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Currency Wars: The Making of the Next Global Crisis

James Rickards

3.96 · Rating details · 4,270 ratings · 361 reviews

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 dest 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. ...more

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Hardcover, 304 pages

Published November 10th 2011 by Portfolio (first published November 2011)

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Dec 24, 2011 C.V. rated it it was ok

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 hav ...more

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Sep 25, 2012 Beth rated it it was amazing

The author did a good job of explaining the history and politics of currency wars, and yes, there are always nationalistic politics involved. After reading this book, I understand what QE 1, 2 and 3 are: ways for the US to export inflation to China (and others) by devaluing the US dollar. China is the major recipient of the inflation since they peg their currency, the RNB, to the US dollar. The devaluation of the US dollar relative to other counties' currencies makes US exports cost less and is The author did a good job of explaining the history and politics of currency wars, and yes, there are always nationalistic politics involved. After reading this book, I understand what QE 1, 2 and 3 are: ways for the US to export inflation to China (and others) by devaluing the US dollar. China is the major recipient of the inflation since they peg their currency, the RNB, to the US dollar. The devaluation of the US dollar relative to other counties' currencies makes US exports cost less and is intended to spur US economic growth at the expense of its trading partners.

However, the Fed is making an all-in bet with this move. For example, if the US exports too much inflation to China, then China's economy may stall and cause unrest among its people. Unrest could lead to an uprising which could lead to physical war, especially with the ratio of young men to young women so unbalanced because of more than a generation of China's "one child policy".

Increasing the riskiness of this bet is that each national economy is starting from a relatively different position of strength. These relative differences mean not all trading partners will share the currency and its resultant trade re-balancing equally. This exercise is a classic zero-sum game which means what some trade partners collectively gain in exports, the others will collectively lose. If the changes are too big or too fast, the interwoven international trading system will be destabilized significantly or in the worst case totally collapse.

Think this is far-fetched? The Currency Wars author traces the start of WW II, back to a currency war which started in Germany in the early 1920's when the German's changed the exchange rate of the Mark relative to the price of gold. The author then takes the reader through the series of events precipitated by this revaluation of the German Mark, including FDR confiscating all private US citizen's gold, which culminated in WW II.

Ben's (as in Ben Bernanke, US Federal Reserve Chairman) big bet using quantitative easing to generate US economic growth is an extremely risky policy. To make this work, there needs to be an orderly re-balancing of currencies and the resultant trade. This is why every time he announces another round of quantitative easing, he signals the Fed's intentions. For example, when QE 2 was announced earlier this month, he said that the Fed was going purchase $40 B of mortgages from Fanny Mae and Freddy Mac each month with only the vaguest end date intimated which was that QE 2 would end when it had achieved the desired benefit. These Fed announcements are intended to signal to the international monetary markets, sovereign and others, how much "exported inflation" they will be receiving. The purpose of signaling is to allow an orderly re-balancing of trade among international trading partners. However, if the signals are missed either intentionally or unintentionally, the author postulates several possible catastrophic outcomes including the collapse of the US Dollar. He even goes so far to suggest, an all out physical war could erupt among international blocks of trading partners to physically re-balance trade.

The author also offers how best to hedge your investment portfolio if you want to protect it from the total collapse of the US Dollar.

Well worth the read. ...more

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Dec 12, 2011 Bill Gartner rated it really liked it · review of another edition

This is a really good book - but not a particularly "fun" read. The topic is pretty deep, but even with no formal background in economics (like me), the book is readable and the author does a good job of explaining the issues. The basic proposition is quite scary - that currency manipulation can be used as an effective mechanism to destroy an economy. Given the fragility of the US economy (debt being held by China, others), this is more than plausible. He favors a return in some form to a gold s ...more

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Dec 19, 2012 Kyle rated it it was ok

Rickards frames his book with an anecdote about his participation in a pentagon war game designed to simulate financial markets. The war game, like the book as a whole, disintegrates from promising to insubstantial. The participants in the war game are portrayed as largely clueless, the rules and outcomes appear arbitrary. I can't decide whether Rickards is sworn to secrecy on the details, whether he is just a poor story-teller, or whether the group of paid consultants participating in, and the Rickards frames his book with an anecdote about his participation in a pentagon war game designed to simulate financial markets. The war game, like the book as a whole, disintegrates from promising to insubstantial. The participants in the war game are portrayed as largely clueless, the rules and outcomes appear arbitrary. I can't decide whether Rickards is sworn to secrecy on the details, whether he is just a poor story-teller, or whether the group of paid consultants participating in, and the government employees designing the exercise blew hundreds of thousands of my tax dollars on what amounts to a buffet-style fellatio conference. Yet Rickards thinks this is a great first step for the Pentagon in understanding the financial weapons of the modern world. Although he rails against debt and profligacy, he seems to be really on board with this weekend pentagon circle-jerk which the author can't seem to describe any concrete benefit to.

This is all merely the introduction, but it leaves a poor taste in the mouth. The subsequent rambling survey of what Rickards designates as the currency wars of the twentieth century are only cursorily examined, with no footnotes or references. The style is infused with an easy smugness that presumes absolute faith from the reader without bothering to substantiate any claims. The book follows a mundane chronological structure that seems labored. In the second half of the book Rickards spatters some interdisciplinary nuggets of interest relating to complexity theory, which would be interesting, except that his application of these ideas is mealy-mouthed and entirely unsuccessful.

The book is too short to do what it seems to want to do, and too long for what it actually does. It lacks the focus to give you a good grip on any of the related topics covered, but it does have a certain appeal as a survey. I can't really form an opinion about the veracity of anything Rickards says, which aims at the big flaw here: this is really just a book full of "expert" opinion and what Rickards considers common sense based on his (I'm sure he would tell you) valuable Wall-Street insider experience.

Take with an enormous grain of salt. I found it mildly entertaining, but only because I have a predilection for the subject. ...more

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Jan 02, 2013 Amara Tanith rated it it was ok

Shelves: arc-netgalley, 2014, genre-nonfiction

Currency Wars: The Making of the Next Global Crisis is ostensibly that: a book about currency wars. But while much of the book does indeed focus on competitive devaluation, what Currency Wars really boils down to is James Rickards' love affair with the gold standard, and, to a lesser extent, his libertarian values and pride in 'Murica ("a nation whose moral values are historically exceptional", my ass).

Full review to come at Amara's Eden. ...more

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Nov 20, 2011 Jeffrey rated it it was ok

Shelves: read-in-2011, non-fiction, first-reads

I received this book for free in a Goodreads First Reads giveaway.

F. 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 it.

When Rickards is addresses the specific issues of monetary policy, both in term I received this book for free in a Goodreads First Reads giveaway.

F. 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 it.

When 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 U.S. and world are in with an overleveraged system that is not suffering from a lack of liquidity, 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 educational.

However, 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 inflation.

As 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 little.

And 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.

...more

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Mar 27, 2015 Evan rated it liked it

Shelves: politics, business

James Rickard is great and easy to understand. I've also watched some of his presentations at investor conferences. I first read "Death of Money" and for some reason got interested in reading "Currency Wars." Based on what I remember from Death of Money, I did not need to read this book. I think they are pretty much the same. Also, I am growing skeptical of his bearish claims. He was predicting the same dire consequences in 2010, that he does in Death of Money. I tend to agree with his thesis, b ...more

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Dec 29, 2011 Robert Kroese rated it it was amazing

This book is frankly terrifying.

Rickards starts with a historical tour, highlighting the near-catastrophic results of two previous currency wars — the first of which led to the Great Depression and World War II, and the second of which led the malaise and stagflation of the 1970s. In each case, governments desperate to bolster domestic employment vastly increased the supply of their currency (by printing money or through other means) in order to prop up exports. In some cases this tactic worked This book is frankly terrifying.

Rickards starts with a historical tour, highlighting the near-catastrophic results of two previous currency wars — the first of which led to the Great Depression and World War II, and the second of which led the malaise and stagflation of the 1970s. In each case, governments desperate to bolster domestic employment vastly increased the supply of their currency (by printing money or through other means) in order to prop up exports. In some cases this tactic worked to some degree over the short term, but over the long term it resulted in competitive currency devaluations with disastrous social and economic consequences.

Delving into the current world financial situation, he explains how the Fed, the U.S. Treasury and the IMF are responding to recession and unemployment with the same tactics that decisively failed in the past, and shows how the current situation is in several key ways far worse than other past crises. With Obama’s stimulus having failed to accomplish anything but vastly increase federal debt, consumers in debt up to their eyeballs, and a third round of “quantitative easing” on the horizon, the powers-that-be are rapidly running out of sleight-of-hand maneuvers to rebuild confidence and get people spending. Rickards sees a wholesale collapse of the dollar — and, by extension, the global financial system — looming ahead. He roots his arguments in recent developments in complexity theory, which seem to indicate that current policymakers vastly underestimate the risk of a systemic collapse.

He proposes some common sense reforms to forestall that collapse: breaking up “too big to fail” banks, outlawing most derivatives (which increase complexity while masking risk), and limiting the involvement of banks in risky trading and underwriting — and one more controversial move: going back to a gold-based currency. This last may seem extreme, but in Rickards’ view we are likely headed back to a gold standard (or something worse) whether we like it or not, and it would be better to adopt this standard in an orderly, reasoned manner than to wait until the dollar simply collapses, leaving gold as the de facto standard.

This book is a well-written, shrewdly argued, balanced and concise account of the predicament we find ourselves in at the beginning of 2012 — and what we can do about it. You must read this book. ...more

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Oct 21, 2011 John rated it it was amazing

Shelves: 2011

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 fa ...more

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Oct 20, 2017 Sukriti Aggarwal rated it really liked it

It is one of the finest books to understand currency wars ;its evolution , impact ,past etc .

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Jul 27, 2015 Kirk Houghton rated it really liked it

How does QE export inflation from the US to China and cripple Brazil’s export market? Can the dollar survive as a fiat currency or will it have to be backed by a commodity once again? Why has the Federal Reserve failed on every level since 1913? How might enemy nations bring down the dollar?
These questions are all answered in this alarming book written by former Investment Banker and Risk Manager, James Rickards, who believes the US dollar cannot survive in its current format.
But first, let’s st ...more

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Oct 08, 2012 Ian Robertson rated it it was amazing

James Rickards has combined a thought provoking mix of history, economics, current events, and his own experience to produce a fascinating and thought provoking book. As the title suggests, it focuses on the relative value of the US dollar versus other currencies, and the possible and probable outcomes of the current fiscal and monetary policies (the so-called ‘wars’) of major economies. Crisply written with just the right level of theory to prove points without dragging the reader into detailed James Rickards has combined a thought provoking mix of history, economics, current events, and his own experience to produce a fascinating and thought provoking book. As the title suggests, it focuses on the relative value of the US dollar versus other currencies, and the possible and probable outcomes of the current fiscal and monetary policies (the so-called ‘wars’) of major economies. Crisply written with just the right level of theory to prove points without dragging the reader into detailed economic formulas.

Rickards provides an historical overview, drawing important lessons and debunking some myths from the gold standard era, two previous currency war eras (post WWI and 1967-1987), and the recent rise of the G20, globalization and state capital. For example, he debunks the myth that German hyperinflation in 1921 was to devalue war debts; rather it was an effort to spur an export led economic recovery when no other options were acceptable. Lessons abound in thinking of who fared better than whom in that era; debtors, and owners of businesses, real property, and foreign assets far outpaced people on a fixed income or with simple savings accounts. With respect to recent history, Rickards is outstanding in highlighting recent news items such as Gazprom’s shutting the valve on Ukraine’s natural gas lines and China’s and Russia’s statements and actions with respect to developing an alternative reserve currency.

Rickards shows the weaknesses in monetarism and Keynesianism, and then introduces complexity theory, in which increasingly complex systems - societies and financial institutions to name but two - require exponentially higher levels of energy to sustain. With respect to society and its energy - money - “at some point productivity and taxation can no longer sustain [it], and elites attempt to cheat the input process with credit, leverage, debasement and other forms of pseudo-money that facilitate rent seeking over production.” A point broadly made more than 60 years ago by Thomas Robertson in his little read work “Human Ecology” (available on Amazon’s US site and through AbeBooks).

Following his description and analysis of complexity theory, and addressing the increased rather than decreased complexity and size of banks since the financial crisis of 2008, he states “a new collapse, larger than the one in 2008, [is] not just a possibility but a certainty. Next time, however, it really will be different … [and] will not be stopped by governments, because it will be larger than governments.”

Rickards concludes with sobering words. “At some point society has three choices: simplification, conquest or collapse.” “Currency wars are just an attempt at conquest without violence. Collapse is a sudden, involuntary and chaotic form of simplification.”

Despite its considerable strengths, the book is not flawless. The introductory section that introduces the concept of currency wars is weak but short. Readers can skip or skim this to no ill effect. As well, in his excellent description of cause and effect with respect to the US federal Reserve’s quantitative easing actions on China’s exchange rate and inflation rates, Rickards notes the Fed was able to “ease conditions in China,” implying this was a desirable outcome. Many economists would counter that one of China’s problems is that monetary conditions are too easy already, as defined by their real rather than nominal interest rates, though the benefit falls almost exclusively to business rather than to consumers. Finally, Rickards approaches his argument with a subtle right wing bias (tax cuts, smaller government) and is given on occasion to hyperbole (for example, “Bernanke was increasingly out of touch with the world”). Minor complaints for such a compelling book.

Many people are far more nervous today about our current fiscal and monetary direction, though for most it is just a general nervousness - a recognition that our economic path, now illuminated by the 2008 crisis, is not a smooth road but a precipice edge. They don’t have a map to provide context or the options as we move forward. Rickards does an excellent job providing that map, and as with the geographic maps in the early centuries of exploration, competing economic cartographers might debate the details, but all would acknowledge that having a map is far superior to just following a crowd. Concise, well written, and thought provoking, Currency Wars should be read by all. ...more

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Dec 16, 2018 Shivanshu Singh rated it really liked it

Shelves: business

Currency Wars discusses the emergence of a new frontier in the theatre of modern warfare that is often underestimated by the world governments. This book does a great job of explaining the complex economics phenomena involving currency flow, international trading, international monetary systems in simple terms. However, sometimes it becomes hard to follow when the author dives into its subtleties. From WWI to 2010, this book covers, in chronological order, various financial recessions and crisis ...more

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Mar 24, 2014 Malek Dabbous rated it really liked it

This book provides a great brief on the currency wars going on around the world and their impacts on our daily lives. Lots to learn from this read and it's delivered in a historical, economical and financial way. I recommend this to everyone as we can all benefit from learning about the Quantitative Easing and currency devaluation that countries are conducting, despite negative impact to the global economy. ...more

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Mar 29, 2018 Ashish Samuel rated it liked it

Shelves: economics-policy, politics

Reading this book felt a lot like watching the movie 2012, after the year 2012. In fact it has a dramatic flair that even exceeds the movie. The first page itself shows how outdated the book is. James Rickards declares that Obama will go back to the gold-backed currency regime. This audacious and miscalculated prediction perhaps makes him cringe now, though his subsequent books suggest otherwise.

Rickards quickly follows it with a financial war game he participated in at the Pentagon. It sounds a ...more

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Jul 11, 2020 Nerses rated it liked it

Shelves: economics

Being myself a lawyer, interested in finance and economics, I read books on the topic. However, I would recommend you to be wary of lawyers who actually write such books. Aparently, this Rickards guy is too self-important and full of sh*t. Although, you shouldn't take my opinion for truth of last instance.

I might have overrated the book due to my lack of expertise. The research is not in-depth, but it is still of some value as a more or less fine introduction to the subject. Also, I was glad to ...more

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Feb 11, 2018 Troy Tegeder rated it really liked it

Thorough and well written. While many parts were very interesting, this is not a light read. At times, it can be dry and complicate day the same time. Scary to think how much our currency is pegged to nothing but perception, and how China could destroy our currency by calling in our debt to then when their bonds come due. Savers lose, speculators stand to win in our world of government-controlled currency.

Empirical data is explained, showing that Keynesian multipliers are negative when governme ...more

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Mar 21, 2016 Elena rated it really liked it

Shelves: business-non-fiction

A few notable excerpts:
The classical gold standard.
The classical gold standard (1870-1914) was a period with almost no inflation characterized by technology improvements in communication and transportation.
Bretton Woods System.
The Bretton Woods Conference was held in New Hampshire in July 1944. “The result was a set of rules that shaped the international monetary system for the next three decades.” New monetary system was anchored to gold through a USD convertible into gold at $35 per ounce and A few notable excerpts:
The classical gold standard.
The classical gold standard (1870-1914) was a period with almost no inflation characterized by technology improvements in communication and transportation.
Bretton Woods System.
The Bretton Woods Conference was held in New Hampshire in July 1944. “The result was a set of rules that shaped the international monetary system for the next three decades.” New monetary system was anchored to gold through a USD convertible into gold at $35 per ounce and with other currencies having fixed exchange rates against the USD.
US trade deficits with China
The People’s Bank of China controls the surplus dollars that Chinese exporters earn trading with the US. It leads to several consequences. First, the PBOC has to print as many yuans as the Fed prints dollars to maintain the pegged exchange rate. Second, the PBOC has to invest the surplus dollars into something liquid and secure, so they buy US Treasury securities. By 2011, about 30% of Chinese foreign reserves were invested in US government obligations. But there is less excess capacity in China to absorb the surplus without causing inflation than in the US. “China is now importing inflation from the US through the exchange rate peg”.
Joseph Tainter research.
Tainter analyzed the collapse of 27 civilizations and showed that the outputs of civilizations and governments decline per unit of input as civilizations get bigger. In the beginning of civilization returns to investment are high (e.g. irrigation systems), but over time efficient bureaucracies turn into elites who are more concerned with their own share of shrinking pie than the welfare of a society.
Monetarism
Milton Friedman: changes in the money supply are the most important cause of changes in GDP. Quantity theory of money: MV = PY. The Fed can only control the money supply (by purchasing or selling government bonds with newly printed money). But in order to revive the economy, it needs to “accelerate bank lending and velocity, which result in more spending and investment.”

Keynesianism
“The Keynesian multiplier theory rests on the assumption that a dollar of government deficit spending can produce more than a dollar of total economic output.” The theory says that the government can step in and spend money that individuals will not spend to increase aggregate demand. Recent studies by John Taylor and John Cogan of Stanford University have shown that the multiplier is less than 1, which means that for every dollar of government spending the amount of goods and services produced by the private sector declines.
Complexity Theory
Rickards contribution. Requirements: 1) diversity in the types of agents; 2) connectedness; 3) interdependence and mutual influence; 4) adaptive and learning; 5) emerging properties (the whole is bigger than the sum of parts). Distribution of events in complex systems is described by the power law.
According to complexity theory, every increase in scale causes a much greater increase in risk. Shorts are not subtracted from longs – they are added together. The bigger the scale, the more catastrophic the events. One solution is descaling – reducing the size of the snow mass. Another solution is not letting any one component grow too big. ...more

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Mar 17, 2012 Ben Galbraith rated it really liked it

I've never thought much about our financial system. Every so often my curiosity is aroused at how it is those Wall Street traders are able to profit so handsomely from things like arbitrage and other forms of cream-skimming, but generally, I'm focused on other things.

So Currency Wars has been quite an education for me, and a very interesting one. I learned from it the relatively immaturity of our particular form of currency, for example. I didn't know that for most of the past two hundred years, I've never thought much about our financial system. Every so often my curiosity is aroused at how it is those Wall Street traders are able to profit so handsomely from things like arbitrage and other forms of cream-skimming, but generally, I'm focused on other things.

So Currency Wars has been quite an education for me, and a very interesting one. I learned from it the relatively immaturity of our particular form of currency, for example. I didn't know that for most of the past two hundred years, all currencies had fixed exchange values pinned to gold, and that the nations would work together when relative currency value adjustments were made. I'd never have guessed that the notion of highly variable market-driven exchange rates is a relatively modern notion.

It also explained to me why we moved off the gold standard and the implications of a trust-backed currency. ("Be worried," is essentially the position of the author.) I especially enjoyed the author's proposal for how the world can return to a gold-backed standard, and why despite Ben Bernake's claims, he thinks it would be feasible and a good idea.

And then, there's the bits about complex systems. The author spends a good deal of time talking in both theory and practical terms about complexity theory and how it relates to currency. Because I spend much of my time building complex software systems and grappling with complexity in general, I found the discussion captivating both in its applicable to money and in general.

And of course, there's the material that directly relates to "currency wars", or the notion that stealing resources from other nations by manipulating our currency (and theirs) to extract value from their economy and inject it into our own is really just another form of conquest and does indeed deserve the term "war"--for grabbing the resources of other nations to fuel one's own growth is nearly always the objective of any sort of war. This was a fascinating topic, especially the bit where the author asserts that the US has been engaged in a program to inflate the value of the yuan indirectly by growing the dollar supply.

There are things to criticize about the book, but I won't bother to write them. Suffice it say, I enjoyed the read and recommend it to others. ...more

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Jan 30, 2013 John Martindale rated it it was amazing

Shelves: audiobook, economics, history, politics, hope-to-re-read

This book was quite interesting, helping me understand a little more:

Why the FED does all the horrible things it does
Why FDR confiscated American's gold with an executive order &
Why our president could possibly do the same thing if a crisis arises.
Why the GOV is intentionally trying to devalue the dollar with QE
Why the elite laugh at those who speak of the need for a gold standard
Why the last two global currency wars hurt even the winners

Its something else how entangled our world is together ...more

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May 21, 2014 Clement Ting rated it liked it

It is unfortunate that I am unable to fully comprehend the idea as I am not all too familiar with the gold standard. Readers in my shoes should not worry too much as the author however did try his best to give a good history course with some brief explanations on the gold standard. I find that very helpful, albeit very minimal to fully appreciate the whole book. A second round of reading after some thorough study on the gold standard would most definitely be helpful.

Regardless, the general conce ...more

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Sep 03, 2014 JR rated it liked it

This was a tough book for me, as I really didn't understand so much of it. That is my own failing and not that of the author's, who did a great job of laying out what a currency war is, how previous currency wars have played out, and what is happening with the current one. I think this book only covers up to 2011, so I wonder how much has changed since he wrote it.

Without a doubt, our current economic situation in the US (as well as the rest of the world) is tremendously stress and headed for v ...more

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Mar 27, 2016 Johan Harith rated it really liked it

Rickards is a well trained and experienced, commentator on economics, geopolitics and finance.

This book illustrates the cracks in the world financial system. It reveals just how fragile the game governments are playing is and how even a currency war with no obvious mortal victims is actually a deadly game of attrition.

The book itself "...reads like a thriller." ~ Max Keiser RT, and with its mentioning of financial war games, government planning, strategy and the nature of money itself, those w ...more

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Sep 28, 2014 Matthew rated it really liked it

Shelves: politics-economics

This was a fascinating book. It covers a lot that I feel like I knew generally but gives some technical details to back up the claims making macroeconomics a lot less "theoretical." I also think that the global economy and the dynamics that support it are even more complicated than I thought and the merits of some measure of intervention are a bit more gray than I had imagined. There was quite a bit in the book that was over my head regarding high finance and Wall Street jargon.

The chapter on co ...more

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Dec 02, 2014 Kevin rated it really liked it · review of another edition

I never did develop a real interest in macroeconomics topics though I got a degree in economics, probably due to the concepts were quite far away from my twenty-something mind and life. The way this book put the concepts in historical and "war" context makes this a interesting read. Like a Chinese saying "商場如戰場", international trade is always a war zone and currency is no doubt a weapon. Currency wars have happened before, and will happen again, until everyone realizes that it is a mutually dest ...more

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Apr 12, 2016 Johns rated it it was amazing

"The path of the dollar is unsustainable and therefore the dollar will not be sustained." So writes this clear-thinking author as the first line in his concluding chapter. This is an outstanding book that should be read and digested by every thinking American voter.

Of course, it won't be. And so we all in for perilous times as our thoughtless Fed continues to devalue our dollar and ruin our economy. The racking up of astounding public debt every year doesn't help out either. We're shackling our ...more

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May 01, 2020 Arun Babji rated it it was amazing

I learnt a lot about currency wars of the past, advantages that nations gained by cheating, the difficulty of nations trusting each other during difficult times, Power law and complexity theory, and how we are headed towards a bigger crisis. Though the book was written in 2011, the current COVID crisis seems to play out exactly like the author envisioned - a race among nations to print more currency; demonize the creditor (China) while devaluing currency and outstanding foreign debt. Great read!

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May 17, 2012 Erwin rated it really liked it

Interesting.
Agree with most of the summary except for the author's point that gold is the solution.

Rapid inflation is the enemy. The author believes Keynes is totally wrong. I don't see it that way.

Author believes we can create a system that is self regulating, instead of choosing better rules and better regulators.

Counter cyclical spending is important.

Instead of a gold standard, why don't we just have actual honest inflation numbers? The fed just adjusts the money supply to ensure inflation do ...more

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May 12, 2012 Anil Swarup rated it really liked it

An interesting, incisive and credible analysis of what is going wrong in the financial world and why the latest currency war is being fought. The author also provides for a prescription to deal with the situation. He is firmly of the view that the Keynesian is not the right one now as the objective conditions are different from what existed during the great depression. The author advocates a proactive role for the IMF and revival of a refined version of the dormant SDR to prevent the currency wa ...more

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Jan 25, 2015 Lisa rated it really liked it

I really liked this book. It's a complicated issue and I find it difficult to follow all the players and how things have evolved over time, but I think Jim Rickards does a good job explaining the history, the various economic theories that have been used, the flaws in the system, and where we might be headed. I recommend this book to anybody who wants to try to understand where we are currently, in regards to the global economy and the value of our money (US$). If you are keeping up with the new ...more

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About James Rickards

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Books by James Rickards

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“A prohibition on the hoarding or possession of gold was integral to the plan to devalue the dollar against gold and get people spending again. Against this background, FDR issued Executive Order 6102 on April 5, 1933, one of the most extraordinary executive orders in U.S. history. The blunt language over the signature of Franklin Delano Roosevelt speaks for itself: I, Franklin D. Roosevelt . . . declare that [a] national emergency still continues to exist and . . . do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the . . . United States by individuals, partnerships, associations and corporations.... All persons are hereby required to deliver, on or before May 1, 1933, to a Federal reserve bank . . . or to any member of the Federal Reserve System all gold coin, gold bullion and gold certificates now owned by them.... Whoever willfully violates any provision of this Executive Order . . . may be fined not more than $10,000 or . . . may be imprisoned for not more than ten years. The people of the United States were being ordered to surrender their gold to the government and were offered paper money at the exchange rate of $20.67 per ounce. Some relatively minor exceptions were made for dentists, jewelers and others who made “legitimate and customary” use of gold in their industry or art. Citizens were allowed to keep $100 worth of gold, about five ounces at 1933 prices, and gold in the form of rare coins. The $10,000 fine proposed in 1933 for those who continued to hoard gold in violation of the president’s order is equivalent to over $165,000 in today’s money, an extraordinarily large statutory fine. Roosevelt followed up with a” — 3 likes

“There is hardly a part of the United States where men are not aware that secret private purposes and interests have been running the government.” President Woodrow Wilson” — 2 likes

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