I have previously reviewed James Rickards other books The Death of Money and Currency Wars and found them both well written and compelling reads. His newest book, The New Case for Gold is no different.
This is not a huge book but it covers its topic very well. The book is not hugeat 172 pages of text with an acknowledgements section and index. It is organized into 6 topical chapters and a conclusion.
The first five chapters essentially explain at length why gold is worth owning even though central bankers say it is not. The essential argument, and one that I happen to agree with is that gold is money. It always has been and it will remain so. He makes the point that if gold were not money why do the world’s central banks have so much of it and why are some getting even more? He covers the fact that many countries are starting to repatriate their gold from overseas depositories back to the country of the gold owners.
One of the most interesting chapters was his discussion of the true value of gold and why he thinks that gold is currently undervalued. Most people who follow international economics are aware that the current world economy is extremely deflationary and that central banks have only been able to avoid massive deflation by institution policies that would otherwise cause extreme inflation such as the Fed’s QE policy and near zero interest rates. Rickards examines why these policies have failed to work and further explains why at some point the major economies of the world are going to have to revalue gold by fiat and return to some type of gold standard to r4ebalance the world’s economy.
The last section explains why gold is a sound investment, how much gold to have in your portfolio, why physical gold is important, and why roughly current prices will not last long and gold is set for a historic rise. The book as a whole is very well written and Rickards has a talent for making what are otherwise arcane economic terms explicable for the average person.
Even if you don’t own gold or are not inclined to buy it this is still a good book to read. If the author is right and what I knew before reading this book leads me to think he is then at least you will know why you should kick yourself in the ass when your dollar denominated assets are inflated into nothingness in the next few years as central banks find they have no choice but to go nuclear to get the world economy moving again.
I highly recommend this insightful and well written book.