Currency Wars; The Making of the Next Global Crisis

New York: Portfolio/Penguin, 2011. First Printing [Stated]. Hardcover. Very good/Very good. Robin Wood (Author photograph). xvi, 288 pages. Notes. Selected Sources. Index. James G. Rickards (29 September 1951) is an American lawyer, investment banker, media commentator, and author on matters of finance and precious metals.[1] He is the author of Currency Wars: The Making of the Next Global Crisis (2011) and six other books. Rickards graduated graduated from Johns Hopkins University in 1973 with a Bachelor of Arts, and in 1974, from the Paul H. Nitze School of Advanced International Studies, with an M.A. in international economics. He earned a Juris Doctor from the University of Pennsylvania and an Master of Laws in taxation from New York University. He held senior positions at Citibank, Long-Term Capital Management, and Caxton Associates. As general counsel for Long-Term Capital Management, he negotiated the $3.6 billion rescue of the firm via the U.S. Federal Reserve in 1998. Rickards worked on Wall Street for 35 years. and became the senior managing director at Tangent Capital Partners LLC, a merchant bank based in New York City, and also the senior managing director for market intelligence at Omnis, Inc., a professional and scientific consulting firm. In March, 2009, Rickards presented his view at Johns Hopkins University, that the U.S. dollar was facing imminent hyperinflation and was vulnerable to attack from foreign governments through the accumulation of gold and the establishment of a new global currency. In September, 2009, Rickards testified before the U.S. House Science Subcommittee on Oversight about the risks of financial modeling, value at risk, and the 2008 financial crisis. 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.