A bit of a dry read, but has very valuable information in it. I learned a lot from this book regarding inflation, deflation, and how changing variables impact prices. There's a lot of US economy history here, and one thing I learned about was when US citizens were forced to hand over their gold to the govt. lest they be jailed or fined an exorbitant amount. They handed it over because they were desperate for change and scared. Anyway, will need to read this again to really get all the information. TL;DR Again, good book, just dry and chewy. You would have heard about wars being fought between countries using force, weapons, and intelligence where the mighty one mostly prevails. But such military wars come at a high cost of human lives, physical destruction, emotional distress, economic hardships, & the indirect effects that linger on for generations to follow.In addition, a country that enters combat doesn't just decide to go on war at a spur of moment. Rather it’s an outcome of serious & lengthy deliberations of its leaders & requires a careful assessment & analysis of its military strength, outcome scenarios, existing economic conditions, and most importantly the support & assent of its citizens. On the other hand, a CURRENCY WAR may be initiated with no military activation, no act of legislature, & no direct approval of a nation's people or its government. James Rickard’s book “CURRENCY WAR” provides an detailed and engaging view of how the game of "CURRENCY WAR" is played by walking us through experimental warfare strategies that he and his team along with the collaboration of US military and CIA had set out to demonstrate and validate and by drawing real-life examples of major “CURRENCY WARs” that have occurred in the recent times. So, what is a CURRENCY WAR? - In its simplest form "CURRENCY WAR" is the "Manipulation of Currency". Strong CURRENCIES are only strong relative to other CURRENCIES. It is the potential for this relativity relationship being manipulated that can lead to currency wars. CURRENCIES manipulations can be in the form of Government actions, such as: Competitive devaluation Coordinated or uncoordinated devaluation Sovereign debt maneuversThe terms "CURRENCY WAR & Economic war" may seem similar, but are different, as Economic wars are played in the form of: Trade embargo, Boycotts, Sanctions, Tariff discrimination, Freezing of capital assets, Expropriation, etc.But wait? What? You didn't realize there was a CURRENCY WAR? Well, that's the very character of a CURRENCY WAR, that it’s “insidious & covert”. As compared to traditional wars, currency wars are highly effective & cause indirect long term financial destruction which is the backbone of any nation’s economy.James Rickard’s “CURRENCY WAR” can be divided in 3 parts:Part I - In the first part Jim demonstrates the exercise of a pseudo CURRENCY WAR conducted at the Warfare Analysis Laboratory near Washington D.C. This exercise was first of its kind experiment, where several dozen experts from the military, academic & intelligence communities were assembled to play the game of global CURRENCY WAR.Each player represented as head of state of different nations. The goal was to assess & test America’s readiness & financial standing if a CURRENCY WAR was to start. The current turmoil of debacles that led to a declining dollar, increasing US debt, high domestic/military expenses pointed to future signs of dollar being replaced by gold & such a scenario would be more disastrous than a military-attack.Jim walks the reader through a maze of a hypothetical currency war, where each player (i.e. Nation) exhibits its strategies & financial power that are in its arsenal against its opponent nations. This exercise showed the inherent weaknesses of US currency & economy. Additionally it revealed the relative strength of other currencies such as the Chinese Yuan & Russian Ruble.Part II - The second part is focused on the past two "CURRENCY WARs" fought in the early & latter half of 20th century. Richard provides an interesting historical account of the global monetary twists & turns, ups & downs that marked much of the twentieth century. The first currency war lasted from 1921 to 1936, & the second currency war – from 1967 to 1987. He analyzes the interests & motivations of nations that got involved in those currency wars & showed the use of nations financial tools such as "competitive devaluations & other interventionist actions of government" for the first time. Both "CURRENCY WARs" occurred during the post-Classical Gold Standard period that started after World War I when gold was displaced from its day-to-day circulation to levels never seen before.Part III - The last section of the book would come as a surprise to readers as it presents the authors view that the world is presently in the midst of another Currency War (i.e. Currency War III), that has started since 2010. Richard speculates on multiple outcome scenarios & predicts one of the following to be the final outcome: Paper, Gold or Chaos. The most likely candidates involved in a currency wars are between countries whose economy is driven largely by import/export (i.e. US, China, Brazil, Russia, etc.). One such example is the recent proposition made by Brazil, that, “Countries would competitively devalue their currencies to try to get a trade advantage over their rivals". In the past, such a thought wouldn't seem overly incorrect, as similar steps were taken during the Great Depression for recovery. But in today's highly volatile market & frequent power shifts such a strategy would be highly risky & a currency war would lead to a trade war. Countries would not only start printing more currency & flood the market to get an edge; they'll also leverage other financial weapons such as placing trade barriers with other countries, thereby starting a chain-reaction of sorts that could develop into a financial tsunami.Rickard then takes his readers on a whirlwind world tour of major international trading hubs around the globe & explains their role in today’s currency trading market. He starts with Dubai, where “Espionage, assassination, gold, currency & an international mix of actors at the crossroads of the world have made it the Casablanca of current times; followed next by” Moscow, which uses its energy supremacy as a wedge to forge a regional economic bloc with a regional reserve currency, of its Ruble;” & lastly to Beijing, where he sees the highest amount of risk & looks upon China’s hard asset endgame as one more ticking time bomb for the dollar.He then turns to domestic matters with exemplary chapters such as “The Misuse of Economics,” that talk about “Washington & Wall Street — the Twin Towers of Deception” & then on “Currencies, Capital, & Complexity” with an elaborate primer on prospect & complexity theory.It’s not that Jim’s analysis is 100% correct, as there remain certain flaws in this line of thinking:- The biggest problem is that not everybody can play the depreciation game at the same time: As one country's advantage is the others' disadvantage. When a finite asset such as money is the end goal there cannot be a win-win situation for opposing teams. - Then there is the common plague of inflation associated with currencies around the world — dollars, yen, and pounds, by which each currency has been consistently losing its purchasing power. In normal times, inflation runs around 3%. But if a currency war erupts, it could easily run at 10% to 50% per year. So, the bleeding is consistent, it’s the intensity that gets impacted by "CURRENCY WARs".In summary, Currency War reads like a suspense thriller & I highly recommend the book for the wealth information & knowledge it provides. Jim has woven details about the role & responsibilities of global financial institutions, such as the “IMF, World Bank, G7 & G20 summits”, whose primary role is of a big-brother, but have been relegated to serve the interest of few countries only. Overall, the book is a treasure cove for readers curious to learn about currency trading and its negative and positive effects.Finally, for me the most valuable take-away from the book was to realize the high importance of "GOLD" & the critical role it will play in the future global trade. I haven't been more convinced than this about can just say - "The amount of profit potential in Gold is unmatched & highest compared to any other capital investment you might invest in the coming future". So invest as much as you can in GOLD.........
What do You think about A Guerra Das Moedas (2014)?
Great read. Intriguing tale of currency manipulation and leveraging to destabilize countries.
—Cenna
Shines light on the urgent need to remove excess unnecessary risk in global markets
—Rocky
