agreement rather than shaking my head. It's not a conspiratorial book (as some reviewers have alleged). Rickards speaks of "elites," but as an amorphous group bound together by shared goals rather than as a dark organization dedicated to evil. His analysis of the Long Term Capital Management (LTCM) debacle is fascinating, since he was working there at the time. His discussion of complexity theory applied to financial markets is the best I've seen on the topic. His discussion of trade issues is particularly timely due to the recent presidential election.

The typical free trade policies have led to the gutting of US manufacturing, and the loss of the jobs on which the middle class used to depend. (Remember that working class white voters used to be the backbone of the Democratic Party!) If President Trump can shift our trade policies so that a certain amount of manufacturing returns to the US, he will have done generations of Americans a great favor. Rickards shows how so-called "free" trade really isn't free.

By far the most important part of the book is the case it makes for a coming financial panic. Rickards does not identify the precise cause, although he does say that the cause will be a liquidity crisis in one part of the financial market, which will spread to all other parts. He does lay out the reasons why he feels that such a crisis, exponentially larger than previous ones, is almost inevitable at this point. There is some general advice on tactics to protect yourself during such an event -- a process, really, since it would take years to work itself out. Other forms of self-protection are easily inferred from the analysis. All in all, I believe this is one of the most important financial books in years.

353 people found this helpful

Helpful

Josiah and Vanessa

A mostly phenomenal read

Reviewed in the United States on September 1, 2017

Verified Purchase

You could say I am a member of the 'system', I have my MBA with a focus in finance and I have my retirement portfolio rooted deeply in the equities market. When I began reading this book I was absolutely mesmerized by the author's firm grasp of history and eloquent writing style.

I was looking forward to giving it five stars for so prophetically portraying a possible demise of America as we know it today. Unfortunately I was very disappointed that the author took a massive detour to highlight perceived police brutality. I realize this is a sensitive issue with our society, but when I was on the ground at 2 am, January 1st of 2015, fighting a guy who had tried to assault me, you bet I sure loved the blue squad cars that delivered public servants who took over and arrested the social blight that tried to harm me. Now I live in western Alaska where police presence is decidedly less obvious than the lower 48. Walking on the boardwalk near my house two days ago I witnessed a huge blood spot on the walkway. People should try living in a locality with less law enforcement before they bash the thin blue line.

17 people found this helpful

Helpful

Top reviews from other countries

Translate all reviews to English

Zyppy

The road to ruin

Reviewed in Italy on October 26, 2022

Verified Purchase

Un viaggio per conoscere al meglio la nostra situazione economica vista dal punto di vista mondiale
Testo interamente in inglese ma di facile comprensione anche per neofiti

Translate review to English

Karen

Interessante

Reviewed in Brazil on September 28, 2020

Verified Purchase

Interessante a leitura e de fato condiz com muito o que está acontecendo atualmente na sociedade. Vale a pena.

4 people found this helpful

Translate review to English

Thierry davin

Hardcore but interesting book

Reviewed in Spain on December 15, 2021

Verified Purchase

I already read currency wars and it was much easier to read that this one. This book is much more technical and goes deeper but, at least for me, it is a much harder to understand and I had several times to read the same paragraph twice to get the full value.

Jan Wall

A Well Documented Story with an Inescapable Conclusion

Reviewed in Canada on July 29, 2017

Verified Purchase

Rickards puts his story togethet piece by piece. All the pieces fit together. The American economy will fail and, along with it, the American empire. But this failure is not orchestrated by an organized conspiracy. Rickards shows that the inevitable failure is driven by greed, the natural tendency of the elite to hang with the elite, and a nearly universal commitment to honoring economic models that are demonstrably wrong. The elite lives in a bubble and pulls the levers. Wealth is concentrated to an extent not seen for a thousand years. The world economy will fail because it is complex, fragile, and subject to cascading dynamics that can not always be foretold.

The fundamenral problem, as Rickards sees it, is a misalignment between economic realities and economic models. He illustrates that misalignment with dozens of concrete examples that are highly compelling.

One person found this helpful

Chris Grand

A must read

Reviewed in France on July 26, 2018

Verified Purchase

If You want to gain insight and look behind the scene of crashes and how world’s elite profit from it, this is a must read.
It’s a very precious out-view based on analysis of long term historical facts and chaos theory.
Very instructive book helping to gain financial literacy and build a crisis proof portfolio.
The author’s background gives strong emphasis to the credibility of his findings. This is insider information.
A little difficult to read sometimes due to choice of rather high quality choice of wording, at least for nonnatives.

See more reviews

Other Sellers on Amazon

Image Unavailable

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis Hardcover – November 15, 2016

Purchase options and add-ons

About the Author

Excerpt. © Reprinted by permission. All rights reserved.

Frequently bought together

Similar items that may ship from close to you

Product details

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis

Honest Review of The Road to Ruin

Customer Review: NEW LAWs for Financial System Lock-down

Important information

About the author

James Rickards

Customer reviews

Reviews with images

Sorry, there was an error

Top reviews from the United States

There was a problem filtering reviews right now. Please try again later.

Top reviews from other countries

Amazon Prime includes:

Buy new: $16.66$16.66 FREE delivery: Friday, Jan 12 on orders over $35.00 shipped by Amazon. Ships from: Amazon Sold by: The BAP Goods

Buy used: $10.00

Other Sellers on Amazon

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis Hardcover – November 15, 2016

Purchase options and add-ons

About the Author

Excerpt. © Reprinted by permission. All rights reserved.

Frequently bought together

Similar items that may ship from close to you

Product details

Videos for this product

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis

Honest Review of The Road to Ruin

Customer Review: NEW LAWs for Financial System Lock-down

Important information

About the author

James Rickards

Customer reviews

Reviews with images

Submit a report

Sorry, there was an error

Top reviews from the United States

There was a problem filtering reviews right now. Please try again later.

Top reviews from other countries

Buy new:

$16.66

FREE delivery: Friday, Jan 12 on orders over $35.00 shipped by Amazon.

Ships from: Amazon

Sold by: The BAP Goods

Buy used:

$10.00