Multiple Currencies

After reading this book I must say that I thoroughly enjoyed it and it is a recommended read for anyone looking to obtain financial information beyond what's being broadcasted on your local news station.  James Rickards (JR) is a very knowledgable, credible, and qualified individual who doesn't hold back the details of currency wars and the tactics nations engage in to force each other into submission.

OK - so we all know about how the US government lies about keeping its currency strong while simultaneously devaluing it...but according to research conducted by JR - our government also considers multiple threats against our currency from other nations and prepares for attacks from other nations.  Early in the book JR is asked to participate in this "military game" of a currency war that involves the Pentagon and other government elites.  At first the game is predictable and has a known outcome, until JR throws a curveball unbeknownst to the officials.  He states in the first chapter "If we were going to conduct a financial war, we needed people who knew how to use financial weapons - such as front running, inside information, rumors, "painting the tape" with misleading price quotes, short squeezes and the rest of the tricks on which Wall Street thrives."

Inserting his own "monkey wrench" into the game created a little chaos, but it allowed the government to see the "blow back" from certain scenarios initiated by JR.  Furthermore, in the book JR describes how signficantly weak the US dollar has become and how the Federal Reserve's money printing (QE1, QE2, Operation Twist, QE3, etc) could lead to price bubbles larger than the one we just experienced with the housing bubble....causing hyperinflation and even worse fall-out than we're already experiencing.  

Unfortunately what JR describes is not a fictional story, it's currently happening today and people all over the world are experiencing inflation, loss of employment, high gas prices, high food prices, etc.  In closing, JR predicts that there are only a few choices that will spell the "endgame" for the currency wars we're currently undergoing: 

  • There will be more paper - in the form of multiple reserve currencies, or SDRs (special drawing rights)
  • We may eventually return to the gold standard
  • Chaos

There you have it - according to James Rickards these are the few choices left for our government (and other governments) have left to pursue in order to return their country to a sound monetary and fiscal policy.  

A very interesting book and a must read for everyone...regardless if you're financial savvy or not!