Currency Wars:The Making of the Next G

Currency Wars: The Making of the Next Global Crisis Drawing on a mix of economic history, network science, and sociology, this rich history provides an understanding of the increasing threats to U.S. national security, from dollar devaluation to collapse in the European periphery, and more. In 1971, President Nixon imposed national price controls andtook the United States off the gold standard, an extreme measureintended to end an ongoing currency war that had destroyed faith inthe U.S. dollar. Today we are engaged in a new currency war, andthis time the consequences will be far worse than those thatconfronted Nixon. Currency wars are one of the most destructive and fearedoutcomes in international economics. At best, they offer the sorryspectacle of countries' stealing growth from their tradingpartners. At worst, they degenerate into sequential bouts ofinflation, recession, retaliation, and sometimes actual violence.Left unchecked, the next currency war could lead to a crisis worsethan the panic of 2008. Currency wars have happened before-twice in the last centuryalone-and they always end badly. Time and again, paper currencieshave collapsed, assets have been frozen, gold has been confiscated,and capital controls have been imposed. And the next crash isoverdue. Recent headlines about the debasement of the dollar,bailouts in Greece and Ireland, and Chinese currency manipulationare all indicators of the growing conflict. As James Rickards argues in Currency Wars, this is more thanjust a concern for economists and investors. The United States isfacing serious threats to its national security, from clandestinegold purchases by China to the hidden agendas of sovereign wealthfunds. Greater than any single threat is the very real danger ofthe collapse of the dollar itself. Baffling to many observers is the rank failure of economists toforesee or prevent the economic catastrophes of recent years. Notonly have their theories failed to prevent calamity, they