The Road to Ruin is written by the head lawyer for the LTCM hedge fund that was hours away from shutting down the global financial system in 1998. He saw everything as it happened and negotiated the response. While everyone else dismissed the occurrence as a once in the lifetime of the sun experience, he wasn't convinced and developed entirely different models using "complexity theory" and captured the financial world as a complex system (physics term).
The Road to Ruin lines out a very dark conspiracy theory laden future for the world. It is written with a lot of scare tactic, but the strategy laid out to protect yourself is relevant regardless of whether all of his predictions play out.
His predictions go something like this: our current economic models are like using Newtonian physics. It all seems nice and relevant until you get near light speed and your math inexplicably ends up an order of magnitude off. We are living in an increasingly unstable complex system, but the current models don’t have a clue how much risk there really is. It doesn’t really matter what the initial trigger is. It may be a gold shortage, debt going bad, or geopolitical tensions. What does matter is that when the trigger happens, all of the other dynamically unstable systems will move, violently.
In order to halt the carnage, the government will be forced to freeze all electronic money and assets (stocks, bank accounts, money markets, etc.) in what Rickards has designated as a financial “ice-9”. Our current militarized police force will keep riots down at all cost. All of the laws and protocols are already set, it is just a matter of waiting for the appropriate market shock.
Eventually, the IMF (International Money Fund) will print its own form of currency (SDRs or Special Drawing Rights) and re-liquidate the frozen assets. That liquidation will come at a heavy cost for the United States as we will lose our global reserve currency status. All of these seemingly necessary actions will play out to the “global elite’s” overarching goals of “world money, world taxation, world order”. There really isn’t anything we can do to stop it, but there is a way to protect yourself. Buy the things that last: precious metals, undeveloped land, and fine art (museum quality only).
Where I found it:
I got a spam email from Rich Dad World with an extremely compelling sales pitch for the book. It looked like information I wanted, so I forked out the $4.95 for a hardcover copy sent to my home. I can’t imagine that being anything more than printing/mailing cost. What they were really selling were subscriptions to their newsletter, but I opted out before the end of the trial period to avoid paying the $99 annual subscription. Here is a
My takeaways:
Jim Rickards laid out the domino effect of each crisis very nicely: Wall Street bailed out a hedge fund in 1998, the Federal Reserve bailed out Wall Street in 2008, the IMF is the only one who can bail out the Federal Reserve in 20??. It is hard to believe anything other than a crisis will occur and that the dollar, and dollar denominated assets such as bonds, will be the ones in trouble.
My money isn’t what I thought it was. I don’t have any money in stocks, bonds, money market accounts, or even bank accounts. What I have are the liabilities of other organizations. If those organizations fail, my money is at the mercy of a bailout that may or may not happen. After reading The Road to Ruin, both digital and paper money feels so fake. It all can be made worthless or seized very quickly.
I actually feel quite liberated by this fact. If money is fake, I don’t need to worry so much about it. If I lose everything (financially) and have to start over, it is really just a blessing that I got to live comfortably on play money in the first place. Only the things that actually matter in life are real.
Finally, if I want to preserve what I have, I need to invest it in things that will always be: land and resources.
Recommendations:
I think this one is an important read. Do I think it will all play out to the sensational language of Jim Rickards? No. In fact, I really wished he’d write in less dramatic terms so that he would sound more credible. I think it is important to understand his view so that you can see trends and make your moves accordingly. This book will open your eyes to the larger political forces that I hadn’t seen before.
Much of it was over my head and I had to look up quite a few terms, but it was worth it.
Further knowledge:
I highly recommend listening to Rickards on Youtube (James Rickards Project). He isn’t nearly as sensational or technically heavy in person. Only Rickards has the ability to tell you your money that you’ve spend your whole life trying to accumulate will disappear and still leave you feeling peaceful and fuzzy. His voice is so resonant and calm.
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