The Next Great Financial Freeze: Will Rickards’ Prediction Come True, This Time Too?

James Rickards is an emergent phenomenon in the field of economic futurism. A noted international finance expert, Rickards has written three books which form part of a planned quartet that lays out a bold and compelling vision about the economic vicissitudes facing the world.

In Currency Wars: The Making of the Next Global Crisis (2011) Rickards warned of the ensuing currency wars in the world. A currency war is a situation where several countries simultaneously devalue their money with an ostensible motive of increasing their exports. According to Rickards, this is the third currency war in the last 100 years – the first being in the 1930s and the second in the 1970s. Each time the currency wars ended badly, so the present day currency war is being called a "currency suicide".

The first currency war lasted 15 years, from 1921 to 1936 and the second currency war lasted 20 years from 1967 to 1987. According to Rickards, the new currency war might last until 2020 or beyond.

Rickards' second book was The Death of Money: The Coming Collapse of the International Monetary System (2014). In this book, Rickards analysed the state of the world in trying to predict the future. And the picture is not pretty. China is on the verge of a collapse due to its malinvestments and overdependence on “wealth management products”. The European Union “is like an aircraft with a single wing; it can choose to remain grounded, or it can build the other wing. Efforts to deal with the immediate crises in 2010 and 2011 … have been sufficient to avoid a collapse, but they are not sufficient to correct the fundamental contradictions in the design of the euro and the ECB.”

At present there is no alternative to the dollar as world's reserve currency. Hence many regard the dollar as a safe haven even though it is an inherently flawed currency. Rickards says that the International Monetary Fund's (IMF) special drawing rights (SDRs) could play the role of a potential alternative. It could take the form of a world money. But the SDRs are also fiat money backed by nothing.

Rickards in his second book of the quartet warns of a demise in the monetary system which could have drastic consequences. The world may even have to revert to a gold standard sooner or later due to unavoidable circumstances, leading to a quantum leap in the price of gold.

So what is the world leaders' response to all this? This is answered in Rickards' latest book The Road to Ruin: The Global Elite's Secret Plan for the Next Financial Crisis (2016).

In this book, Rickards surmises that since printing money over the years has not served its purpose, the world leaders have arrived at a plan to freeze global finance the next time a crisis occurs. And according to Rickards, the crisis is imminent very soon, even as early as 2018.

When the next crisis unfolds, "stock exchanges can be closed, ATMs shut down, money market funds frozen, negative interest rates imposed, and cash denied, all within minutes. Your money will be like a jewel in a glass case at Cartier; you can see it but not touch it. Savers do not realise that this... solution is already in place, waiting to be activated with an executive order and a few phone calls."

This may sound extreme but Rickards explains how a nationwide freeze on gold and bank transactions have occurred in the US in the past. This time around, the freeze will not be nationwide but worldwide.

Who are these elites? It is no secret. They are names familiar to us: Janet Yellen, Mario Draghi, and Christine Lagarde, even George Soros. Rickards writes: "Elites are aware that their views are not widely accepted in democratic societies. Elites realise their programmes must be implemented in small stages over decades to avoid backlash... Their glue is like-mindedness. Their strength is patience. Their method is piecemeal social engineering. Their scalpel is the shock doctrine [as popularised in Naomi Klein's The Shock Doctrine (2007)]....This is all employed in obeisance to the agenda: one money, one world, one order."

To arrive at this conclusion, Rickards does not employ the standard toolkit of economics such as those of Neo-Keynesianism or Monetarism, even the Austrian school. His tools are diverse including behavioural psychology, complexity theory and causal inference (Bayesian statistics).

Using his special toolkit, Rickards peers into the future to see what would happen after the global freeze. Rickards says that in the years 2017-18 there would be a massive printing and distribution of SDRs. These SDRs printed by the IMF would lead to the final phase of the grand bargain: create inflation to wipe out the global sovereign debt. The printing of SDRs would be under the garb of spending on global infrastructure and global welfare and combating global warming but the real motive in the years 2018-25 would be to destroy debt. This then is the global elite plan seen in full.

Rickards has written a gripping series of books that cannot fail to hold the readers' attention. Already many things that he has said have fallen into place. His predictions about the currency wars have come true. International officials are talking about moving away from the US dollar as a reserve currency and some news articles have started talking about the SDR especially since the Chinese yuan was included in it. It remains to be seen how much more things would turn out as Rickards has foreboded.