Five Books Jim Rickards Recommends You Read Right Now
We begin today’s reckoning with a bold statement: A list of must-reads from Jim Rickards is to investors what the latest mushy title added to Oprah’s cult-followed book club is to middle-aged housewives.
Besides, now that it’s starting to warm up (at writing, it’s a balmy 66 degrees in charm city) you’re probably daydreaming about lounging by a pool, leisurely making your way through that never ending pile of books on finance, money and economics.
At least, that’s the case if you’re as big a goober for this stuff as we are.
That is the case… right?
Without further adieu… five must-reads from Jim Rickards.
Each will help you better understand how your investments fit into the complex financial system.
At the very least, they’ll make better conversation at tomorrow night’s cocktail party than your eight year old’s dance recital.
Into the breach we go…
Money and Tough Love: On Tour With the IMF
by Liaquat Ahamed
What’s in it for you: Read for an undercover glimpse into the secrets of the notoriously tight-lipped IMF. Garner a better understanding of its functions and mystique, and how it can impact your future financial security. As Jim puts it, “Ahamed’s book is a good chance to meet the financial world’s fire department before the next great fire.”
Page Count: 208
Where to get it: Available to you right here through Laissez Faire Books ($40.00)
What Jim Has to Say: “Washington, D.C. is infamous for its three-letter agencies that no one knows what they do. One of the most powerful, influential, and secretive of these agencies is the International Monetary Fund (IMF).
Surprisingly, the IMF isn’t even part of the US government, but part of an emerging trend of global governances that are only accountable to the elite few of central bankers, heads of state, and finance ministers.
Though complex to grasp, the IMF isn’t really a fund at all, but serves as the central bank of the world, borrowing from and making loans to countries around the world. That, and actively keeping outsiders like you and me in the dark about what’s really going on.
That’s what makes the publication of Money and Tough Love so surprising; given the culture of secrecy, this book is the most detailed account you’ll find for a behind the scenes look at IMF headquarters.
This book is great for anyone with even the slightest interest in the inner-workings of the international monetary system, and will make you better acquainted with this hidden source of inflation.
Not surprisingly, it wasn’t easy for Ahamed to get the IMF to cooperate. In the opening section, he writes:
I soon discovered that gaining access to the world behind its doors would not be easy. The fund is the repository of many secrets, which it guards ferociously. It does its work behind the scenes, out of the public eye, and has a history of being wary of the press… The Fund benefited from a certain mystique that could be lost by too much openness.
What follows is a revealing account that’s part history, part economics and part James Bond as Ahamed travels the world from Washington to Mozambique, describing IMF interactions with other members of the global power elite.
This book serves as an excellent guide to the day-to-day business of the IMF, as well as its power to make or break sovereign governments with loan decisions in times of financial distress.
This book is not only highly accessible, but also timely and relevant. The IMF has always been a smoke and mirrors show, but its significance to global finance has fluctuated over the years.
Now, the IMF is poised to enter its most powerful stage yet as we approach our next financial panic.
The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class
by Frederick Taylor
What’s in it for you: Learn to detect the warning signs of hyperinflation – before your savings are wiped out – by reading about the history leading up to Germany’s economic demise in 1921.
Page Count: 432
Where to get it: Available on Amazon ($23.11)
What Jim Has to Say: When you think of “Weimar,” what other words come to mind? Almost everyone would say hyperinflation.
Few people know the detailed history that led to Germany’s economic catastrophe. Yes, we know that Germany was coming off the heels of a WWI defeat and was facing hefty reparations to France and the UK.
But to understand exactly what happened, and why the likelihood of a repetition in America isn’t as laughable as you think, Jim Rickards highly recommends The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class, by Frederick Taylor.
He tells us:
This is the best and most thorough account of the Weimar hyperinflation yet and is likely to remain the definitive history… Taylor’s book is a must-read if you want to know about the warning signs of hyperinflation before its most virulent stage wipes out your savings and pensions.
While other books on Weimar focus primarily on Rudolf Havenstein, the director of the Reichsbank, the central bank of Germany, Taylor takes aim at the political leadership at the time who refused to compromise on the necessary structural reforms that would restore much needed growth in the German economy, so the country could finally begin dealing with its overwhelming debt burden.
This account offers historical insight to something that happened in the past, but may repeat in the United States under strikingly similar conditions.
This insight is paramount as we all try to assess the risks of hyperinflation in our own country. The US economy’s main problems are too much debt and too little growth, which are identical to the issues plaguing Germany in 1921.
The situations could not be more similar; primarily structural problems and politicians who refuse to compromise on solutions, who instead look to the central bank, which ultimately accommodates the politicians.
Or, fiscal dominance. While we are not yet at the point of no return, something very similar to 1920s Germany could be brewing in the US today.
When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany
by Adam Fergusson
What’s in it for you: Gain a better understanding of the extreme social and economical series of events surrounding the Weimar hyperinflation.
Page Count: 288
Where to get it: Available right here through Laissez Faire Books ($14.95)
What Jim Says: This account of the Weimar hyperinflation was published in 2010 to excellent reviews, and shows readers what happens when a nation’s currency is beyond recovery.
Fergusson chronicles events in extensive detail that demonstrate the severe social impact of hyperinflation, like anecdotes about food riots, starvation, social unrest, and suicide as Germany’s finances imploded.
While Taylor’s book (see number II) gives you the ‘why’ of Weimar, Fergusson’s When Money Dies provides the ‘what’ and ‘when,’ and serves as a sobering moral tale of what could be, particularly in the wake of quantitative easing in our electronic era.
The Forgotten Man: A New History of the Great Depression
by Amity Shlaes
What’s in it for you: An excellent history read about the Great Depression, Hoover, and FDR that also serves as a blueprint for where United States politics and economy could be headed.
Page Count: 512
Where to get it: Available on Amazon ($14.39)
What Jim has to say: The core period of the U.S. depression, 1929–1940, covering President Hoover’s single term, and the first two terms of President Franklin Roosevelt, is the object of intensive interest by historians and scholars, even to this day.
The conventional narrative of the Great Depression is that Hoover and the Federal Reserve are the villains who committed a series of policy flubs that initially caused the depression, and then failed to do anything to alleviate it.
Roosevelt is then painted as the hero who swooped in to save the country and lead us back to growth with activism, government programs, and a lot of spending. It is this narrative that has since served as the blueprint and justification for government spending.
So how do you cure a depression? Only through structural changes in fiscal policy and regulation. Whether we like it or not, the US is in a depression as I write, and it’s one we can’t shake because those structural changes have not happened.
The last depression was more than 80 years ago, so almost none of us have a living memory of what a depression is like, which underscores the importance of the historic study of depressions. According to Jim Rickards, there is no finer history of the Great Depression than Amity Shlaes’ The Forgotten Man.
In her book, which serves as a kind of alternative history much closer to the truth of what happened in the 1930s, Shlaes shows readers that this narrative is almost entirely wrong. In fact, she tells us how there was a lot of continuity between the Hoover and Roosevelt administrations; both were activists and interventionists.
The book maintains a balanced approach. Shlaes describes in meticulous detail the growth that was achieved and the jobs that were created by FDR’s programs, as well as offering praise for the many artistic, literary and architectural achievements coming from government sponsored programs for writers and artists.
More than a good history read that might put you to sleep, the book carries important economic lessons for investors and policymakers today. The U.S. continues to struggle through a new depression and grapple with uncertainty in policies like Obamacare and environmental and internet regulation. Changes in labor laws have once again caused capital to go on strike.
This new depression may be a long one, and it’s something you’re going to want to be prepared for. As Jim puts it, “Shlaes’ excellent book is a great work of history, but an equally great guide to where we are today, and where we may be heading.” We recommend it to you.
by Neil Johnson
What’s in it for you: Understand how scientists use Complexity to predict and solve unique, random problems of all kinds, like the patterns of modern jazz, pandemic viruses, or even terrorist attacks.
Page Count: 256
Where to get it: Available on Amazon ($13.00)
What Jim says: Complexity theory is Jim’s unique way of analyzing the financial markets.If there is one book that Jim recommends as a solid introduction to complexity theory, it would be Simply Complexity: A Clear Guide to Complexity Theory by Neil Johnson.
Complexity theory is a bit like a puzzle that can explain anything from stock market crashes, coin flips, and traffic jams, to the growth of tumors and predicting shopping habits.
Complexity is considered by many to be the single most important scientific development since general relativity. Scientists use it to find order in seemingly random interactions, and it is the key to predicting and solving anything and everything.
The Big Drop: How to Grow Your Wealth During the Coming Collapse
by Jim Rickards
What’s in it for you: Okay… we added this one. Jim’s too humble to add his own work to the list. But if you read, one book this year, you should make it The Big Drop.
As our founder, Addison Wiggin said “Jim’s on a mission the Daily Reckoning supports with all of our might. on to help everyday Americans cut through the deception they’re being fed by political figures… to avoid the next collapse that’s coming… and to never suffer through the kind of hardship he personally experienced.
Until now, he has only provided ongoing intelligence service to his high net worth client sna members of the U.S. intelligence community. But now, he reveals all
According to Jim ‘there are survival strategies you can use., You are not helpless. You can protect yourself. You can definitely see the crisis coming using the warning signs present today.”
Price: FREE. Yes, you read correctly my friend, free.
Where to get it: Available only right here. In fact, Jim’s elected not to feature it on Amazon or in any bookstore. His reasons are outlined, right here.
What Jim says: And we quote… “I’m very excited about this. My last book, the death of money came out about a year ago… but a lot has happened in this year. Just think about everything that’s happened in the last year. So, those books are fine but it’s so good to have a new book that updates the reader and covers current developments.”
To hear Jim’s full explanation about what’s new in The Big Drop, simply watch the video, below:
À tout à l’heure (see you later!),
for the Daily Reckoning
P.S.Jim regularly writes a column he dubs the “Reader’s Corner” in his monthly newsletter, Strategic Intelligence. It’s a “feature that we use to depart from economic analysis” he explains “and provide content of more general interest. It could be a book recommendation, a relevant personal experience or an anecdote.” You can claim Jim’s latest book free — and test-drive Strategic Intelligence at no charge, by clicking here.