Apparently, in the new book, Rickards has a lot of snide remarks about Austrian school economics.
This has caused Gary North to justifiably go nuclear. Some snippets from North's attack:
He [Rickards] was the legal spokesman for [Long Term Capital Management]the high-leverage firm that engineered the biggest bankruptcy of the 1990's.---
The loss required a $3.6 billion bailout by the banks that had lent LCTM the money.
He talks about his five years at LTCM in Chapter 4. He refers to it as a spider web (p. 123). But the market ate the spider. The partners were the biggest investors. They lost everything. "Every big bank in the world wanted a piece of the action" (p. 127). They lost billions.
His point: the smartest guys in the room were economic idiots. Leverage ruined them.
Austrian economics had warned about this back in 1912. Nothing new here.
Did the experience make Rickards a man who could forecast the economic future? No. In 2009, he predicted imminent hyperinflation.His entry on Wikipedia says:
On March 24, 2009, Rickards presented his view at a symposium at Johns Hopkins, that the U.S. dollar was facing imminent hyperinflation and was vulnerable to attack from foreign governments through the accumulation of gold and the establishment of a new global currency.
If this is scientific economics, include me out.
Yet he keeps writing best-selling books about the imminent collapse of the financial system.---
Rickards says we Austrians are hopelessly out of touch. He, in contrast, knows what works.
And what did [his] tools reveal to him? That America was facing hyperinflation in March 2009.---
My theory: his zero-context use of the words "behavioral psychology, complexity theory, and causal inference" is public relations puffery. In the South, it is part of a program called "puttin' the shuck on the rubes." It goes like this: "Step right up. Let me show you how my fully tested forecasting elixir, with its unique, 100% scientific ingredients -- behavioral psychology, complexity theory, and causal inference -- can cure what ails you!"Read the full demolition here: Why I Don't Take Jim Rickards Seriously.
(ht Christopher Barcelo)