The Road To Ruin by James Rickards
The Road to Ruin: The Global Elites’ Secret Plan for the Next Financial Crisis is a book that was published in 2016 by James Rickards. As some of you may remember last month I posted about one of his other books called The Big Drop. It was such a good book that I decided to read another book by the author.
The Road To Ruin started out as a complimentary book to The Big Drop. It talked a lot about how economies work and how all of the economies of the world are intertwined. The author goes back and explains some of the financial crises that have happened over the past couple of decades. He paints the picture that each crisis is followed by a larger crises. Which leads him to the point that the next crisis will be larger than any crises that we have seen before.
James Rickards does a great job of explaining about the different studies of finance from economist like; John Maynard Keynes and Milton Friedman, to just name a few. He explains how these different models work and then gives his opinion on why these models do not work in the current economy. Rickards subscribes to the idea of complexity theory, which was derived from physicist. In this school of thought it states that an economy is a complex system that can be affected by a lot of different things that may not even be thought of as part of the system.
I tend to side with the opinion of the author. As an example, what if a large American oil company has derivative contracts for an electronic company that is manufactured in a country with an emerging market. These electronic devices generate most of their revenue from being imported into America. If the dollar weakens, the electronic company may no longer find it advantageous to import their electronics to America. History would say that the weakened dollar would lead to an increase in commodity prices. Now, if that isn’t complex enough, what if that country was attacked and their currency weakened as well. What if this caused investors to sell the stock of the electronic company?
As we see from this made up example it is a very complex system. It is never as cut and dry as it seems.
The author also likes to speak on a concept that he refers to as Ice9. This concept is pretty simple. The global elite have consolidated a lot of the regional banks into “To Big To Fail” banks. With Trillions of dollars currently sitting in these banks when the next crisis happens they will be able to freeze your money very easily. It is not that crazy of a concept because they already limit how much money you can get out an ATM. $300 a day regardless if they are opened or closed. When the next crisis happens what if the banks only allow you to withdraw $300 a week? How would you be able to stop them?
Rickards also talks about Special Drawing Rights (SDRs), which the author believes will be the next world currency after the U.S. dollar crashes. It will be the type of money that the IMF lends to countries to help them stabilize their economy. It really isn’t that far fetched. There is no real monetary value to a countries currency. It is not backed by gold. The only thing that adds value to a currency is the confidence that people have in that currency. So instead of a U.S. dollar being the world standard, why not make it a currency not directly associated with any one country?
In conclusion, The Road To Ruin does detail a lot of historical information on finance. I do realize that towards the end of the book it borders on conspiracy theory but it is the view of the author who wrote the book. I think the author does bring up some very valid points. If his ideas ever see fruition during my lifetime is a very different story. I found the book to be very interesting. It was very hard to put the book down but every night when I did I would lay down and just absorb everything that I had just read. I highly recommend the book to anyone interested in the future of finance.
Have you read this book? If so I would love to hear what your opinion is on it!
So far I have been keeping up with my goal of reading one book a month! Look for another new article about a different book next month!
As always I look forward to reading all of your comments and questions, until then….. happy investing!
-Jason from MoreDividends.com
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Hi Jason, Sounds interesting. Thanks for bringing it up and the brief book review. Tom
Tom from Dividends Diversify recently posted…Let’s Talk Tech: IBM
Thanks for stopping by Tom. It was a very interesting read. If you have never read any of James Rickards work then I would highly recommend that you check out one of his books.