Darien Author Sheds Light on Currency War

DARIEN, Conn. – Darien author Jim Rickards writes that a war is going on — and the battlefield is the international monetary system. Rickards’ book “Currency Wars” argues that American economic policies and the decreasing value of the dollar could lead to another financial crisis.

A currency war occurs when a nation devalues its currency and tries to export cheaper, he said. “It sounds good, but it never works out," Rickards said. "What happens is other countries retaliate and cheapen their currency.”

We are in the middle of the third currency war of the last century, Rickards says. The first occurred in the 1920s and ‘30s and the second in the ‘70s and ‘80s.

The book outlines four possible outcomes of this war: The U.S. currency becomes worth much less more than other currencies such as the Euro or Chinese currency, a new kind of global currency emerges known as special drawing rights, the gold standard returns or a full financial crisis erupts.

Rickards wanted to make the book readable and easy to understand. “I thought there was a lot of important things happening in the international monetary system, so I wanted to take it and put it in plain English so people could read it without a PhD,” he said. “A lot of people know something is wrong, but they don’t know what it is, so I wanted to provide them with an intellectual toolkit to help them understand.”

He has more than 30 years of experience in economics and advises the Department of Defense, the U.S. intelligence community and several hedge funds. The book has been a big success, landing on the New York Times bestseller list and being talked about by presidential candidates such as Rick Perry.

Rickards makes suggestions for how a crisis can be avoided. He thinks that certain policy options that promote growth in the U.S. economy could help to avoid another crisis. Some solutions he offers include eliminating the corporate income tax and the capital gains tax and putting more regulations on banks rather than on businesses.

“The government doesn’t create jobs, private businesses do. We need policy that favors the private sector.”

Rickards will give a talk on his book Thursday at 7 p.m. at the Darien Library. The talk is free and open to the public.

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