The Death of Money
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gold reserve rebalancing and potential reform of, 279–84
Washington Consensus, 118–19
Internet, 174
interstate highway system, 174–75
investment
Berlin Consensus and, 123
Bernanke’s monetary policies aimed at increasing, 86
Chinese economic growth and, 95–101, 107–110
gold as not constituting an investment, 218–19
infrastructure (See infrastructure spending)
lack of, and duration of Great Depression, 84
regime uncertainty and, 84–86
investment portfolio recommendations, 298–301
alternative funds, 299–300
cash, 300
fine art, 299
gold, 298–99
land, 299
Iran, 12, 30, 151, 152, 153, 156
cyberattacks conducted by, 60
U.S.-Iran financial war, 54–58
Iraq, 153
Ireland, 128, 200
iron rice bowl principle, 93
“Irreversibility, Uncertainty, and Cyclical Investment” (Bernanke), 84, 85
ISI (Pakistani intelligence), 36–37
Israel, 156
Italy, 128
Jamaica compromise, 235–36
Japan, 82, 157–62
debt-to-GDP ratio of, 159, 259, 261
deflation in, 160–61, 260–62, 264
Federal Reserve’s easy-money policy and, 157–59
gold-to-GDP ratio of, 157, 281
IMF commitment of, 202
quantitative easing in, 160–61
secret gold acquisitions by, 273–74
Jin Dynasty, 90
Johnson, Lyndon, 7–8, 209
Jordan, 152, 153
JPMorgan Chase, 205
Kazakhstan, 151
Kelton, Stephanie, 168
Keynes, John Maynard, 7, 131, 134, 168, 207, 244
Keynesianism, 69, 124, 130–31, 193–94
Khan, Kublai, 90
Khomeini, Ayatollah, 30
Kindleberger, Charles, 84
King Dollar (sound-dollar) policy, 118, 176–77, 210, 211
Knight, Frank H., 85, 268, 269
Knight Capital computer debacle, 60, 63, 296–97
Knot, Klaas, 233
Korea, 202
Kos, Dino, 272–73
Kosovo, 136
Krugman, Paul, 117–18
on myth of Chinese growth, 94, 95, 96
myth that gold caused market panics and, 224
sticky-wage theory and, 124, 131, 134
Kuroda, Haruhiko, 161
Kuwait, 152, 153
Kyrgyzstan, 151
labor-capital factor input model of economic growth, 94–95
labor-management relations, 123–24
labor mobility, 125
Lagarde, Christine, 144, 148, 191, 192, 194–95, 198, 205, 206
land, as investment, 299
Lao Tzu, 90
Latvia, 136. See also BELLs (Bulgaria, Estonia, Latvia, Lithuania)
lease arrangements, gold, 275, 284
Lehman Brothers, 77, 103, 130
Lenin, V. I., 7
leverage, 250
bank’s use of, 80, 188, 194, 196
of IMF, 201–6
paper gold transactions and, 275
Levitt, Steve, 32–33
Lew, Jack, 195, 196
Lie, David T. C., 92
Lipton, David, 194–95, 196, 198
“Liquidation of Government Debt, The” (Reinhart and Sbrancia), 183
liquidity trap, 246–47
Lisbon Treaty, 117
Lithuania. See also BELLs (Bulgaria, Estonia, Latvia, Lithuania)
Long Depression, in Japan, 160
Long March, 91–92
Long-Term Capital Management bailout, 62
Louvre Accord, 1987, 119
Lowell, Francis Cabot, 6
low-interest-rate policy, of Greenspan, 76, 260
Lugar, Richard, 204, 205
Maastricht Treaty, 117, 238
McCulley, Paul, 168
Macedonia, 136
McKittrick, Thomas, 213
Mahathir, Mohamad, 45
Makin, John, 177, 244–45
malinvestment, Chinese, 96–110, 107–9
Manningham-Butler, Eliza, 37
Mao Zedong, 92
market collapse, 11–12
“Market for Lemons, The” (Akerlof), 83
markets
asset bubbles, 75–78
central planning and, 69–72, 87
collapse of, 11–12
defined, 68
information asymmetry and, 83–88
investment and, 84–86
price discovery function of, 68
regime uncertainty and, 84–87
unintended consequences of Fed’s easy-money policies, 78–83
wealth effect and, 72–75
MARKINT, 35–41
financial war and, 40–41
meeting with CIA, 37–39
military interest in, 40–41
terrorist detection and, 35–39
marks, German, 209
Marshall, Andy, 42–44, 46, 47, 63, 64
Martines, Lauro, 115
Marx, Karl, 218
Marxism, 69
Matryoshka Theory, 70
Medvedev, Dmitry, 151–52
Merchant of Venice, The (Shakespeare), 67
Merkel, Angela, 121, 127, 135, 202, 232
Merrill Lynch, 184
Mexico, 200, 233
MF Global collapse, 196
MI5, 36–37
MI6, 36–37
Ming Dynasty, 90
mirror imaging, 62
Mishkin, Frederic S., 286–88
Mitbestimmung (codetermination), 123–24
Mitterrand, François, 116
Mohammed bin Rashid Al Maktoum, Sheikh, 154
monetarism (quantity theory of money), 168–69
money
contract theory of, 165–67, 169
defined, 165–66
fiat, 168–69
gold as, 217, 220–25
gold’s role in enforcing money contract, 169–71
quantity theory of, 168–69
quantity theory of credit, 168–69
SDRs as, 207
state theory of, 168–69
money illusion, 7–8
money printing. See easy-money policy of Federal Reserve
Monnet, Jean, 116
Montenegro, 136
Morell, Mike, 37–39
Morgan, J. P., 220
Morgan Stanley, 32–33, 262
Morocco, 152, 153
Mourdock, Richard, 205
M-Subzero, 280, 283–84
Mubarak, Hosni, 156
Mulheren, John, 18–19, 32–33
Mundell, Robert, 125
Mussolini, Benito, 294
Mutual Assured Destruction (MAD), 46, 63
Mutual Assured Financial Destruction, 46
“Myth of Asia’s Miracle, The” (Krugman), 94
M-Zero (M0), 280
Nakamoto, Satoshi, 254
Napoleon Bonaparte, 114
Napoleonic Wars, 115
NASDAQ Stock Market closure, August 22, 2013, 60, 296–97
National Defense University, 59
National Journal,
63
National Security Agency (NSA), 53
negative real interest rates, 183–84
neofascism, 294–95
Netherlands, 233
New Scotland Yard, 37
New York Times, The, 39, 51, 55, 133, 144
9/11 attacks
continuity of government operations, failure of, 63
as failure of imagination, 256, 257
9/11 attacks, and insider trading, 17–28, 63
Mulheren’s opinion of, 18
9/11 Commission’s failure to find connection between, 21–22, 23, 25–27
Poteshman’s statistical analysis of, 22–23
signal amplification and, 24, 25, 26, 27
social network analysis of, 19–20, 25
Swiss Finance Institute study of, 23
9/11 Commission, 21–22, 23, 25–27
9/11 Truth Movement, 27
Nitze, Paul, 43
Nixon, Richard, 1, 2, 5, 58, 85, 209, 220, 235, 252, 285
Nolan, Dave, 32–33
numeraire, gold as, 219–20
Obama, Barack, 37, 57, 129, 156, 202–3, 206, 252–53
Obamacare legislation, 247–48
offensive aspects of financial war, 46
Office of Tailored Access Operations (TAO), 53–54
Oman, 152
one-child policy, China, 95, 102
O’Neill, Jim, 139–40, 146, 150
Operation Duplex-Barbara, 59
Otto I, Emperor, 114
Outline of Reform (C-20), 235
Pakistan, 30, 151, 156
panic dynamic, 62
Panic of 1907, 198
Panic of 2008, 46, 47, 52, 76, 77, 170, 188, 196, 201–2, 211, 296
panics, 224
paper gold transactions, 275–76, 284–86
Paulson, Hank, 206
Pei, Minxin, 106
permanent disability, 246
Peterson, Peter G., 51
Petraeus, David, 37
Pettis, Michael, 108–9
phase transitions, 172, 265, 289–90
Ph.D. standard, 177
physical targets, in financial war, 46
piecemeal engineering, 292
piggyback trading, 24
Plaza Accord, 1985, 118–19
Pleines, Günter, 277
Poland, 200, 233
Ponzi scheme, in wealth management products (WMPs), 102–3
Popper, Karl, 292
Portugal, 128, 200
Poteshman, Allen M., 22–23
pound sterling, 157, 161, 209
price discovery, 68
primary deficit sustainability (PDS) framework, 177–83
Project Prophesy, 28–34
Pufeng, Wang, 44, 45
Putin, Vladimir, 151
Qatar, 152
Qiao Liang (Unrestricted Warfare), 44–45
Qin Dynasty, 90
Qing Dynasty, 90, 91
quantitative easing (QE), 159–61
end of, implications of, 297
by Federal Reserve, 184–85
in Japan, 160–61
in United Kingdom, 160
quantity theory of credit (creditism), 168
quantity theory of money (monetarism), 168–69
Quantum Dawn 2, 54
Rajoy, Mariano, 134
Ramo, Joshua Cooper, 120
random numbers, 268–69
Rauf, Rashid, 37
Ray, Chris, 35–36, 38, 40
Raymond, Lenny, 35
Reagan, Ronald, 2, 63, 118, 166, 176–77, 210
Reagan administration, 235
real incomes, decline in, 78–79
regime uncertainty, 84–87, 125–26
regional trade currency blocs, 255–56
regression analyses, 4–5
Reinhart, Carmen, 182, 183
repatriation of gold, 40, 231–34
Republicans, 175–76, 179, 180, 205, 294
Reserve Bank of Australia, 52–53
revolution in military affairs (RMA), 43–44
Rise of the Warrior Cop (Balko), 294
risk
financial, 85, 268–70
gold as risk-free asset, 219
investments and, 218–19
systemic, 11–12, 81, 188, 249–50, 251, 259, 270
uncertainty distinguished, 85, 268
Risk, Uncertainty and Profit (Knight), 268
Roett, Riordan, 192
Rogoff, Kenneth, 182
Rollover (film), 1, 3
Roman Empire, fall of, 5
Roosevelt, Franklin D., 85, 295
Rothschild, Nathan, 216
Rouhani, Hassan, 57, 152
Rubin, Robert, 177, 195, 196
rule-of-law society, 166–67
Russia, 139, 151, 152, 233. See also BRICS (Brazil, Russia, India, China, South Africa)
gold accumulation by, 12, 229–30
gold-to-GDP ratio of, 157, 280–81
IMF commitment of, 202
Saudi Arabia and, 156
U.S.-Iran financial war and, 56, 57
Sakakibara, Eisuke, 261, 273–74
Samsung, 82
Sancerre, siege of, 115
Sarbanes-Oxley Act, 196
Sarkozy, Nicolas, 202
Saudi Arabia, 152, 156–57
Saudi Aramco, 60
savers, 183, 184
Chinese, 102–3
Federal Reserve policies penalizing, 79
Sbrancia, M. Belen, 183
Schmidt, Helmut, 271–72
Schumann, Robert, 116
Schwartz, Anna, 84
Schwarzman, Stephen A., 51–52
Scotland, 136
Second Bank of the United States, 199
self-organized criticality, 270
Serbia, 136
Seven Years War, 115
shadow finance system, in China, 101–4
shadow gold standard, 236
Shafik, Nemat, 194–95
Shakespeare, William, 67, 88
Shamoon digital virus, 60
Shanghai Cooperation Organization (SCO), 150–52
Shapiro, Mary, 59
Shinohara, Naoyuki, 194–95
sight accounts, in gold, 276
signal amplification, 22
in stock trading, 23
terrorist insider trading and, 24, 25, 26, 27
Skype, 144
small-and-medium-sized (SME) lending, 79–80
Smith, Adam, 70, 71, 72, 87, 218, 255
Snowden, Edward, 39, 54, 149
social disorder, 294–95
solidus, 114
Solyndra, 123
Sony, 82
Sorkin, Andrew Ross, 51
Sorman, Guy, 132
Soros, George, 45, 292
sou, 114
sound-dollar policy, 118, 176–77, 210, 211
South Africa, 139, 235. See also BRICS (Brazil, Russia, India, China, South Africa)
South Korea, 45
sovereign debt crisis of 2010, European, 128–30
Soviet Union, 69. See also Russia
Spaak, Paul-Henri, 116
Spain, 128, 134, 153
special drawing rights (SDRs), 1, 3, 12, 155, 206–214
creation of, 209–10
deflation prevention as purpose of, 213–14
dollar index weakness and, 210–11
as emergency liquidity so
urce, 211, 213
issuances of, 210–11
as money, 207
new global gold-backed SDR, structuring of, 237–42
as potential future reserve currency, 211–14, 292–93
valuation of, 210, 236
specialist firms, 18
spillover effects, of national policy, 193, 194, 198
Stamm, Luzi, 232
State Administration for Foreign Exchange (SAFE), 126–27
state-owned enterprises (SOEs), 97–98, 107
state theory of money (chartalism), 168–69
Stein, Jeremy, 188, 189, 249–50, 251
Stewart, Martha, 25
Stewart, Rod, 52
sticky wage theory, 130–31, 134
Stiglitz, Joseph, 117–18
stimulus plan, Obama’s, 174
stochastic models, 269
stock bubbles, 75
stock market crash, risk of, 250
Strauss-Kahn, Dominique, 191, 204
structural downturns, 197–98
student loan bubble, 247–49
subsidiarity principle, 113–14, 118
Sui Dynasty, 90, 91
Summers, Larry, 195, 196
suspicious trading, spotting, 32
sustainable debt, 171–72, 176–80
swaps
asset, in derivatives strategies, 80–81
central bank arrangements, 273
collateral, 188
gold, 275
SWIFT, 39
U.S.-Iran financial war and, 54, 56
Swiss Army, 59
Swiss Finance Institute, 23
Switzerland, 202, 232–33
Syria, 57
Syrian Electronic Army, 59
system crashes, 296–97
systemic risk, 11–12, 81, 188, 249–50, 251, 259, 270
Taiping Rebellion, 91
Tajikistan, 151
Tang Dynasty, 90
TAO (Office of Tailored Access Operations), 53–54
Tao Te Ching (Lao Tzu), 90
tapering, 249–50
TARP bailout, 62
Tauss, Randy, 28–29, 35, 37, 38, 39
Tavakoli, Janet, 2
taxes
corporate rates, 122
deflation, impact of, 9, 259–60
Taylor, John B., 176
Taylor Rule, 176–77
Tea Party conservatives, 172–73, 205
technology, and economic growth, 95–96
Tenet, George, 28, 37
terrorist insider trading
MARKINT and, 35–39
9/11 attacks and, 17–28
Project Prophesy and, 28–34
Thailand, 261
Theory of Moral Sentiments, The (Smith), 70
“Theory of Optimum Currency Areas, A” (Mundell), 125
Thirty Years War, 115
threats to U.S. dollar, 5–13
Tiananmen Square demonstrations, 92
Too Big to Fail (film), 3