Money_How the Destruction of the Dollar Threatens the Global Economy - and What We Can Do About It
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and Phillips curve, 79–81
recent lack of, 75–77
(See also Great Inflation)
Innovation, 20, 74
Interest rates, 49, 68–69, 87, 90–92, 139–140, 182, 194
International Monetary Fund, 32, 54, 63, 118
International stocks, 180–181
Iran, 108
Ireland, 101, 107
Israel, 96, 202
Italy, 63, 101, 107, 135, 160, 197
Japan, 21, 33, 47, 48, 52, 61, 67, 103–104, 135, 181, 199–201
Jastram, Roy, 133
John Deere, 174
Johnson, Lyndon, 11, 48
Jones, Paul Tudor, 146
JPMorgan Chase, 111, 114
Junk bonds, 182–183
Karlgaard, Rich, 84
Kadlec, Charles, 90, 92–93
Kahneman, Daniel, 177
Kennedy, John F., 155
Keynes, John Maynard, 82–83, 90, 99
Keynesianism, 19, 21, 22, 45, 74, 79–80, 134
Kirchner, Cristina Fernandez de, 94, 122
Koch, David, 111
Krugman, Paul, 75, 111–112, 198
Kydland, Finn, 80
Laffer, Arthur, 156
Latvia, 101, 202
Law, John, 85, 88
Lehrman, Lewis E., 25
Lewis, Nathan, 21, 127, 139–140
Liberty Dollar, 8, 35
LIBOR, 118
Life insurance, 185–186
Lithuania, 150, 202
Locke, John, 82, 101, 134
Lowndes, William, 134
Lucas, Robert, 80
Maddux, Jon, 120
Madoff, Bernard, 168
Malaysia, 136, 202
Malpass, David, 91, 118
Mao Zedong, 52
Mark to market, 87
McCain, John, 108
McDonald, Forrest, 30
McKinnon, Robert, 68
Medicaid, 123–124
Melloan, George, 64–65, 108
Mercantilism, 3, 40, 43–46, 53, 131, 136, 192
(See also Neo-mercantilism)
Merkel, Angela, 198
Middle East, 101, 107–108
Milton, John, 127
Misery Index, 122
Mississippi Bubble, 85–86
Monetarism, 19
Monetary demand, 33–34
Monetary expansion, 72
case examples of, 93–96
and college loans, 120
problems caused by, 73–75
and wealth disparity, 88–89
Monetary policy, 2, 45–52, 203
and addiction to loose money, 93–96
key precepts of, 191–196
under Nixon, 47–50
under Obama, 51–52
and problems from tight money, 96–98
Money, 25–41
demand for, 33–34
as instrument of communication, 37–39
origins of, 27–28
stable, 28–29
and trust, 30–33, 100, 103–105
as unit of measurement, 26–27
wealth vs., 8, 39–41
Money supply, 157
Montana, 128
Moral decline, weak money and, 99–125
in ancient Rome, 125
and crime, 121–123
and culture of dependence, 123–124
and declining moral standards, 116–119
and economic stagnation, 114–116
and “gaming the system,” 119–121
global effects of, 106–108
and growth of government, 112–114
and hunt for scapegoats, 108–110
and money-trust relationship, 103–106
and Occupy Wall Street, 110–112
and potential for Great Disorder, 100–102
Morsi, Mohamed, 108
Mortgage-backed securities, 11
Mortgages, walking away from, 119–120
Mt. Gox, 36
Mubarak, Hosni, 108
Muhlhausen, David B., 124
Mundell, Robert, 62, 65, 80
Murdoch, Rupert, 111
Mutual funds, 164, 177
Myanmar, 104
Nasdaq, 97
National Income and Product Accounts (NIPA), 178
Neo-mercantilism, 47–48, 50, 54, 55, 130
Net worth, decline in average, 92–93
Newton, Isaac, xi, 134, 139
Nigeria, 201
NIPA (National Income and Product Accounts), 178
Nixon, Richard, and administration, 9, 11, 18, 21, 47–50, 90, 123, 146, 149
Norway, 104, 137
Obama, Barack, and administration:
debt ceiling raised by, 35
election of, 108
fining of JPMorgan Chase under, 114
and floating exchange rates, 50
on foreign trade, 51–52
and General Motors bankruptcy, 181
healthcare reform under, 71–72, 170
and income inequality, 102, 116
loose money policies of, 146
monetary policy under, 11, 60–62
and retirement accounts, 170
Simpson-Bowles commission appointed by, 203
support for “strong dollar” expressed by, 46
Obamacare (see Affordable Care Act)
Occupy Wall Street, 51, 88, 101, 110–112, 121
Oil, 133
Oil prices, 13, 84, 144
Operation Twist, 11–12, 16, 72–73, 83, 91
Organization of Petroleum Exporting Countries (OPEC), 90
Ostmark, 29
Ottoman Empire, 148
Panic of 2008–2009 (see Financial crisis of 2008–2009)
Papandreou, George, 109
Paul, Ron, 81, 98
Paulson, John, 111, 146
P/E ratio, 177, 179
Perceptions, 30
Permanent life insurance, 185–186
Perry, Mark, 59
Personal savings rate, 121
Phelps, Edmund, 80
Phillips, William, 79
Phillips curve, 19, 79–81
Poe, Ted, 128, 151
Poland, 170, 197, 202
Politopoulos, Demetri, 112
Pollack, Alex, 88
Portfolio, investment, 166–169
Portugal, 63, 107, 197
Prescott, Edward, 80
Price/earnings (P/E) ratio, 177, 179
Prices, 38, 129, 144
Protecting your assets, 163–187
with bonds, 181–183
with commodities and currency, 184
with gold, 183–184
with life insurance, 185–186
portfolio for, 166–169
with real estate, 184–185
with stocks, 168–181
Quantitative easing (QE), 10–12
and foreign debt, 83
and global instability, 108
and gold prices, 167–168
and government borrowing, 89
and inflation, 71–73, 75, 78
in Japan, 200
and purchase of longer-term bonds, 91
“tapering” of, 19, 21, 71, 182, 189
and weak recovery, 15–16
(See also Operation Twist)
Randazzo, Anthony, 89
Reagan, Ronald, and administration, 20, 80, 85, 94, 145–146, 155–156
Real estate, investing in, 184–185
Real estate investment trusts (REITs), 166
Reed, Lawrence, 125
Regulation, 16–17
REITs (real estate investment trusts), 166
Retirement accounts, 172
Rickards, James, 53
Risks, taking, 173–174
Roberts, Paul Craig, 53
Rodgers, Cathy McMorris, 91
Rogers, Jim, 53, 119
Rome, ancient, 109, 125
Romer, Christina, 46
Roosevelt, Franklin, 150
Rosenfeld, Richard, 122
&
nbsp; Roth IRAs, 170
Ruble, 29, 68, 161
Russia, 8, 68, 118, 135, 137, 138, 142, 147, 161, 193, 201
Ryan, Daniel, 141
Salaries, 14
Sargent, Thomas, 80
Saudi Arabia, 96
Scapegoats, 108–110
Schiff, Peter, 75–76
Schlifske, John, 186–187
Schröder, Gerhard, 198
Schumpeter, Joseph, 179
SDRs (special drawing rights), 54
Shlaes, Amity, 78–79
Silk Road, 36
Silver, 133
Simpson-Bowles commission, 203
Sims, Christopher, 80
Singapore, 33, 66, 96
Sivy, Michael, 75
Skousen, Mark, 163
Smith, Adam, 39–40, 45, 58, 192
Smoot-Hawley Tariff, 52, 131, 159–160
SNAP program, 123
Social welfare state, 22, 143
Sony Walkman, 38
Soros, George, 146, 161
South Africa, 8, 10, 102, 133, 193, 202
South Korea, 96, 202
South Pacific Islanders, 28
Soviet Union, 29
S&P 500 (see Standard & Poor’s 500)
Spain, 44, 101, 107, 124, 133, 135, 197
Special drawing rights (SDRs), 54
Speculation, 145–146, 161
Srinivas, Alam, 115
Stable money, need for, 28–29, 67–69, 191, 196
Standard & Poor’s 500 (S&P 500), 164, 166, 168, 171
Stock market, 164
Stocks, 168–181
foreign, 180–181
and key indicators, 178–179
long-term stability of, 168–170
and P/E ratio, 179
in retirement accounts, 170
and risk, 173–174
strategy for investing in, 171–177
Student loans, 120–121
Subprime mortgage crisis, 12–13, 85–88, 105–107
Summers, Larry, 46
Sweden, 198
Switzerland, 33, 66, 137, 192
Syria, 7, 101, 102, 117
Taibbi, Matthew, 111
Taiwan, 96, 202
Tamny, John, 146
Taren, Bill, 82
Tax reform, 85
Taylor, John, 91
Technology, 20, 38
Templeton, Sir John, 177
Thailand, 31–32, 54, 68, 202
Tilton, Lynn, 91
TIPS (Treasury Inflation Protected Securities), 166
Trade, 43–69
and Bretton Woods system, 50–51
and fallacy of currency manipulation, 60–62
and mercantilism, 44–45
and monetary policy, 45–47, 51–52
and Triffin dilemma, 47–50
Trade deficits, 54–60, 191–192
Treasury bills, 10, 11, 91
Treasury bonds, 182
Treasury Inflation Protected Securities (TIPS), 166
Triffin dilemma, 47–50, 54
Trust, money and, 30–33, 100, 103–105
Tunisia, 108
Turkey, 8, 10, 31, 54, 101, 102, 117, 192, 193, 202
Two-income families, 14
Tyrrell, Patrick D., 124
Ulbricht, Ross William, 36
Unemployment, 18
United Kingdom, 65, 118
(See also Great Britain)
United States:
banking scandals in, 118
credit rating of, 18, 34, 123
crime in, 122
as economic engine, 189
economic growth in, 136–137
economic prospects for, 202–204
federal debt of, 18, 123
and Great Recession, 7
as “high trust” society, 103–104
inflation rate in, 143–144
monetary policy in, 9–10, 19–21
need for monetary reform in, 202–204
Reagan boom in, 145–146
slow economic growth in, 17–18
U.S. dollar:
alternatives to, 35–37, 62–65
authoritarians benefiting from decline of, 89–90
current crisis of faith in, 34–35
declining purchasing power of, 9–10
as leading currency, 65–67
need for stable, 67–69
weak vs. strong, 46–47
as world currency, 190
U.S. Federal Reserve (Fed):
bond buying by, 31
under Clinton, 97
and credit drought, 90–91
and danger of “a little inflation,” 77–78
and end of gold standard, 9–10
expansion of monetary base by, 11, 20, 120
and implementation of gold standard, 152–155, 159
and instability in Middle East, 107–108
and interest rates, 101, 105
and investment strategy, 175–176
under Johnson and Nixon, 48–49
mortgage-backed securities bought up by, 89, 91
“mystique” of, 2, 22–23
public opinion on, 127–128
under Reagan, 94
responsibility of, 98
and unstable money, 10–13
and weak recovery, 15–17
(See also quantitative easing [QE])
U.S. Mint, 30, 36
Utah, 36, 128
Vanguard Group, 171–172, 182
Venezuela, 74, 95, 122
Vietnam War, 48
Volcker, Paul, 20, 94, 175
Walmart, 81
Washington, George, 9, 30
Wealth:
monetary expansion and disparity of, 88–90
money vs., 8, 39–41
The Wealth of Nations (Smith), 39–40
Weatherford, Jack, 30
Weimar Germany, 27, 74, 75, 77–80, 84, 99–101, 109, 110
Williams, John, 76
Woodhill, Louis, 17, 63–64, 151, 165
Woodward, Bob, 142
World Bank, 201
World War I, 138
Yandle, Bruce, 103, 105
Yellen, Janet, 19, 71, 72, 75, 77–78, 134, 203
Yen, 21, 54, 61, 181, 200
Yuan (renminbi), 60, 61, 65, 66, 198
Zimbabwe, 7, 73, 101, 117
About the Authors
Steve Forbes is coauthor of the New York Times bestseller Power Ambition Glory and the Wall Street Journal bestseller How Capitalism Will Save Us. Forbes is chairman and editor-in-chief of Forbes Media, which publishes Forbes magazine, with a circulation of nearly 1 million readers. Combined with Forbes Asia, Forbes Europe, and the company’s licensee editions, the magazine reaches close to 6 million global readers. Forbes.com reaches 65 million unique monthly visitors; Forbes websites include Forbes.com, RealClearPolitics.com, RealClearMarkets.com, RealClearSports.com, and RealClearWorld.com.
Elizabeth Ames has written two previous books with Steve Forbes, How Capitalism Will Save Us and Freedom Manifesto. She is founder of BOLDE Communications, which has provided media relations and strategic consulting to a wide range of corporate and individual clients. She speaks to business groups, and her journalism and commentary have appeared in a wide range of print and online outlets.