READER · DOC Currency Wars The Making of the Next Global Crisis

James Rickards ↠ Currency Wars The Making of the Next Global Crisis EBOOK

READER · DOC Currency Wars The Making of the Next Global Crisis ¶ ☁ [PDF / Epub] ☀ Currency Wars The Making of the Next Global Crisis By James Rickards ✎ – Johns-cycling-diary.co.uk In 1971 President Nixon imposed national price controls and took the United States off the gold standard an extreIn 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 US dollar Today we are engaged in a new currency war and this time the conseuences will be far worse than those that confronted NixonCurrency 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 seuential 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 2008Currency wars have happened before twice in the last century alo If you’ve wondered about the secret to Currency Wars’ best selling success here’s a clue it’s essentially a monetary version of Left Behind for apocalyptic “end the fed” types fearful of an IMF led New World Order That’s less a reflection on the tone of James Rickards’ writing—though somewhat alarmist he’s a lawyer and finance professional not a Tim LaHaye like rapture peddler—than the worldviews his book will be used to support Apart from Rickards’ Twitter spat with Nouriel Roubini I have yet to see a serious argument put forward against this book While I’m hardly the person to offer a book length academic criticism there’s enough problematic material in Currency Wars for me to at least mention a few potential points for further argument and study in lieu of a thorough review of the entire bookRickards is an interesting guy He takes an interdisciplinary approach to his subject which as he’s stated in interviews is something that’s frowned upon by mainstream economists The problem is that this makes his pro gold argument seem better sourced than it actually is Rickards’ argument is an intellectually flashy one—complexity theory anyone?—but it’s as paper thin as the fiat money to which he’s opposed Rickards’ chapter on the classical gold standard era of 1870 to 1914 “Reflections on a Golden Age” is one of the most egregious examples of how deceptively ahistorical this book is“The period from 1870 to 1914 was a golden age in terms of noninflationary growth coupled with increasing wealth and productivity in the industrialized and commodity producing world” Rickards writes “Economists are nearly unanimous in pointing out the beneficial economic results of this period”So what of the free silver movement and multiple depressions and financial panics of the late 19th century and the economists who would cite them as evidence of a gold standard’s shortcomings? Rickards doesn’t even mention them let alone try to grapple with their possible implications Of course if he did then he wouldn’t be able to keep his argument tightly focused on his chosen culprit for monetary failures the Federal ReserveRickards’ blinkered examination of the causes of the financial crisis includes some gaping omissions and misleading statements For example in his list of the Fed’s failures he mentions Congress’ Financial Crisis Inuiry Commission of 2009 which “concluded that regulatory failure was a primary cause of the crisis and it laid that failure suarely at the feet of the Fed” So Congress pinned the tail on the Fed—shocking This would be the same Congress that passed the Financial Services Modernization Act and Commodity Futures Modernization Act You will search in vain for a reference to the FSMA in the index of Rickards’ book The best you’ll get is a mention of Phil Gramm Bill Clinton and the CFMA—on page 9 where Rickards is not building a thesis but establishing his bona fides as a Defense Department advisorIn some cases Rickards’ attempts to elide the culpability of Wall Street verge on the absurd Case in point“The European banks gorged not only on euro sovereign debt but also on debt issued by Fannie Mae and the full alphabet soup of fraudulent Wall Street structured products such as collateralized debt obligations or CDOs These debts were originated by inexperienced local bankers around the United States and repackaged in the billions of dollars by the likes of Lehman Brothers before they went bust”I just about shot milk out of my nose when I read that statement and I wasn’t even drinking milk Oh those inexperienced local bankers However did they fool the world’s savviest financial experts and ratings agencies? Only “the likes of” Lehman Brothers were fraudulent Not Goldman Sachs and other firms they were just too distracted with hookers and blow see Charles Ferguson’s film Inside Job and betting against the clients to whom they were selling “crap pools” as they called them in internal emails So no it wasn’t Wall Street greed or the fees that came with recklessly signing people up for deceptive subprime mortgages It was local bank inexperience Remedial economics courses for everyoneRickards was the general counsel and principal negotiator for Long Term Capital Management when they were bailed out in 1998 a bailout organized by the Federal Reserve Bank of New York and one that foreshadowed everything that’s going on now Does that make his argument against the Fed credible or less credible? I don’t know Maybe it just makes it cynicalThere’s an underlying ideology to Currency Wars that Rickards seldom exposes but when he does it’s revealing For example there’s the first sentence of his chapter on the G20 “The Group of Twenty known as G20 is an unaccountable and very powerful organization that arose from the need to resolve global issues in the absence of true world government”But only on the final page of the book does Rickards come right out and state why an alternative to the US dollar as the world’s dominant reserve currency is unwelcome “While all currencies by definition represent some store of value the dollar is different It is a store of economic value in a nation whose moral values are historically exceptional and therefore a light to the world The debasement of the dollar cannot proceed without the debasement of those values and that exceptionalism”So says every empire—and apparently so says Defense Department consultants who graduated from the Johns Hopkins school named after Paul Nitze the Cold Warrior described by Andrew Bacevich as “a master at hyping the Threat”If Rickards were familiar with world systems analysis he might have given greater attention not to the monetary policy of America’s central bank but to the cycles of capitalism itself and America’s place within them Instead Rickards uses his conclusion that the world financial system has become too complex to advocate some old right wing chestnuts “Other suggestions to reverse the impact of complexity include elimination of the corporate income tax simplification of the personal income tax and reductions in government spending When the risk of collapse is in the scale itself the first order benefits of government programs are dominated by the invisible second order costs Smaller is safer” Right Because it was the existence of a corporate income tax that made the banks too big to fail As Nicholas Shaxson writes in his 2011 book Treasure Islands Uncovering the Damage of Offshore Banking and Tax Havens “Nearly every multinational corporation uses tax havens and their largest users—by far—are on Wall Street”As a diagnostic of the Federal Reserve’s failures Currency Wars is interesting and most valuable when Rickards picks apart financial economics and risk assessment But as a prescriptive ie an argument for gold it’s highly dubious and Rickards is far too selective in the evidence provided for his arguments

MOBI ô Currency Wars The Making of the Next Global Crisis ↠ James Rickards

Ne 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 conflictAs James Rickards argues in Currency Wars this is 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 itselfBaffling to many observers is the rank failure of economists to foresee or preve I received this book for free in a Goodreads First Reads giveawayF Scott Fitzgerald once said The test of a first rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function If that is the case then James Rickards certainly has that intelligence because his book is constantly at war with itself to the point that this reviewer cannot recommend itWhen Rickards is addresses the specific issues of monetary policy both in terms of its use in domestic and international matters he is insightful and direct He presents a coherent and unsettling picture of the current predicament the US and world are in with an overleveraged system that is not suffering from a lack of liuidity but a lack of solvency The threat presented by a collapse of the dollar is both clear and present and the potential outcomes are disturbing These portions are valuable and educationalHowever when Rickards broadens his scope to other policy issues things fall apart Rickards' hard right libertarian worldview interferes with his reasoning providing nonsensical talking points unsupported by the examples provided For example Richards correctly cites the lack of regulation as being a key component to the banking crisis of 2008 Yet he also repeatedly states without any supporting evidence that government regulation is a bad thing and harmful to the economy Towards the end he even advocates specific banking regulation to avoid a repeat of the crisis of 2008 while simultaneously advocating for smaller government The cognitive dissonance is astounding In another case Richards notes that the highly inflationary policies of the Fed are destroying the value of the dollar while advocating significantly reduced tax rates However taxation without spending is a powerful tool the government can use to reduce the overall money supply providing a deflationary pressure to offset the inflationAs a third example Rickards attempts to refute Keynesian economics by borrowing from Taylor and Cogan's study of the Obama Administration's Stimulus Package having a net negative modifier effect In essence Keynes argues that a dollar spent by the government can have a multiplicative effect by that dollar being pushed into the economy and being used again by the original recipient while Taylor Cogan's study said that the actual benefit was less than the original dollar spent But when Taylor Cogan looked at individual portions of the package there was a much clearer effect Direct support programs like food stamps provided a significant positive multiplier benefit to the economy while the significantly negative effects were caused by the tax cuts in the package Thus the truth of Taylor Cogan's study is that the package cut taxes too much and directly spent too littleAnd that's pretty much enough to say about it There's valuable information for those who can read critically and see just how absurd some of Rickard's conclusions are but I wouldn't encourage reading this in hope of finding a better book without the counterproductive ideology

EPUB Currency Wars The Making of the Next Global Crisis

Currency Wars The Making of the Next Global CrisisNt 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 dilemmasWhile the outcome of the new currency war is not yet certain some version of the worst case scenario is almost inevitable if US 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 informed and effective course of acti This book is the blueprint to current events What is happening to the dollar? What is at risk in our fiscal relationship with China? With Europe? What are the implications of Obama's policy to double exports? How will we get out of this depression?It is most remarkable to read such a prescient book in the midst of what Rickards' calls the third currency war Many already familiar with how the Federal Reserve works with deficit spending and a general knowledge of stocks and bonds may not be familiar with the inner workings of currenciesRickards makes the case that there is much going on at the Fed and in the White House than simply printing money We are in the midst of a full scale currency war that if perpetuated can only lead to catastrophe While the Fed policies of uantitative easing raise fears of inflation at home this means world wide inflation a policy that will lead not only to resentment but countermeasures that will lead to greater conflictThis is an outstanding book and I believe most anyone would do well to become familiar with Rickards' argument My only criticism is that Rickards seems to have one foot in the hard money camp and the other in the central banking camp He explictly argues for a flexible 40% gold standard and does not seek to end the Fed I would be a bit uncomfortable with someone seemingly so pragmatic with the levers of power For example he seems too comfortable with the idea of the Treasury seizing foreign owned gold that is being stored in New York