Currency wars and the fall of empires
My new post at Pieria:
"I have been reading James Rickards' book Currency Wars. In this, Rickards reviews the use of fiat currency over the course of the last century, and concludes that the present global fiat currency system is inherently unstable and on the point of collapse. He calls for return of the gold standard to stabilise firstly the US dollar and, following on from that, international trade currency.
I am no historian, but the first thing that struck me about this book was its partial view of history. Rickards does not discuss the reasons for the classical gold standard being abandoned in 1914. Indeed since he writes almost entirely from an American perspective throughout this book, the European historical dimension is seriously neglected. There are two major omissions:
- the background to World War I and its consequences
- the collapse of the Soviet Union.
Both of these involved catastrophic failure of fixed currency systems: admittedly only the first involved a gold standard, but really that does not matter. The chaos caused by the collapse of empire is the real issue in each case. Indeed the global dislocations arising from the First World War and its associated events reverberated for the rest of the 20th century."The remainder of the post can be found here.