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

[Erdogan]

[...]

There is a massive level of overcapacity in manufacturing in the world. China's manufacturers are learning how to sell direct, check out http://dhgate.com

[...]

There can never be. We want maximum production, at least per hour worked. It is the purpose of the economic system. There can only be production of the wrong things. In the market, this will be adjusted by the price signals. A company goes bust, leaving the resources for a better adapted company.

GM has stuffed the distribution channel with nearly a million cars. It is not on their balance sheet. This can only happen if there is a major price distortion. My guess is that they give the distributors loans, backed by gifts from their government friends. If nothing more, just an implicit guarantee of a future bailout could have been enough.

[Dr Bloggood]

@ Dr Bloggood

I changed my mind and decided to buy Rickards' book.  So far, I am finding much better than I had thought it would be.  I have read a lot of doomer-financial stuff, but Rickards looks like he is very much on top of the game as well as being well-connected.

I'll report back with my own review when I finish it, but it has kick-started some ideas that I will think about and share here if they seem to be good.

Yeah, go ahead and let us know what you think when you are done reading!

[spring.yu]

this is very well written review
What time dose it come out?
sorpport you

[Dr Bloggood]

this is very well written review
What time dose it come out?
sorpport you

It's out already. That's why I could write the review.

[blackhull]

So just out of curiosity, how many people here have formally studied debt? (Economics, finance majors / grads, credit traders, etc.?)

[Dr Bloggood]

So just out of curiosity, how many people here have formally studied debt? (Economics, finance majors / grads, credit traders, etc.?)

Not me.

But the people sitting at university teaching theory have no idea about the real economy anyways (see Bernanke, etc...). It's not about having formally studied this. 

[blackhull]

So just out of curiosity, how many people here have formally studied debt? (Economics, finance majors / grads, credit traders, etc.?)

Not me.

But the people sitting at university teaching theory have no idea about the real economy anyways (see Bernanke, etc...). It's not about having formally studied this. 

Alright, well clearly you have some radical opinions on this. Can you provide any backing for what you just said? That was an incredibly bold statement. Which research / set of facts led you to this conclusion? It seems like you've said anybody who worked in that industry "wouldn't know about it anyways" or something along those lines. I just don't understand how that can be.

I think if there is somebody more qualified than Bernanke, Yellen, etc. it is of the utmost importance that we find them and make sure they are in the right position.

[STT]

He is probably talking about self bias.   A university is part of the government system it then intends to study.   We could argue education is independent but the amount of money put out by government and the large amounts spent by universities I think puts them into a mutual relationship.    I think Timothy Geithner, Ben Bernanke and BHO have between them one years experience in the real world of business unfunded by taxes and yet they spent trillions with their high qualification and almost zero experience

clearly you have some radical opinions on this

Whats radical now used to count as common sense

[blackhull]

He is probably talking about self bias.   A university is part of the government system it then intends to study.   We could argue education is independent but the amount of money put out by government and the large amounts spent by universities I think puts them into a mutual relationship.    I think Timothy Geithner, Ben Bernanke and BHO have between them one years experience in the real world of business unfunded by taxes and yet they spent trillions with their high qualification and almost zero experience

clearly you have some radical opinions on this

Whats radical now used to count as common sense

I suppose he would have a good point on that front, but I still think that ultimately universities and corporations are very competitive and very decentralized, so it would require a global front to unify economists and get them on the same page for n amount of time. n being forever, in this case.

I guess I would shutup when somebody could tell me what running a business (microeconomy) has to do with stabilizing the global economy (macroeconomy). The problem, in my mind, is this hugely flawed idea that "countries work like households." Would you at least agree that this is probably where we're ultimately differing?

[STT]

I believe simple concepts can explain complex ideas so we probably differ there.   Theres not many households finances that could describe a country but there are points which relate
'simplicity is the ultimate sophistication' I think has been said a few times and I'd go with that over any modern political stance

My own take on macroeconomy or any larger picture that seems too unwieldy to even consider is to look at positive feedback and negative feedback scenarios.  I think natural effects outweigh anyone even a financial genius, even a superpower could get swamped by something entirely natural so Im looking at those systems that amplify especially via feedback.

  I do think QE fits into that and probably a few other things in effect now.  Can a strength also be a weakness, simple questions are applicable and I dont have a Phd but I will not defer to the FED on this
 Rickards often gives good examples and info on this theme and it makes sense to me

[blackhull]

Thanks for the answer, I think your approach actually makes some sense. I still think the macroeconomy can be managed somewhat well for a complex adaptive system, but like you said, who knows. That being said, I think it's very prone to <b>mis</b>management. If you don't know what's what, you are probably going to make things a lot worse. On that front, I think Bernanke is brilliant, and think formal education (in a university setting, in a professional setting, etc.) is all but necessary (with maybe the occasional exception).

[zxbball]

什么时候比特币才可以取代软妹币啊！

[Dr Bloggood]

I think Timothy Geithner, Ben Bernanke and BHO have between them one years experience in the real world of business unfunded by taxes and yet they spent trillions with their high qualification and almost zero experience

Yup, that's what I meant, the distinction between pure academics and people who have worked in economy.

[Dr Bloggood]

Alright, well clearly you have some radical opinions on this. Can you provide any backing for what you just said? That was an incredibly bold statement. Which research / set of facts led you to this conclusion? It seems like you've said anybody who worked in that industry "wouldn't know about it anyways" or something along those lines. I just don't understand how that can be.

I think if there is somebody more qualified than Bernanke, Yellen, etc. it is of the utmost importance that we find them and make sure they are in the right position.

My opinion is only considered radical in the real world, but on this board, I think a lot of posters would agree.

Nothing against academics who have actually worked in economy. What I was talking about are the pure academics, who prove again and again they can just draw pretty graphs on a blackboard and tell you about theory beautifully, but they can't manage anything in reality.

Examples:

We have had 5,5 years of unprecedented money creation and ridiculously low interest rates. The US money supply is many times as high as a couple of years ago (just google "US money supply" images for graphs), yet the economy is tanking (it is, don't believe what the mainstream media is telling you). But the FED keeps on doing what they are doing. What would you have said 7 years ago if someone told you interest rates would be kept near 0 for many years (many more to come) and the money supply quadrupled or whatever? You would have declared them insane.

That's where we are living now, in an insane economic reality.

So I think it's fair to say that something isn't optimal here and Ben isn't the genius Time Magazine made him look like when they gave him their "Person of the Year" cover...

Yellen admitted herself she had no clue about the bursting bubble of 2007/2008 and didn't see it coming.

Unfortunately, the right people will never be in the right position there, because they are not in the sheltered realm of politics, but out there in the real world. And also, it can be a very unpleasant thing to face the truth sometimes...

If I was president, I would make Peter Schiff or somebody like him Fed chairman, ha ha!

Another example: I was discussing inflation with so many friends who had studied economy, and they all seemed to believe the official inflation numbers. They had learned about this stuff for years, but couldn't even keep their eyes open for price changes at the supermarket. One good friend of mine, a clever guy, said he would ask his professor about this. A couple of weeks later we talked again and of course he told me his professor had assured him the official numbers are correct.

I don't even want to get into what happened when I told my friends about the massive gold price suppression (which is a proven fact), ha ha...

I have seen it again and again... those are just a couple of examples.

You seem pretty new to this way of thinking, you can check out websites like zerohedge.com, if you are interested. You get a lot of info there the mass media would never tell you...

[Dr Bloggood]

so it would require a global front to unify economists and get them on the same page for n amount of time. n being forever, in this case.

You are talking like a total academic there...

[Dr Bloggood]

什么时候比特币才可以取代软妹币啊！

Google translation from Chinese:
When Bitcoin currency can replace the soft sister ah!



Indeed, my friend...!

[blackhull]

Alright, well clearly you have some radical opinions on this. Can you provide any backing for what you just said? That was an incredibly bold statement. Which research / set of facts led you to this conclusion? It seems like you've said anybody who worked in that industry "wouldn't know about it anyways" or something along those lines. I just don't understand how that can be.

I think if there is somebody more qualified than Bernanke, Yellen, etc. it is of the utmost importance that we find them and make sure they are in the right position.

My opinion is only considered radical in the real world, but on this board, I think a lot of posters would agree.

Nothing against academics who have actually worked in economy. What I was talking about are the pure academics, who prove again and again they can just draw pretty graphs on a blackboard and tell you about theory beautifully, but they can't manage anything in reality.

Examples:

We have had 5,5 years of unprecedented money creation and ridiculously low interest rates. The US money supply is many times as high as a couple of years ago (just google "US money supply" images for graphs), yet the economy is tanking (it is, don't believe what the mainstream media is telling you). But the FED keeps on doing what they are doing. What would you have said 7 years ago if someone told you interest rates would be kept near 0 for many years (many more to come) and the money supply quadrupled or whatever? You would have declared them insane.

That's where we are living now, in an insane economic reality.

So I think it's fair to say that something isn't optimal here and Ben isn't the genius Time Magazine made him look like when they gave him their "Person of the Year" cover...

Yellen admitted herself she had no clue about the bursting bubble of 2007/2008 and didn't see it coming.

Unfortunately, the right people will never be in the right position there, because they are not in the sheltered realm of politics, but out there in the real world. And also, it can be a very unpleasant thing to face the truth sometimes...

If I was president, I would make Peter Schiff or somebody like him Fed chairman, ha ha!

Another example: I was discussing inflation with so many friends who had studied economy, and they all seemed to believe the official inflation numbers. They had learned about this stuff for years, but couldn't even keep their eyes open for price changes at the supermarket. One good friend of mine, a clever guy, said he would ask his professor about this. A couple of weeks later we talked again and of course he told me his professor had assured him the official numbers are correct.

I don't even want to get into what happened when I told my friends about the massive gold price suppression (which is a proven fact), ha ha...

I have seen it again and again... those are just a couple of examples.

You seem pretty new to this way of thinking, you can check out websites like zerohedge.com, if you are interested. You get a lot of info there the mass media would never tell you...

Base money is not money supply, it seems like you're confusing the two.

When does working "in the economy" inform your macroeconomic decisions? Like I said, complete and totally different things. This is like saying you need to know arcane technical requirements to be a superior general in wartime. Sure, some things can help, but grand unified strategy and leading a military would be totally different than what is required of an individual soldier on the ground.

You also didn't really show me how the economy was deteriorating, and expected me to trust your claims despite no proof being provided and directly contradicting what lots of hard data show.

Why are low interest rates and changes in the base money considered so "crazy"? You kind of made a logical jump there.

How does it work that you would probably use the laws of supply/demand to justify lots of these positions, but when your "supply" goes up (in your equation, not mine) nothing happens to value? Has the supply of money really increased, or is the monetary system more complex than that?

I actually "grew up" on ZeroHedge, thanks for the recommendation. I like it - it is thought provoking and frequently addresses things that many other people don't. I was able to learn quite a great deal from that website, but ultimately that site taught me so much about how to think about things that I now realize the huge flaws in it. Why is ZeroHedge so consistently wrong or incorrect? You claim the CPI is invalid, but how do you reconcile that with this? http://www.pricestats.com/us-series

[Dr Bloggood]

We could write thousands of pages of discussion about this, but I try not to spend my time like this, sorry. I was already a bit pissed at myself for making that last post so long.

You are of another opinion, and that's cool. Your last link was interesting, hadn't seen that one before.

[tabnloz]

Im just going past halfway of the book. So far, another good read. I was probably more gripped by currency wars as much of the content was new to me back then.

But anyway, I really liked the few pages discussing negative rates. The true bastardry comes in the harmless sounding terms 'QE' and Op Twist and all these other easy to digest soundbite names; at heart they are deliberate policies designed to sipher your money via inflation.

This is actually quite sickening. While destroying savers and the wealth of the regular joe was previously done by bank laws on deposit rates, it now just does it a little more subtly.

And therein lies a damn good reason to be in bitcoin.

[blackhull]

We could write thousands of pages of discussion about this, but I try not to spend my time like this, sorry. I was already a bit pissed at myself for making that last post so long.

You are of another opinion, and that's cool. Your last link was interesting, hadn't seen that one before.

True, no worries. Thanks for the good discussion.

Im just going past halfway of the book. So far, another good read. I was probably more gripped by currency wars as much of the content was new to me back then.

But anyway, I really liked the few pages discussing negative rates. The true bastardry comes in the harmless sounding terms 'QE' and Op Twist and all these other easy to digest soundbite names; at heart they are deliberate policies designed to sipher your money via inflation.

This is actually quite sickening. While destroying savers and the wealth of the regular joe was previously done by bank laws on deposit rates, it now just does it a little more subtly.

And therein lies a damn good reason to be in bitcoin.

Where is the QE-caused inflation, or really inflation at all? If you don't believe official stats then use MIT Billion Price Index, or something else. Unless you try to come up with somewhat technical excuses, it's just not there. Please provide data.