Saturday, September 20, 2014

The Death of Money - A Summary Review Part I

The Death of Money is the latest book written by Jim Rickards. Jim has extensive experience working with the US intelligence community to assess potential financial threats the country could face. He draws on that experience in the Death of Money to outline a variety of possible threats to the US that fall under the umbrella of financial warfare. 

Part I of his book lays this out for readers to consider. Here we will briefly review Part I of The Death of Money. Readers are encouraged to get a copy of The Death of Money and read it. The book is almost must reading for anyone who cares about the issues we discuss on this blog. It's available at book stores and places like

The Death of Money is a very detailed look at the current state of the present monetary system. The first part of the book lays the groundwork for the forecasts that follow in the latter part of the book. Anyone who has listened to Jim Rickards in interviews knows by now that the book forecasts that the current US dollar based monetary system will eventually come to an end and be replaced. Jim lays out the case for why he thinks the most likely replacement will be the SDR now used only at the IMF. The book is all about us being in a period of transition between the end of one era and the start of a new era.

In Part II of our review here, we will give a summary of his forecasts and his suggestions on how the average person can prepare ahead of time. But in this article we will talk briefly about Part I of his book. 

There is plenty of interesting and compelling reading in Part I of the book, but I am going to focus on the part that I found a little surprising. Part I basically provides a history of Jim's background in working with the US intelligence community after 9/11 to try and forecast possible threats to the US that might come from financial warfare (by terrorists or hostile nations). Jim details a number of different ways the US financial system could be vulnerable to attack. He talks about actual war gaming done to try and anticipate how these attacks might be carried out. It's all very interesting and includes everything from currency wars to hacker attacks on the markets. You cannot read this material without realizing that the US is clearly vulnerable to a variety of potential threats that are real.

I won't go into detail on all that here. The book covers it very well. What caught my attention was the concluding paragraphs of Part I. Below I will quote from page 64 so that I can explain what surprised me.

" . . .a financial war would present a different kind of crisis, with little or no physical damage. No officials should be dead or missing, and the chain of command should remain intact. Absent collateral infrastructure attacks, communications would flow normally."

"Yet the nation would be traumatized just as surely as if an earthquake had leveled a major city, because trillions of dollars of wealth would be lost. Banks and exchanges would close their doors and liquidity in markets would evaporate. Trust would be gone. The Federal Reserve, having used up its dry powder printing over $3 trillion of new money since 2008, would have no capacity or credibility to do more."

"Andy Marshall and other futurists in the national security community are taking such threats seriously. They receive little or no support from the Treasury or Federal Reserve; both are captive to mirror imaging."

Jim then outlines some steps the US could take to mitigate the threats described in the book. Unfortunately, Part I ends with this sad and disappointing statement:

"None of these remedial steps is under serious consideration by Congress or the White House. For now, the United States is only dimly aware of the threat and nowhere near a solution."

My comments:

Of all the information in The Death of Money I find the paragraph underlined in bold above the most surprising and troubling. We try here on this blog to convince readers that this whole topic is serious and they should view it as such. You simply cannot read Part I of The Death of Money  without realizing just how serious it is. 

It is obvious that there are all kinds of legitimate threats to the existing financial system. After 9/11 our government pulled together people like Jim Rickards to help assess the threats and propose ways to forecast problems and address them. A logical conclusion would be that we would be implementing those ideas and be all over this problem, given the risks and real threats out there.

But amazingly, we find Jim Rickards stating those who take the threats seriously receive "little or no support from the Treasury or Federal Reserve". And then he ends Part I by saying "For now, the United States is only dimly aware of the threat and nowhere near a solution." I find this the most surprising statement in a book full of surprising statements.

All this illustrates why we emphasize on this blog how important these issues are. Anything that leads to major monetary system change (and especially change forced to happen under crisis conditions like Jim outlines in the book) is very important to all of us. No one is going to be able to ignore the changes. They will impact people's daily lives. 

If you take nothing else from The Death of Money, you should take that to heart. It's why hours are spent working on the articles for this blog. It's why we hope as many people as possible will become informed on this topic and do whatever they can to prepare for whatever changes are coming. 

If no crisis ever comes, that will be great. But assuming it can't happen and making no plan at all to deal with one if it does come is beyond foolish in our view here. It is no different than owning a beach front home in the Gulf of Mexico and carrying no home owner's insurance under the assumption a hurricane will never happen. That would be foolish, right?

Now that we understand that we need to think about these issues, we will look at the rest of The Death of Money (Parts Two and Three) in Part II of our review of the book. This is where possible future scenarios are forecasted and suggestions on how to prepare for them are given. Interestingly, the scenarios mentioned in the book line up quite well with scenarios we have mentioned on this blog before having read The Death of Money.

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