![]() ![]() His views on inflation and deflation emphasize the importance of consumer psychology, which helps to explain why it was so hard to control inflation during the 1970s. He describes the dangers that passive index investing can lead to, especially how it can make the financial system less stable. He is no fan of the practice of behavioral economics to lead people into outcomes that reflect the views of self-anointed experts. Rickards covers a variety of topics in Aftermath, reflecting the learnings from a professional lifetime in the financial industry. ![]() In theory, if you moved fast, you could have been paid $40/barrel to receive oil earlier in the pandemic He uses it to build his case that the global monetary system is more fragile than most people realize. How can it be possible to be paid to receive oil, a valuable commodity? Complexity theory offers the best explanation, and Rickards is a strong advocate. ![]() A recent example, which occurred after the publication of Aftermath, would be when the price of WTI (West Texas Intermediate) crude oil on the NYMEX futures exchange went negative earlier this year, several months after the outbreak of the COVID-19 pandemic. I like how Rickards uses complexity theory to describe the inner workings of the system, and to highlight how one event at one point in time can cause a drastic outcome in an apparently unrelated variable at a later point in time. Given that Rickards is far more wired into the global monetary system than I will ever be, and occasionally gets to speak with key leaders of that system, and is willing to share his insights in his writings, there was much that I learned from Aftermath. The big question, which Rickards attempts to address in Aftermath, is what comes next. The dollar still functions as the world’s reserve currency, but those days are numbered as the American empire, just like the British and Dutch empires before it, fades. Given that I can remember when the price of gold was $35/ounce and it is now above $1800/ounce, which means the dollar has lost 98% of its former value, I side with Rickards. Rickards is not merely predicting a collapse of the dollar-based monetary system: he states that the dollar is already collapsing, it’s just that few people in the general public realize it. Aftermath is one of a series of books which describe his views on the world economic and monetary systems, with specific advice to investors on what to do about the unfolding situation. Jim Rickards is someone who looks at the world from a real money perspective. The two graphs which I put in my Can you outperform a lump of metal? post illustrate this conundrum. It’s a fact that the economic world looks very different if you shift your perspective, from one which uses fiat currency as a base to one which uses “real” or “hard” money, such as the U.S.’s old monetary base up until 1971, gold. Tl dr: Tips for preserving savings and what might come next, as the dollar continues its collapse. Book review: Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos, by James Rickards ![]()
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