As we arrived at the lab that rainy March morning for the war game, the first thing I noticed in the parking lot were rows of high-performance motorcycles.”
~ James Rickards, Currency Wars, Chapter 1
Written by Bryan Lutz, Editor at Dollarcollapse.com:
SuperTexts are books that seem to “cover it all.”
In other words, if you want know about the US dollar and how it’s been used as a weapon to dominate the global financial system, just read this one.
Here’s where I checked off SuperText number seven.
So I picked up his first book.
Today’s is…
Currency Wars: The Making of the Next Global Crisis by James Rickards. (Not an affiliate link.)
The book was published in 2011.
Rickards is a lawyer and investment banker who spent thirty years in capital markets, including a stint at Long-Term Capital Management during its 1998 collapse. He has advised the Director of National Intelligence and the Office of the Secretary of Defense. He is, in other words, a Wall Street veteran who has spent the second half of his career inside the U.S. national security apparatus.
That dual background is what makes the book different from anything else in this list.
I won’t summarize all of it, but I will tell you about the scene that has stuck in my head ever since.
The book opens with a story almost no one had heard before 2011. In the late winter of 2009, about sixty experts arrived at the Applied Physics Laboratory, a top-secret weapons research facility on four hundred acres of former farmland between Baltimore and Washington. The Pentagon had invited them to play a war game.
The rules of engagement prohibited the things war games normally turn on.
No bombs. No missiles. No drones. No kinetic weapons of any kind.
The only weapons allowed were financial.
Stocks.
Bonds.
Currencies.
Commodities.
Derivatives.
Six teams: the United States, China, Russia, Europe, East Asia, and a private-sector group of banks and hedge funds. About forty players, sixty observers from the Treasury, the Federal Reserve, the CIA, and the uniformed military. The game ran for two days. Rickards helped design it.
That’s the scene that opens the book. The Department of Defense, on a rainy morning in 2009, war-gaming an attack on the U.S. dollar.
Ever since I read it, I have been unable to read the news the same way.
When the BRICS countries announce a new payment rail. When China increases its gold reserves by another few hundred tonnes. When the UAE asks the U.S. Treasury for an emergency dollar swap line because of a Middle East war. None of it surprises the reader of Currency Wars. Rickards already showed you the room where uniformed officers and capital-markets veterans sat down together and treated currency as a weapon.
The book tracks three currency wars across a century. Currency War 1, the 1921 to 1936 round that helped produce the Depression. Currency War 2, the 1967 to 1987 round that ended Bretton Woods. Currency War 3, which Rickards dated as starting in 2010 and which is unmistakably still running fifteen years later.
He closes with four possible endgames. He calls them the four horsemen of the dollar apocalypse.
A few honest notes. The book is about 290 pages and Rickards is an actual stylist, which makes it the most readable book on this list after Bonner. The first two chapters on the war game are worth the price of the book on their own. The middle section on monetary history is excellent. The final chapters on complexity theory and the four endgame scenarios are dense but rewarding. Still in print. New for $15 to $20, used for under $10.
If you read one book to understand why the news of the next five years will read the way it does, this is it.
Currency Wars is the SuperText for today.
Read it, and the headlines will start to look like moves on a board you didn’t realize was being played.
It’s SuperText #7.
