The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis Hardcover – November 15, 2016

I can't say I agree with all the conclusions but the research is sound and the material is very thought provoking. As a risk management professional I particularly appreciated his understanding of risk management, complexity theory and related concepts. James Rickards mixes his personal experience and anecdotes with sound science and research to provide a picture of modern finance and global economies which is rare.He talks about risk in the broadest possible sense and in real world scenarios which is particularly helpful and gets to the heart of some of our systemic issues. For example: "The failing of prevailing risk models is that complex systems behave in a completely different manner from equilibrium systems. This is why central bank and Wall Street equilibrium models produce consistently weak results in forecasting and risk management."He also argues a good case for the use of complexity theory and Bayesian analysis. Some of the text can be a bit dense if you're not used to this sort of thing but the information is all there. You may just want to re-read the odd section if it is all new to you but if not, just persevere and the material links back to itself as the book progresses. An example: "Complexity Bayesian technique is not a science in itself, it’s an applied mathematical tool with robust predictive properties. The prime science of capital markets is complexity theory. Capital markets are complex systems, yet complexity is little understood and even less used in financial economics. From the 1998 global liquidity crisis, to the 2000 tech bubble collapse, to the 2008 panic, policymakers have led the world into one crash after another. Their failure to use complexity theory explains why. The case for complexity theory is straightforward. It’s not difficult to grasp. Investors must grasp it now if they wish to preserve wealth." He does take the time to explain all of these concepts by the way, so don't be put off if the above isn't immediately helpful.I quite like that he says what he is thinking and doesn't mince words: "When I left LTCM in 1999, I was dissatisfied with the standard explanations for my former firm’s collapse. Nobel Prize winners talked about the “perfect storm,” the “hundred-year flood,” and a “fifteen-standard-deviation event.” I knew enough about statistics to realize this was the language of normally distributed risk and mean reversion—the language of random walks and efficient markets. My intuition said there was something rotten at the heart of modern financial economics." He is quite right. Hundred year floods occur more frequently than every 100 years and 6-sigma events occur more frequently than statistical models predict. If I tell you that it's 99% sure to be sunny tomorrow and you complain to me when it rains, I will simply point out to you that a 1% chance of rain does not preclude it from raining. In complex systems such as stock markets or global politics, probabilities are even less helpful. The various parties are continually adapting to each others behaviours so nothing can be taken for granted (regrettably for organisations such as LTCM who rely on quantitative models).One of his best insights, if you haven't clued into it already, is that the notion of 'value-at-risk' is fundamentally flawed in an interconnected world of derivatives. In the 21st century, we bundle loans to create securitised debt instruments, which are sold and the funds used to create more loans, bonds or collateralized debt. We also use stocks as the basis for futures, warrants, options, bonds and more. All of these can be used to offset other debt obligations, creating a notional amount of debt which in theory can all be mathematically offset to balance each other. But only in theory ... Rickards does a much better and more detailed job of explaining this in his book but in essence, $1 billion in cash or equities, can be leveraged again and again as the basis to create (for example) a $100 billion or more exposure of debt and other instruments. This is risky enough even if you could rely on everything to fall due at the same instant that a market crash occurs but in reality, nobody has a unified picture to be able to zero out all the transactions. One debt instrument can fall due days, weeks or months before the others and before anyone can even work out all the various counter-parties. By then, it's all a bit late and if even one of the counter-parties has fallen into bankruptcy, the chain is broken and the house of cards collapses. That's a crude oversimplification of how global financial crises unfold but if you read the book, you'll understand it in detail. Lest you think his book is all doom and gloom, Rickards has a few helpful suggestions on this and other issues.Another strength of the book is the way he takes a centuries or even millennia long view of finance, politics, nations and family dynasties to step outside the prevailing short term focus of quarterly reports and 'the last crisis'.As I mentioned at the start, I don't agree with all his conclusions, nor necessarily his interpretations of all the facts available but found it all informative and thought provoking. Original. Definitely worth a read. I've studied and worked in finance, investing and risk management for decades but still learned a lot from this book.

It is an amazing read. Highly recommended

James Rickards is one of the most knowledgable and entertaining financial authors. I have read almost all of his books, and this one does not disappoint. The risks and macro trends he outlines are real. However, the specific investment advice this book gives could have been devastating to your portfolio. The HSGFX mutual fund he recommends is down by 65% over the last 15 years, while the S & P 500 is up by 800% in the same timeframe. Read this book, but never invest based on your rational beliefs. The market can stay irrational longer than you can stay solvent.

This is arguably Jim Rickard's best book yet. While his formal education is in finance and law, he expands these disciplines with concepts borrowed from physics, supplemented with an excellent intuitive understanding of politics, along with an explanation of how the system is manipulated of the system by what he calls global "elites." Yes, the latter really exist, and share remarkably similar goals, including global inflation to nullify the debt massive mess, further micromanagement of your personal life and economics by a "new world order." (No, this is not a traditional conspiracy theory) .An excellent example of the latter is the widely accepted concept (especially on the left) of "climate change," which all but a few "skeptics" have bought hook, line, and sinker. What is the real purpose to promoting this questionable concept? Naturally, it furthers the interest of statists to control your life and pocketbook while redistributing wealth through "globalization," using a a one world (socialist) government, more regulation and higher taxes.An important concept he introduces to finance and investing is the concept known in physics as "complexity theory." In short, this is the tendency for complex system the break down and result in unpredictable consequences. And, importantly, the more complex the system, the more vulnerable is is to breakdown and disorder. As an example, Rickards shows how the 2011 Japanese Tsunami resulted in a complex system cascade of events, resulting in rapid and significant strengthening of the yen.While the arugments in this book argue for a pessimistic view of the future for personal and sovereign financial security, this is not a typical "doom and gloom" book. While their are plenty of these on the market, this book should not be mistaken as merely another one of them. While it provides no simple answers, it does inspire the intelligent investor to master certain concepts and information to improve their odds of surviving in the new system. All intelligent investors should read this book.

This is a thought provoking book. Most people are aware of the malignancy of the global financial system, at least intuitively, but this book provides a great analysis into the inner works of the system and its complexity, which, in the end, will cause its swift collapse, at a global scale.

Extremely infomative and with insights into some of the most influential aspects of the world order broken down beautifully.

Un viaggio per conoscere al meglio la nostra situazione economica vista dal punto di vista mondialeTesto interamente in inglese ma di facile comprensione anche per neofiti

Interessante a leitura e de fato condiz com muito o que está acontecendo atualmente na sociedade. Vale a pena.

I already read currency wars and it was much easier to read that this one. This book is much more technical and goes deeper but, at least for me, it is a much harder to understand and I had several times to read the same paragraph twice to get the full value.