Excellent new book "Currency Wars" by Jim Rickards [+ Video with the author inside]

[swissaustrian]

I highly recommend everyone to read the following book:
Jim Rickards - Currency Wars
http://us.penguingroup.com/static/covers/all/5/9/9781591844495H.jpg
Summary:

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.

http://us.penguingroup.com/nf/Book/BookDisplay/0,,9781591844495,00.html#

The author talked about his book with Max Keiser:

http://www.youtube.com/watch?v=h6hvjJeyZi0

[swissaustrian]

There is already a thread on the book, sorry I forgot to search for it:
http://www.ronpaulforums.com/showthread.php?331368-New-Currency-Wars-book-backs-up-everything-RP-has-been-saying-for-years&highlight=currency+wars

[Mogambo Guru]

Yes, i have that one on my wishlist!!

Did anyone else catch the twitter fight between Roubini and Rickards?? I thought it was funny.

[swissaustrian]

Yes, i have that one on my wishlist!!

Did anyone else catch the twitter fight between Roubini and Rickards?? I thought it was funny.
Read about it. Seems like Roubini criticised him without reading the book.

[ctb619]

Why don't European central banks repatriate their gold reserves? Does anyone have any figures for what percentage of each country's gold reserves that are held at the New York Fed?

[William R]

bump

[swissaustrian]

Why don't European central banks repatriate their gold reserves?
They even complain about Venezuela repatriating their gold. Imagine what happens when all the European countries start doing it.
Besides, I think that a lot of it has been leased out without any physical relocation. The main leasing markets are in New York (NY FED) and London (BOE).

[Becker]

No relation to the Chinese book, I'm sure.

[Steven Douglas]

I just bought the book on for the Kindle. I'm not ten pages into it and I'm already questioning. I have no doubt that Rickards was part of the recent currency war games hosted by the Pentagon. That part doesn't surprise me. What raises my eyebrows is the fact that he seems able to talking about it all so openly.

What does that tell me:

1) There is no way that I could ever be convinced that Rickards just showed up, participated in a Pentagon financial war game simulation, and left, with no discussion whatsoever on national security, as he is as free to talk about it as a "secret shopper" for Walmart who relates the experience to friends and family over dinner. He goes into great detail about all the security measures involved (but then talks about meetings outside over drinks to discuss everything). Rickards was released from at least some secrecy obligations, which would have been imposed by the Pentagon prior to his involvement in any exercise.

2) Rickards talks specifics about what happened in the war game simulations. The Pentagon/government would not have allowed this neutrally. The only information that is allowed to be "freely leaked" is that which it deems to its own strategic advantage. If Rickards was given leave to discuss it openly, at least part of what he talks about in his book is information our government wanted out there. Possibly even negotiated (i.e., "Make the following point(s), leave these points out, and the rest of the content is yours to freely discuss.") It could have been just one thing, or a checklist of major points. What, and why?

Technically it makes Rickards a propaganda mouthpiece. Not necessarily a mis/disinformation puppet, I don't necessarily believe that, but his words could be seen as serving a useful purpose; a show of force, or sabre-rattling by proxy, given the relative strength of the US hand. It could serve as a reminder warning to others - government, international bankers, etc., - of not only what they have at stake, but the likelihood of possible scenarios that could cause them to lose. In other words, not a direct threat - just observations on the part of one person. For example, Rickards discusses Germany's gold that held by New York banks, and the possibility that it could be confiscated in the event that things got truly ugly.

Anyway, so far a fascinating read. I am glad I bought it, and I am sure that I will learn a lot from it. But the ad hominem motives detector in throwing out flags everywhere.

[swissaustrian]

I just bought the book on for the Kindle. I'm not ten pages into it and I'm already questioning. I have no doubt that Rickards was part of the recent currency war games hosted by the Pentagon. That part doesn't surprise me. What raises my eyebrows is the fact that he seems able to talking about it all so openly.

What does that tell me:

1) There is no way that I could ever be convinced that Rickards just showed up, participated in a Pentagon financial war game simulation, and left, with no discussion whatsoever on national security, as he is as free to talk about it as a "secret shopper" for Walmart who relates the experience to friends and family over dinner. He goes into great detail about all the security measures involved (but then talks about meetings outside over drinks to discuss everything). Rickards was released from at least some secrecy obligations, which would have been imposed by the Pentagon prior to his involvement in any exercise.

2) Rickards talks specifics about what happened in the war game simulations. The Pentagon/government would not have allowed this neutrally. The only information that is allowed to be "freely leaked" is that which it deems to its own strategic advantage. If Rickards was given leave to discuss it openly, at least part of what he talks about in his book is information our government wanted out there. Possibly even negotiated (i.e., "Make the following point(s), leave these points out, and the rest of the content is yours to freely discuss.") It could have been just one thing, or a checklist of major points. What, and why?

Technically it makes Rickards a propaganda mouthpiece. Not necessarily a mis/disinformation puppet, I don't necessarily believe that, but his words could be seen as serving a useful purpose; a show of force, or sabre-rattling by proxy, given the relative strength of the US hand. It could serve as a reminder warning to others - government, international bankers, etc., - of not only what they have at stake, but the likelihood of possible scenarios that could cause them to lose. In other words, not a direct threat - just observations on the part of one person. For example, Rickards discusses Germany's gold that held by New York banks, and the possibility that it could be confiscated in the event that things got truly ugly.

Anyway, so far a fascinating read. I am glad I bought it, and I am sure that I will learn a lot from it. But the ad hominem motives detector in throwing out flags everywhere.
Great observations + rep.

I think he wants to send out a few messages to different groups:
1.) To the US gov and intellectual elite: wake up if you haven´t already!
2.) To foreign governments: we know what you´re up to and we are preparing ourselves. This is the part of the book which has to be coordinated with US officials, as you already pointed out. It´s clearly visable that the BRICS are preparing some kind of alternative to the dollar. The message out of the first two chapters is: we are watching you and we are holding YOUR gold!
3.) To ordinary people: Protect yourself by buying gold.

With regards to the ad hominem attacks. This seems to be part of the wake up call to US elites. These Harvard and Rand Corporation guys on Rickard´s war game team seemed to be totally unaware of the threat to the dollar.

[Seraphim]

^^ Yes....in his interview I was questioning WHY he is "allowed" to say such things.

[swissaustrian]

Even Rick Perry has read this book:
Sorry about the music in the video.


http://www.youtube.com/watch?v=6yrW3u3-KQM

[Cowlesy]

I've listened to some of Rickards' interviews, and for the most part I agreement with his long-run strategic assessments.

Here is my problem. There have been people saying the exact same things since the 1980's. I am not saying that as a "knock" against them, but although in the long run while I think they may be proven right, we are also all dead in the long run. It may take 30 years until we really just buckle, it may be 10, or 50, or 25...no one really knows for sure.

So what does one do? Well in the mean time, you can grow your networth through a variety of ways. It all really comes down to your comfort levels with risk. MF Global folding and missing customer funds should be a wakeup call to everyone who uses a small to midsize broker; now while they were a commodities broker primarily, a lot of their controls should have been similar to any big brokerage firm.

That being said, I am comfortable with the risk I take with using my broker. Requesting stock certificates to me is just plain silly. One, it'll take weeks for you to get them, and two, they'll charge you a ton in fees to take physical delivery of certificates which, then, you are pretty much stuck with until you decide to redeem them (I don't even know what the process would be to go about doing so).

It's like taking physical delivery of your gold. I think it is a *smart* thing to own some physical, but storing it all in a vault in your house, or the bank, both options entail risk. There is the risk of burglary from both, just like the MF Global account. Your house could burn down which I guess might leave you with a molten glob of gold if your safe wasn't fireproof.

I guess I just worry people will invest solely based on Rickards' prognostication of $9,000 gold, and perhaps miss all sorts of opportunities of entrepreneurs and businesses growing earnings. We may well have $9,000 gold in 2015, but also maybe 2080. I am not going to care in 2080. :P

[ctiger2]

I guess I just worry people will invest solely based on Rickards' prognostication of $9,000 gold, and perhaps miss all sorts of opportunities of entrepreneurs and businesses growing earnings. We may well have $9,000 gold in 2015, but also maybe 2080. I am not going to care in 2080. :P

Well, one shouldn't be "investing" buying Gold as a means to increase networth anyhow. Buying Gold is to preserve purchasing power. According to Martin Armstrong (http://www.martinarmstrong.org/economic_projections.htm) we're going to get a new monetary system 2015.75. So, we have a ways to go, but it's def not gonna be 2080 before there's a new system which more than likely includes Gold in some form.


Armstrong was named Economist of the decade for the ‘80s by Equity Magazine after correctly forecasting the peak in interest rates 1981.35, gold to the day January 21, 1980, forecast of the Dow would rise from 1000 to 6000, end of deflation 1985, takeover boom, the 1987 Stock Market Crash, and the bubble top in Japan 1989.95.

[Cowlesy]

Well, one shouldn't be "investing" buying Gold as a means to increase networth anyhow.

Yes, I was using the term "investing" loosely. Gold is a means of protecting wealth as a hedge against inflation yadda yadda, my point was about risk, that a person needs to get comfortable with the amount of risk they wish to take on, and that almost any type of investing (or hedging or protection) involves a level of risk.

A lot of investors do a terrible job of managing their risk profile. People who shouldn't make concentration plays do so, or put all their eggs in one basket, or miss big opportunities because they're so focused on the someday impending collapse of civilization, which may not even happen in their lifetime!

[swissaustrian]

I've listened to some of Rickards' interviews, and for the most part I agreement with his long-run strategic assessments.

Here is my problem. There have been people saying the exact same things since the 1980's. I am not saying that as a "knock" against them, but although in the long run while I think they may be proven right, we are also all dead in the long run. It may take 30 years until we really just buckle, it may be 10, or 50, or 25...no one really knows for sure.

So what does one do? Well in the mean time, you can grow your networth through a variety of ways. It all really comes down to your comfort levels with risk. MF Global folding and missing customer funds should be a wakeup call to everyone who uses a small to midsize broker; now while they were a commodities broker primarily, a lot of their controls should have been similar to any big brokerage firm.

That being said, I am comfortable with the risk I take with using my broker. Requesting stock certificates to me is just plain silly. One, it'll take weeks for you to get them, and two, they'll charge you a ton in fees to take physical delivery of certificates which, then, you are pretty much stuck with until you decide to redeem them (I don't even know what the process would be to go about doing so).

It's like taking physical delivery of your gold. I think it is a *smart* thing to own some physical, but storing it all in a vault in your house, or the bank, both options entail risk. There is the risk of burglary from both, just like the MF Global account. Your house could burn down which I guess might leave you with a molten glob of gold if your safe wasn't fireproof.

I guess I just worry people will invest solely based on Rickards' prognostication of $9,000 gold, and perhaps miss all sorts of opportunities of entrepreneurs and businesses growing earnings. We may well have $9,000 gold in 2015, but also maybe 2080. I am not going to care in 2080. :P

With regards to the stock certificates: I don´t know what it costs to do this with American brokerages, but over here in Switzerland you pay arround 200 USD for each position. That´s not overly expensive if you have a reasonable stock portfolio. It did this with some of my positions and it didn´t take long at all (~ 1 week). My point in the other thread was anyway to make sure that your broker wasn´t owning your shares, meaning him beeing the owner and you only having a claim against him. This doesn´t necessarily mean that you have to take physical delivery of the certs. It might just require a registration process as described here: http://www.ronpaulforums.com/showthread.php?336434-To-all-RPF-stockholders-Make-sure-your-stock-holdings-are-INDIVIDUALLY-REGISTERED&p=3830544&viewfull=1#post3830544
Imho this isn´t a matter of size of the brokerage either. The really big banks use something even worse: dark pooling.

With regards to PM storage: There is a third choice besides bank and home safes. There are plenty of independent companies which offer storage services. They don´t have the risk of bank holidays and seizures. In fact, some of them offer 24/7 access.

Rickards' prognostication of $9,000 gold: I´m not sure where you got that from. It´s definitely not in the book. He offers some numbers based on calculations referencing different US / ECB / China money supplies (M1, M2). The numbers range from 3'300 to 44'000. His favourable number is 7'500.

[milo10]

I just bought the book on for the Kindle. I'm not ten pages into it and I'm already questioning. I have no doubt that Rickards was part of the recent currency war games hosted by the Pentagon. That part doesn't surprise me. What raises my eyebrows is the fact that he seems able to talking about it all so openly.

What does that tell me:

1) There is no way that I could ever be convinced that Rickards just showed up, participated in a Pentagon financial war game simulation, and left, with no discussion whatsoever on national security, as he is as free to talk about it as a "secret shopper" for Walmart who relates the experience to friends and family over dinner. He goes into great detail about all the security measures involved (but then talks about meetings outside over drinks to discuss everything). Rickards was released from at least some secrecy obligations, which would have been imposed by the Pentagon prior to his involvement in any exercise.

2) Rickards talks specifics about what happened in the war game simulations. The Pentagon/government would not have allowed this neutrally. The only information that is allowed to be "freely leaked" is that which it deems to its own strategic advantage. If Rickards was given leave to discuss it openly, at least part of what he talks about in his book is information our government wanted out there. Possibly even negotiated (i.e., "Make the following point(s), leave these points out, and the rest of the content is yours to freely discuss.") It could have been just one thing, or a checklist of major points. What, and why?

Technically it makes Rickards a propaganda mouthpiece. Not necessarily a mis/disinformation puppet, I don't necessarily believe that, but his words could be seen as serving a useful purpose; a show of force, or sabre-rattling by proxy, given the relative strength of the US hand. It could serve as a reminder warning to others - government, international bankers, etc., - of not only what they have at stake, but the likelihood of possible scenarios that could cause them to lose. In other words, not a direct threat - just observations on the part of one person. For example, Rickards discusses Germany's gold that held by New York banks, and the possibility that it could be confiscated in the event that things got truly ugly.

Anyway, so far a fascinating read. I am glad I bought it, and I am sure that I will learn a lot from it. But the ad hominem motives detector in throwing out flags everywhere.

I haven't read the book, but probably listened to a couple of dozen interviews of his. He's a really fascinating analyst. There is also a long video presentation here that he gives Pentagon officials:

http://vimeo.com/18160394

It's interesting because their interest and reactions to his points are similar to what ours would be.

The government is not a monolith, and I know there must be a lot of well-intentioned people in the military who like Jim and want his message to get out for the right reasons. If your career is America's defense, you are going to be damn concerned about the strength of the American currency at this point in time, and it may be very easy for him to get clearance to speak from sympathetic officials.

The main area where I question Jim is that he just assumes that the gold is in Fort Knox. I think Eric King questioned him on this before, and he honestly just answered that he has no reason to think it isn't there. I don't know if he goes into this in the book or not. That could mean it is there, and Jim knows some information that the doubters don't. It could mean that he is lying, but I really doubt that. Or it could mean that he has been immersed over the years in a military/intelligence culture where everybody who he interacts with seems assured that it is there. I think the latter is the most likely.

[Bern]

I'm quite sure that Rickards had talks with Pentagon peeps and got clearance to publish what he did in the book. The logical conclusion is that releasing the info serves their purposes.

[Seraphim]

This. HOPEFULLY the purpose it to gain public support for tying part of the value of the dollar to gold. The other side is that it is to gain support for war with China. Clearly, opposite sides of the spectrum...but I lean toward the former, as far as Rickards' purpose.

Additionally, I think this time around, if the USD is pegged to gold...they will lean on the inflation side of things...Rickards has access to more "inner" circles and KNOWS the great depression was the result of UNDER pricing gold in relation to the currency, thereby creating massive deflation.

Ultimately, if these debts are to be payed off without alienating trading partners...it will take quintuple digit gold and quadruble digit silver (or close to it). I.e, 12,000$ gold and 1,000$ silver.

Linking the USD in such a way would allow for debts to be paid, the world over, in tangible assets while also not bankrupting...everyone...The chances of war drop to the floor...




I'm quite sure that Rickards had talks with Pentagon peeps and got clearance to publish what he did in the book. The logical conclusion is that releasing the info serves their purposes.