The Road to Ruin

Chapter 1

This Is the End

Nice, nice, very nice- So many different people In the same device.

From Cat's Cradle, a novel by Kurt Vonnegut, 1963

The Conversation

Aureole is an elegant, high-ceilinged restaurant of sleek modern design on West Forty-second Street in Manhattan. It sits midway between tourist throngs in Times Square and Bryant Park's greenery. The neoclassical New York Public Library, whose entrance is attended by the twin marble lions, Patience and Fortitude, looms nearby.

I was there on a pleasant evening in June 2014 with three companions at a window table. We arrived at Aureole after a short walk from the library lecture hall where I had earlier delivered a talk on international finance.

The library offered free access to the lecture. Free access to any event in New York City guarantees an eclectic audience, more diverse than my typical institutional presentation. One gentleman in attendance wore an orange suit, bow tie, sunglasses, and lime-green derby hat. He was seated in the front row. His appearance did not raise an eyebrow.

New Yorkers are not only bold dressers, they're typically astute. In the question-and-answer session after the lecture, one listener raised his hand and said, "I agree with your warnings about systemic risk, but I'm stuck in a company 401(k). My only options are equities and money market funds. What should I do?" My initial advice was "Quit your job."

Then I said, "Seriously, move from equities to half cash. That leaves you some upside with lower volatility, and you'll have optionality as visibility improves." That was all he could do. As I gave the advice, I realized millions of Americans were stuck in the same stock market trap.

At Aureole, it was time to relax. The crowd was the usual midtown mix of moguls and models. I was with three brilliant women. To my left was Christina Polischuk, retired top adviser to Barclays Global Investors. Barclays was one of the world's largest asset managers

James Rickards is the Editor of Strategic Intelligence a financial newsletter. He is The New York Times bestselling author of The New Great Depression (2020), Aftermath (2019), The Road to Ruin (2016), The New Case for Gold (2016), The Death of Money (2014), and Currency Wars (2011) from Penguin Random House. He is an investment advisor, lawyer, inventor, and economist, and has held senior positions at Citibank, Long-Term Capital Management, and Caxton Associates. In 1998, he was the principal negotiator of the rescue of LTCM sponsored by the Federal Reserve. His clients include institutional investors and government directorates. He is an op-ed contributor to the Financial Times, Evening Standard, The Telegraph, New York Times, and Washington Post, and has been interviewed by BBC, CNN, NPR, CSPAN, CNBC, Bloomberg, Fox, and The Wall Street Journal. Mr. Rickards is a guest lecturer in globalization and finance at The Johns Hopkins University, Georgetown University, Trinity College Dublin, The Kellogg School at Northwestern, the U.S. Army War College and the School of Advanced International Studies. He has presented papers on risk at Singularity University, the Applied Physics Laboratory, and the Los Alamos National Laboratory. He is an advisor on capital markets to the U.S. intelligence community, and the Office of the Secretary of Defense, and is on the Advisory Board of the FDD Center on Economic and Financial Power in Washington DC. Mr. Rickards holds an LL.M. (Taxation) from the NYU School of Law; a J.D. from the University of Pennsylvania Law School; an M.A. in international economics from SAIS, and a B.A. (with honors) from Johns Hopkins. He lives in New Hampshire.


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