Book Review: The Death of Money
Title: The Death of Money
Author: James Rickards
Topic: The coming collapse of the international monetary system
passages of interest:
"Gold is not a derivative... Gold is not a commodity... Gold is not an investment... Money is gold, and nothing else."
"The first myth is that gold cannot form the basis of a modern monetary system because there is not enough gold... The problem in this scenario is not the amount of gold, but the price." (emphasis his)
"The New York Stock Exchange and the SEC claim they have safeguards designed to prevent this kind of runaway trading... Those mitigation techniques do not stop the financial warrior because he is not looking for bargains or profits."
Price discovery is the key to any market transaction. (Goodhart's Law, 1975)
"Adam Smith, Freidrich Hayek, and Charles Goodhart all concluded that central planning is not merely undesirable or suboptimal; it is impossible." (emphasis his) "This means that economic systems cannot approach optimality but that optimality emerges from economic complexity spontaneously rather than being imposed through central banks by policy."
The Federal Reserve has based all its models on its own interventionist policies - rather than a common baseline. Thus they are inherently flawed.
"The Federal Reserve's zero-interest-rate policy causes a $400 billion-per-year transfer from everyday Americans to large banks."
"Debt used to finance government spending is acceptable when three conditions are met: the benefits of the spending must be greater than the costs, the government spending must be directed at projects the private sector cannot do on its own, and the overall debt level must be sustainable. These tests must all be applies independently, and all three must be satisfied."
He also talks about:
The Chinese economy and its fundamental instability due to policy.
The emergence of the Euro.
The IMF and Special Drawing Rights (SDR's)
Bretton Woods
The Strong Dollar policy of Volcker/Reagan following the near collapse of the dollar by Nixon
BRICS and BELLS
How the Fed's policies have made us enemies with nearly every other major power due to inflation
How we have already passed the crossroads point at which a policy shift could have avoided collapse.
... and more
Author: James Rickards
Topic: The coming collapse of the international monetary system
passages of interest:
"Gold is not a derivative... Gold is not a commodity... Gold is not an investment... Money is gold, and nothing else."
"The first myth is that gold cannot form the basis of a modern monetary system because there is not enough gold... The problem in this scenario is not the amount of gold, but the price." (emphasis his)
"The New York Stock Exchange and the SEC claim they have safeguards designed to prevent this kind of runaway trading... Those mitigation techniques do not stop the financial warrior because he is not looking for bargains or profits."
Price discovery is the key to any market transaction. (Goodhart's Law, 1975)
"Adam Smith, Freidrich Hayek, and Charles Goodhart all concluded that central planning is not merely undesirable or suboptimal; it is impossible." (emphasis his) "This means that economic systems cannot approach optimality but that optimality emerges from economic complexity spontaneously rather than being imposed through central banks by policy."
The Federal Reserve has based all its models on its own interventionist policies - rather than a common baseline. Thus they are inherently flawed.
"The Federal Reserve's zero-interest-rate policy causes a $400 billion-per-year transfer from everyday Americans to large banks."
"Debt used to finance government spending is acceptable when three conditions are met: the benefits of the spending must be greater than the costs, the government spending must be directed at projects the private sector cannot do on its own, and the overall debt level must be sustainable. These tests must all be applies independently, and all three must be satisfied."
He also talks about:
The Chinese economy and its fundamental instability due to policy.
The emergence of the Euro.
The IMF and Special Drawing Rights (SDR's)
Bretton Woods
The Strong Dollar policy of Volcker/Reagan following the near collapse of the dollar by Nixon
BRICS and BELLS
How the Fed's policies have made us enemies with nearly every other major power due to inflation
How we have already passed the crossroads point at which a policy shift could have avoided collapse.
... and more
The IMF all ready has the right by UN vote to produce a global currency.
One possible future is that all gold holding countries, primarily US, England, Germany, Russia and China may form a board of a global central bank which produces its own currency, the IMF would become this bank.
Great read, I would recommend to everyone