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Currency Wars by James Rickards – Book Review

Currency Wars: The Making of the Next Global Crisis by James Rickards (Portfolio, November 10, 2011)

James Rickards’ first book, Currency Wars, explains the recent history of legal tender in an easy to understand manner, focusing on currency manipulation, the gold standard and other  fiscal models, such as Bretton Woods and the collapse of monetary management structures in the 1970s. Despite claims to the contrary, Rickards comes across as a gold bug, and the book leads the reader towards a conclusion that fiat money is inevitably doomed by its nature.

Rickards opens with a synopsis of a war game he participated in at the Pentagon’s request, describing how he was the only person in the room to really understand the history and mechanics of capital markets. We are then subjected to a replay of the battles and explanations of why Rickards’ tactics were not understood by the almost squeamish judges.

This is easily the book’s weakest part, and may put off some readers. Either take your penance and read through this section as I did, or skim it – as I wish I had.

Rickards goes on to identify three possible replacements for the dollar as a reserve currency: a multi-currency basket, special drawing rights and gold. His arguments are strong, but Rickards overstates the likelihood of the dollar’s demise. All told, I’m glad I powered through the beginning because, though I don’t always agree with Rickards, I do appreciate a well articulated and reasoned argument that seems fairly balanced to my non-Ph.D level knowledge of market history. I learned a lot from this book, and recommend it for its coverage of past and present monetary conflict, as well as its predictions for future currency wars.

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