Jim Rickards' New Book "The Death of Money", Review

[Dr Bloggood]

So I just finished Rickards' brand-new book. It's an ok read, but I also feel like I didn't learn too many new things.

On one hand, 90% of the book makes a lot of sense and there are some smart thoughts to be found in it. On the other hand, if you are well-informed about the current economic disaster (as a lot of posters on this forum are), you will not profit that much from reading it. Also, be adviced that some basic economic understanding is a precondition for reading this book: It certainly brought me to the edge of my economic understanding. All in all, if you know about the breakdown of the monetary system, save some time by reading this post and a couple of Rickards' interviews on the web and leave out the book!

The first half of the book, while a good read, is really relatively superfluous for anybody who knows a bit about the topic. The first chapter is about insider trading of terrorist associates before 9/11, and is really interesting, but has no connection to the topic of the book. Overall, the author really loves to hear himself talk, and that's a problem.

The book continues with chapters about the fragility of todays trading mechanisms, the blunders of the Fed and the region chapters: One about China, Europe and the Emerging Markets each. The ones about China and EM contain some interesting stuff, but the historical and theoretical explanations are way too waste IMO.

The second half is more interesting:There is a chapter on US debt, then one on the IMF (it was the most interesting chapter for me, but it didn't enlighten me in extreme ways either), a chapter on gold that told me almost nothing new (I know a lot about gold manipulation though), and the end of the book is about conclusions and the breakdown of the system. Oh, and Rickards gives advice on how to invest your money in times like these - he elaborates on almost 3 whole pages...

The book does also contain some stuff that I certainly don't believe in: Above all, this concerns the chapter about Europe, "The New German Reich". God, that chapter is one single piece of hogwash! Rickards seems very fond of Europe, fair enough. His outlook on Europe is extremely positive though, and the whole chapter reads like the stuff I see and hear on Main Stream Media every day: Europe is through the crises, brighter times are about to come, etc... As a European, I can only assume that he is too far away to grasp reality here.

Rickards completely ignores devastating numbers from the European economy, which have only been getting worse. Quote: "By late 2012, the European sovereign debt and bank crises was largely contained" (p. 128). Excuse me!?? He enthusiastically writes about a treaty between EU members that "requires signatories to have budget deficits of less than 3% of GDP when their debt-to-GDP ratio is under 60 percent." More rigid requirements are valid for counties with higher ratios - but he completely ignores all the regulations of the past about debt, which have been broken by most EU members without any consequences. So where is this guy living (in the US, I know...)?

According to him, "Greece needs only more flexible work rules, lower unit labor costs, and new capital." This stuff makes me laugh. Greece at least additionally needs/needed stricter tax enforcement and measures against corruption - but also, the Greek and the German economy, for example, just don't make a good fit! The same easy money policy Rickards condemns in the US, is totally ok for him in Europe. And finally, the most outrageous claim of the book is the claim that Germany (edit: the Eurozone) has "real positive interest rates" (p. 127)! What the fuck!?

But enough of that chapter.

Other unusual things Rickards claims are that he believes the official inflation numbers and doesn't believe the US gold is missing. Instead, he believes Germany never wanted its gold back when claiming repatriation, but just had political pressure inside of Germany to make a claim. In fact, Germany wants to keep its gold at the Fed to have it used for ongoing manipulation purposes. Doesn't make any sense to me.

An intruiging thought is that the goal of the international community is to let China accumulate enough gold so it is on par with the other main players in terms of gold-to-GDP-ratio. The others want China equal so it will be able to participate in the building of the new monetary world order. That order will be in gold and/or SDRs (Special Drawing Rights).

I'm glad we have economists like Rickards, smart thinkers outside of the system, but I also think unless you know very little about the topic, you don't have to read that book.

[CoinCube]

Thanks for taking the time to write this.
I found the review very helpful. Will probably take a pass on this book.

[roslinpl]

Well this is very well written review!
This book seems to be very interesting and worth reading.

+1 for sharing.

Jim Rickards know a lot about WallStreet and about trading and about money.
That's for sure.

[counter]

Thanks for the review I've heard about this book and I may get a copy after reading your review.  I just wish the bookstore nearby hadn't shut down.  But yea well put together review.

[roslinpl]

Just found a cover for this book:




A graveyard of fiats.   

[Dr Bloggood]

Thanks for taking the time to write this.
I found the review very helpful. Will probably take a pass on this book.

You are welcome!

[Dr Bloggood]

Well this is very well written review!
This book seems to be very interesting and worth reading.

+1 for sharing.

Thanks! I love the fact the first two responses here go into 2 totally different directions, ha ha! That means I could kind of round out the picture.

Jim Rickards know a lot about WallStreet and about trading and about money.
That's for sure.

That's absolutely true, he does!

It's just that chapter about Europe that raised my blood pressure...

[Dr Bloggood]

Thanks for the review I've heard about this book and I may get a copy after reading your review.  I just wish the bookstore nearby hadn't shut down.  But yea well put together review.

No problem.

What about Amazon? You could wait till they accept BTC and then buy...

[Dr Bloggood]

Just found a cover for this book:




A graveyard of fiats.   

Yeah, I spent a lot of time with that cover over the last couple of days...

I love it, it's the equivalent of the "Currency Wars" cover, with bills of different currencies shooting at each other.

[OROBTC]

...

@ Dr Bloggood and fellow BTC Talkers interested in money

Thank you for the review, Doc!  I have read many books that are in this general "space", and believe that our monetary systems are in peril for several reasons.

I appreciated very much your views on Europe and especially Germany.  Most of what I read says that Germany is really rockin' even while not mentioning the strong ties that Germany has with the rest of (faltering) Europe.  Your comments balance that noise...   

While I believe that a full-blown collapse of the financial system is unlikely (that is, taking us to a "Mad Max" or TEOTWAWKI...), there is an excellent chance of what I call "Great Depression v. 2".  Where it gets very hard to get work, crime goes up (typical in very hard times) and a variety of ugly after-effects.  The probability of something bad is pretty high, IMO.  And it will be worldwide.

What to do?  Saving money, in various forms (gold, BTC, etc.) is part of the equation.  Getting out of debt.  Owning other hard assets, including CA$H at home.  And depending on how severe you think our system might crash: guns & ammo, water & food, etc...  The big question is, how much (and how) do you prepare?  That depends on your level of financial paranoia (I am financially paranoid) and your own situation.

Excellent thread!

[Dr Bloggood]

I appreciated very much your views on Europe and especially Germany.  Most of what I read says that Germany is really rockin' even while not mentioning the strong ties that Germany has with the rest of (faltering) Europe.  Your comments balance that noise...  

Don't get me wrong, Germany is still kind of rocking, at least compared to much of the rest of the EU. But it won't be able to carry that weight forever, and the overall situation gets worse and worse. Anyways, I couldn't believe my eyes when I read about "positive real interest rates". Actually, reading that passage again, Rickards is probably refering to the Eurozone, and not to Germany, but it's bullshit anyways. The Eurozone interest rate is 0,25% and inflation is 0,50% and must have been higher when the book was written. But even now the real interest rate is negative (-0,25%).

Btw, Rickards says that gold would have to be re-evaluated to at least $7.000 - $9.000, was it to be used for an (even partial) gold standard. That calculation makes sense.

[OROBTC]

...

Rickards needs to think BIG re future price of gold.

$55,000 - $100,000 per oz.  Non-hyperinflated dollars.

Long and hard reading, but pretty much required if you really like gold, start way back in late-2009 if possible, although his second newest post is an acceptable summary of his ideas:

fofoa.blogspot.com




_{I am not FOFOA.}  

[STT]

Germany has problems with its falling population I believe which of course effects working capital in their economy
Spain, Japan also and their problems are more obvious


Rickards should know about failure, he was involved with LTCM which was a bailout preceding Lehmans

[Dr Bloggood]

...

Rickards needs to think BIG re future price of gold.

$55,000 - $100,000 per oz.  Non-hyperinflated dollars.

Long and hard reading, but pretty much required if you really like gold, start way back in late-2009 if possible, although his second newest post is an acceptable summary of his ideas:

fofoa.blogspot.com




_{I am not FOFOA.}  

$55.000 - $100.000 non-hyper inflated is a bit much, although not completely out of the question. It's clear though that Rickards stays on the conservative side of estimation there, just to make sure nobody comes to him in 10 years and says: "You said gold would go to $50.000, but it only went to $17.000! You suck!"

It's a good thing to calculate your potential gains on the conservative side, and $7.000 is quite conservative.

I have heard of FOFOA, but have never really dived into his theories.

You said you have read many books about themes like this one - which ones did you like best?

[Dr Bloggood]

Germany has problems with its falling population I believe which of course effects working capital in their economy
Spain, Japan also and their problems are more obvious

Actually, he makes the point that if workers from European countries with high unemployment could be moved to countries in which population/work force is missing, that would be a great thing for Europe. Europe is not short of qualified workers.

That's one of very few points in the European chapter that make sense...

[AnonyMint]

I appreciated very much your views on Europe and especially Germany.  Most of what I read says that Germany is really rockin' even while not mentioning the strong ties that Germany has with the rest of (faltering) Europe.  Your comments balance that noise...  

Don't get me wrong, Germany is still kind of rocking, at least compared to much of the rest of the EU...

You are uninformed as 0.7% growth (and on a consistent decline after peaking at 4.2% in 2010) is not rocking:

https://bitcointalk.org/index.php?topic=365141.msg6167555#msg6167555

All of Europe will sink into negative growth later this year or next.

Global sovereign debt BIG BANG starts 2015.75.

And it will be worse than horrific.

WTF is wrong with you people? This is a 200 - 300 year high in global debt (even the IMF said that).

This is a 200 year event.

This ain't gonna' be no Great Depression 2.0. It is going to be like the collapse of Rome from 1.4 million to 30,000 population and stayed that way for 600+ DARK years.

Do you boiling frogs have any freakin' clue why? Look at what the bastards are doing:

https://bitcointalk.org/index.php?topic=564097.msg6278398#msg6278398

[STT]

That does happen and Germany has alot of immigrants and workers, but its not without some trouble from its population.   It is good for an economy to receive valid workers but the people may not feel as much if they are outnumbered by people who may not even speak the language.    Kazakhstan is the size of europe but with only the population of a couple major UK cities, they have many migrant chinese workers apparently and risk 'losing' their country to foreigners who never leave.
  Its fairly controversial but there are some benefits to europe from shared resources and it does have this strength there.   Also a ton of red tape and politics and general stupidity so no utopia

$7.000 is quite conservative.

Also 7000 is an arbitrary figure as any great rise in gold likely comes with a fall in dollar so we are not talking present day values but unknowns.   Eventually gold will continue at the same value its been on average anyway but its possible it does spike as high as previous centuries, apparently Henry VIII's gold sovereigns were an all time high during his reformations.  They are still made today, not much else lasts that long.
If we are blowing smoke, I'll say 70,000 as that'd be inline with similar currency depreciation like Marc Faber has studied in the past.   Look at the rouble, peso or drachma and price gold in that over the years and the price gets silly quick

If we base estimates on past fiat devaluations as below, gold sold at $1300 USA dollars becomes 91, 170 or $284,000 over a century I guess

The enormous gold sovereign was introduced by Henry VII (Henry VIII's father), who wanted a new ostentatious gold coin, which could be worth the huge sum of one pound sterling.

Until this point the pound sterling had been a value, rather than a coin, used for accounting purposes as the equivalent of 240 silver pennies (one pound in weight of Sterling silver). However this new, almost impractically large coin of 99.48% gold was made equal to £1, or 20 shillings, with exactly half a troy ounce of gold - an unbelievable value for a single unit of currency.

Its minted half that weight now so if we presume gold price accurate in both cases then Sterling has devalued 99.5% over 500 years, mostly in the last fifty I think since we dropped silver from the coins.  
So sterling is the oldest still used currency besides gold but almost in name only.  Its no longer silver or gold based, neither is dollar; also originally copied like pound from a silver coin standard
[The 9th century 1 pound silver is £131 now, the 16th century Sterling pound is now £70 but silver itself is less valued now due to south american mines, we cant say gold wont do the same but it hasnt so far apparently]

[Dr Bloggood]

I appreciated very much your views on Europe and especially Germany.  Most of what I read says that Germany is really rockin' even while not mentioning the strong ties that Germany has with the rest of (faltering) Europe.  Your comments balance that noise...  

Don't get me wrong, Germany is still kind of rocking, at least compared to much of the rest of the EU...

You are uninformed as 0.7% growth (and on a consistent decline after peaking at 4.2% in 2010) is not rocking:

https://bitcointalk.org/index.php?topic=365141.msg6167555#msg6167555

All of Europe will sink into negative growth later this year or next.

Global sovereign debt BIG BANG starts 2015.75.

And it will be worse than horrific.

WTF is wrong with you people? This is a 200 - 300 year high in global debt (even the IMF said that).

This is a 200 year event.

This ain't gonna' be no Great Depression 2.0. It is going to be like the collapse of Rome from 1.4 million to 30,000 population and stayed that way for 600+ DARK years.

Do you boiling frogs have any freakin' clue why? Look at what the bastards are doing:

https://bitcointalk.org/index.php?topic=564097.msg6278398#msg6278398

Dude, keep your cool and read that phrase you quoted and my OP again carefully! Your anger is making you adress the wrong people. I would say 0,7% is pretty rocking compared to what's happening in Spain, Italy, Greece or Portugal.

I'm basically of your opinion, and I think this could be as bad or worse than the great depression. You are smarter than me, because you know it will start exactly in 2015 (so 7th of May 2015 or what) and know exactly how bad it will be. I don't know when it will start or how bad exactly it will become.

[Dr Bloggood]

$7.000 is quite conservative.

Also 7000 is an arbitrary figure as any great rise in gold likely comes with a fall in dollar so we are not talking present day values but unknowns.   Eventually gold will continue at the same value its been on average anyway but its possible it does spike as high as previous centuries, apparently Henry VIII's gold sovereigns were an all time high during his reformations.  They are still made today, not much else lasts that long.
If we are blowing smoke, I'll say 70,000 as that'd be inline with similar currency depreciation like Marc Faber has studied in the past.   Look at the rouble, peso or drachma and price gold in that over the years and the price gets silly quick

Well, $7.000 would be in real terms, in todays-dollar-terms, just calculating gold against the money supply. To that, you would have to add any (hyper)inflation, which, as you say, should be expected. So the end number might be a lot higher, but us PM holders won't gain anything from that. The nominal number isn't that interesting in the end.

Interesting history lesson there!

Oh, and nice avatar!

[AnonyMint]

Dude, keep your cool and read that phrase you quoted and my OP again carefully! Your anger is making you adress the wrong people. I would say 0,7% is pretty rocking compared to what's happening in Spain, Italy, Greece or Portugal.

I'm basically of your opinion, and I think this could be as bad or worse than the great depression. You are smarter than me, because you know it will start exactly in 2015 (so 7th of May 2015 or what) and know exactly how bad it will be. I don't know when it will start or how bad exactly it will become.

I am not angry. I am trying to wake you up from your complacency.

What part of 200 year debt highs do you fail to grasp?

What part of massive corruption do you fail to grasp?