If any Kossacks wish to gain a powerful insight into national and global economics, this book would be a good place to start. I highly recommend it, with one proviso. . .
Jim Rickards is an interesting combination of personal background and education. I have always thought of him as a conservative hack, but I got the book for free, so I began it and continued to the end with increasing fascination. He is definitely not a conventional economist, and his evaluation of the economy is insightful and clearly presented. He is smart enough and successful enough and has sufficient experience that his statements cannot easily be discounted.
The proviso: The only failing of his book is in the two occasions where he outlines the "structural" changes necessary to get things back on track. It is the conservative businessman's wish list, and if implemented would restore the 1890's economy in a heartbeat, a model we could call "neo-robberbaronage." Rickards may have had to include this cant if only to get the far-right crowd looking over his shoulder, or he may actually believe eliminating all taxes, all regulation, all environmental oversight, and (of course) Obamacare will actually restore prosperity to the economy for everyone.
Whichever it may be, I urge the Kossack reader not to hold it against him and to disregard these two small portions, like taking the poison glands out of a Fugu fish, and make the most of the rest which is an excellent exposition of the economic tangle we are in. The rest of the book is worth it.
The prevailing school of economics, found in universities and government is called Neo-Classical. You don't actually need to know anything about it other than it is a complete failure. It cannot explain past occurrences, crashes and the like, and it cannot predict the future. It still cannot explain the depression we are now in. Jim Rickards put it clearly, these clowns are making judgments and taking actions based on a faulty economic model. For instance, they assume without question that any economy is self correcting and will always return to stability if left on its own, but they don't want to talk about why ours has not already done so. The suggestion that economic systems have inherent instabilities, potentially detrimental, which need to be restrained, usually generates a screaming fit. These "experts" mindlessly adhering to theories proven false half a century ago are a large part of the problem. This is only one of their faulty perspectives.
What Rickards is suggesting here is not merely a paradigm shift but a total rewrite of economic theory from the ground up. He is not the only one heading in this direction. Australian economist Steve Keene has been singing the same song for some time now. Both men endorse Irving Fisher's theory of debt deflation which has been consistently ignored by conventional economists up to now. There is a lot of pig-headed inertia to overcome, but one more global catastrophe might do it.
Why would any Kossack want to read a book like this? I think the big take-away is the author's description of deflation and the lurking menace it represents. This is a phenomenon which almost no one alive now has ever experienced. Rickards' description of the current state of our economy presents it as balanced on a knife edge between the gaping maw of deflation and the massive inflation which the Fed is pumping to counteract it. His view is first that the people in charge don't actually know what they are doing and are winging it. Second, he feels that the efforts to stabilize the economy will fail, inflicting us with runaway inflation, massive deflation, or both one after another.
This book may look like Chicken Little wrote it, but in fact no one is particularly good at predicting the future, not Jim Rickards either. The strength of his book is the clear and accurate description of our current economic state and how we got there. What result it may lead to and his financial recommendations to survive it will be proven correct or not by history, but they are designed to confer flexibility no matter what happens. They should be given a serious look by anyone who has wealth to protect in uncertain times.
Unresolved problems call for solutions. I usually hesitate to write about economics because I know that subject is usually about as interesting as watching paint dry, partly because economists want it that way. After reading this book, though, I hope the thoughtful Kossack will have some ideas, and a robust discussion can begin.
One last thought Rickards repeated several times: In times of massive loss, whoever is better prepared and loses the least will wind up on top when it is all over. I am sure he is thinking of people like himself, but to my mind, a lot of those survivors should be Kossacks.
Tolle Lege (Pick up and read)