On today’s edition of Coffee and Markets, Pejman Yousefzadeh and I are joined by James Rickards, author of Currency Wars: The Making of the Next Global Crisis. We discussed why the Federal Reserve is wrong to keep interest rates at zero, concerns about inflation, and the need for increased regulation of American banks.
In 2008, Rickards, an investment banker with extensive experience in hedge funds, was invited to participate in a seminar sponsored by the Department of Defense, which examined the safety of U.S. sovereign wealth funds in the case of economic warfare. As Rickards explains, “Sovereign wealth funds are huge investment pools established by governments to invest their excess reserves.” He participated in further seminars that addressed the impact of futures markets, derivatives, and more, on strategic commodities such as oil, uranium, copper, and gold. Rickards’s first book is an outgrowth of his contributions and a later two-day war game simulation held at the Applied Physics Laboratory’s Warfare Analysis Laboratory. He argues that a financial attack against the U.S. could destroy confidence in the dollar. In Ricards’s view, the Fed’s policy of quantitative easing by lessening confidence in the dollar, may lead to chaos in global financial markets. Possible strategies for dealing with such a situation include a return to the gold standard. Though the book will no doubt interest policymakers, even non-experts will be rewarded for their efforts
- *Currency Wars* (marginalrevolution.com)
- JAMES RICKARDS: The Next Global Crisis Has Already Begun (businessinsider.com)