The death of money - James Rickards

The international monetary system has collapsed threetimes in the past hundred years, in 1914, 1939, and 1971.Each collapse was followed by a period of tumult: war,civil unrest, or significant damage to the stability of theglobal economy. Now James Rickards, the acclaimedauthor of Currency Wars, shows why another collapseis rapidly approaching-and why this time, nothing lessthan the institution of money itself is at risk.

The American dollar has been the global reservecurrency since the end of the Second World War. If thedollar fails, the entire international monetary system willfail with it. No other currency has the deep, liquid poolsof assets needed to do the job.

Optimists have always said, in essence, that there'snothing to worry about-that confidence in the dollarwill never truly be shaken, no matter how high ournational debt or how dysfunctional our government. Butin the last few years, the risks have become too big toignore. While Washington is gridlocked and unable tomake progress on our long-term problems, our biggesteconomic competitors-China, Russia, and the oilproducingnations of the Middle East-are doing everythingpossible to end U.S. monetary hegemony. Thepotential results: Financial warfare. Deflation. Hyperinflation.Market collapse. Chaos.

Rickards offers a bracing analysis of these andother threats to the dollar. The fundamental problem isthat money and wealth have become more and moredetached. Money is transitory and ephemeral, and it maysoon be worthless if central bankers and politicians continueon their current path. But true wealth is permanentand tangible, and it has real value worldwide.

The author shows how everyday citizens who saveand invest have become guinea pigs in the centralbankers' laboratory. The world's major financial players-national governments, big banks, multilateralinstitutions-will always muddle through by patchingtogether new rules of the
game. The real victims of thenext crisis will be small investors who assumed that whatworked for decades will keep working.

Fortunately, it's not too late to prepare for the comingdeath of money. Rickards explains the power ofconverting unreliable money into real wealth: gold, land,fine art, and other long-term stores of value. As he writes:"The coming collapse of the dollar and the internationalmonetary system is entirely foreseeable. . . . Only nationsand individuals who make provision today will survivethe maelstrom to come."