The New Depression
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The New Depression : The Breakdown of the Paper Money Economy

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Why the global recession is in danger of becoming another Great Depression, and how we can stop it When the United States stopped backing dollars with gold in 1968, the nature of money changed. All previous constraints on money and credit creation were removed and a new economic paradigm took shape. Economic growth ceased to be driven by capital accumulation and investment as it had been since before the Industrial Revolution. Instead, credit creation and consumption began to drive the economic dynamic. In The New Depression: The Breakdown of the Paper Money Economy, Richard Duncan introduces an analytical framework, The Quantity Theory of Credit, that explains all aspects of the calamity now unfolding: its causes, the rationale for the government's policy response to the crisis, what is likely to happen next, and how those developments will affect asset prices and investment portfolios. In his previous book, The Dollar Crisis (2003), Duncan explained why a severe global economic crisis was inevitable given the flaws in the post-Bretton Woods international monetary system, and now he's back to explain what's next. The economic system that emerged following the abandonment of sound money requires credit growth to survive. Yet the private sector can bear no additional debt and the government's creditworthiness is deteriorating rapidly. Should total credit begin to contract significantly, this New Depression will become a New Great Depression, with disastrous economic and geopolitical consequences. That outcome is not inevitable, and this book describes what must be done to prevent it. * Presents a fascinating look inside the financial crisis and how the New Depression is poised to become a New Great Depression * Introduces a new theoretical construct, The Quantity Theory of Credit, that is the key to understanding not only the developments that led to the crisis, but also to understanding how events will play out in the years ahead * Offers unique insights from the man who predicted the global economic breakdown Alarming but essential reading, The New Depression explains why the global economy is teetering on the brink of falling into a deep and protracted depression, and how we can restore stability.

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Product details

  • Hardback | 192 pages
  • 152.4 x 231.14 x 17.78mm | 408.23g
  • John Wiley & Sons Inc
  • New York, United States
  • English
  • 1118157796
  • 9781118157794
  • 100,352

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Review quote

The book is well worth reading for its analysis. (The Economist, 7th July 2012) 'Contains a fascinating and powerful diagnosis of how we got to our current pass...he makes an astonishing proposal at the end that made my jaw drop.' (Wealthbriefing.com, 14th August 2012)

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Back cover copy

Praise for The "New" Depression "The economic philosophies of John Maynard Keynes and Ludwig von Mises are obsolete. The world needs a new economist with a new economic philosophy. Richard Duncan is that new worldly economist. For years, I have recommended everyone read his books, "The Dollar Crisis" and "The Corruption of Capitalism." Richard's latest book, The New Depression, is more than recommended reading. It is essential reading." --Robert Kiyosaki, founder of the Rich Dad Company and Cashflow Technologies, Inc. "Richard Duncan makes a strong case for paying greater attention to the role of credit creation in understanding macroeconomic performances. He makes an even stronger case for aggressive government borrowing and spending in those areas that are critical for the society's future when the private sector is unable to perform that role. This view is particularly relevant at present when private sectors in so many countries are faced with seriously impaired balance sheets following their involvement in housing bubbles. With the private sector no longer maximizing profits but minimizing debt instead, a failure to implement Richard Duncan's fiscal policy recommendations may well result in an unnecessary implosion of the world economy." --Richard Koo, Chief Economist, Nomura Research Institute, Tokyo "Richard Duncan's "The New Depression" is firstly a masterful analysis of how the credit bubble expanded and why conventional economics failed, leaving policymakers asleep at the switch. Credit, as Duncan explains, was left totally unmoored by the ending of the gold reserve requirement and by changes that allowed banks to create credit almost at will. His Quantity Theory of Credit is compelling, and once accepted, his accounting of how the depression plays out is frightening and all too believable. This book will open your eyes and leave you clutching your wallet." --James Saft, columnist, Reuters, with works appearing in the International Herald Tribune

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Flap copy

When the United States stopped backing dollars with gold in 1968, the nature of money changed. All previous constraints on money and credit creation were removed, and a new economic paradigm took shape. Economic growth was no longer driven by capital accumulation and investment as it had been since before the Industrial Revolution. Instead, credit creation and consumption began to drive the economic dynamic. Over the following four decades, total debt in the United States expanded fiftyfold to $50 trillion. That explosion of paper money-denominated debt transformed the world by generating unprecedented wealth, profits, jobs, and tax revenues. In 2008, however, that debt could not be repaid, and The New Depression began. In "The Dollar Crisis," Richard Duncan explained why a severe global economic crisis was inevitable given the flaws in the post-Bretton Woods international monetary system. In The New Depression, he introduces an analytical framework, the Quantity Theory of Credit, that explains all aspects of the calamity now unfolding: its causes, the rationale for the government's policy response to the crisis, what is likely to happen next, and how those developments will affect asset prices and investment portfolios. The economic system that has emerged following the abandonment of sound money requires credit growth to survive. Yet the private sector can bear no additional debt and the government's creditworthiness is deteriorating rapidly. Should total credit begin to contract significantly, this New Depression will become a New Great Depression, with disastrous economic and geopolitical consequences. That outcome is not inevitable. This book describes what must be done to prevent it.

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About Richard Duncan

Richard Duncan is the author of two earlier books on the global economic crisis. The Dollar Crisis: Causes, Consequences, Cures explained why a worldwide economic calamity was inevitable given the flaws in the post-Bretton Woods international monetary system. It was an international bestseller. The Corruption of Capitalism described the long series of US policy mistakes responsible for the crisis. It also outlined the policies necessary to permanently resolve it. Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington, D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok. He also worked as a consultant for the IMF in Thailand during the Asia Crisis. He is now chief economist at Blackhorse Asset Management in Singapore. Richard studied economics and literature at Vanderbilt University and international finance at Babson College, and, between the two, spent a year travelling around the world as a backpacker.

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