Richard Duncan: How to Finance the Next American Century
Tom welcomes back Richard Duncan to the show. Richard is a macroeconomist and the author of four books on the global economic crisis including his most recent “The Money Revolution”.
He started writing his new book at the beginning of 2018 and it was nearly complete but then the pandemic started. Global events necessitated a pause in writing the book to see how things would play out. In total Richard took four years to write it.
The book discusses the history of money and credit and the lessons that can be learned from the history of the Federal Reserve. Everyone must understand how the Fed functions because it’s likely the most important corporation in the world. It determines globally what happens to markets and economies. The book discusses the total credit of the United States which includes all debt by all entities. In 1974 that was one trillion by 2008 we were at 50 trillion. Today we’re over 90 trillion dollars and this has fundamentally changed the nature of our economic system.
Our economic system today should be called creditism because the system today no longer utilizes capital savings. We are addicted to credit growth. Whenever credit contracts we enter a recession or depression economically.
The book discusses the causes of inflation and deflation. It reveals that in recent decades changes in the money supply haven’t impacted inflation that much. The key has been globalization which has been highly deflationary. Inflation is not just a monetary phenomenon as it is often affected by surprise supply shocks like Russia’s invasion of Ukraine.
He dives deeply into explaining a possible way out of our current economic quagmire. By leveraging growth via funding improvements in technology, research, and manufacturing.
Talking Points From This Episode
- Overview of his latest book.
- Departing the gold standard and the rise of creditism.
- Why inflation is not always a monetary phenomenon.
- Fixing the future by researching and improving technology.
Time Stamp References:
0:00 – Introduction
1:00 – Book Overview
9:00 – Credit-ism
10:53 – Solutions
12:00 – Globalization & Deflation
24:00 – Fixing The Future
27:33 – Dollar Scenarios
30:00 – Growth & Innovation
31:20 – Investment Programs
38:00 – Government Action?
41:30 – Incentivizing
45:40 – Energy & Environment
48:40 – Manufacturing & Tech.
51:20 – His Book & Macrowatch
55:55 – Wrap Up
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Richard Duncan is the author of four books analyzing the causes and the effects of the economic crises that have brought the global economy to the brink of collapse during recent decades.
The Dollar Crisis: Causes, Consequences, Cures (John Wiley & Sons, 2003, updated 2005), predicted the global economic disaster that began in 2008 with extraordinary accuracy. It was an international bestseller. The Corruption of Capitalism: A strategy to re-balance the global economy and restore sustainable growth (CLSA Books, 2009) described the long series of US policy mistakes responsible for the Crisis of 2008. The New Depression: The Breakdown Of The Paper Money Economy (John Wiley & Sons, 2012) introduced an important new analytical framework, The Quantity Theory of Credit, that explained all aspects of the global economic crisis that began in 2008: its causes, the rationale for the government’s policy response to the crisis, and likely future developments.
His latest book is The Money Revolution: How to Finance the Next American Century (John Wiley & Sons, 2022). The first two parts of the book describe the evolution of Money and Credit over the last century. These include a detailed history of the Federal Reserve since its establishment in 1913 and a discussion of the transformation of our economic system from Capitalism to Creditism during the five decades since Dollars ceased to be backed by Gold. Parts One and Two show that a “Money Revolution” has occurred and fundamentally altered the way the global economy functions. Part Three demonstrates that this Money Revolution opens up unprecedented opportunities for the United States to radically accelerate economic growth, enhance human well-being and strengthen US national security by investing aggressively in the Industries and Technologies of the Future.
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. Richard currently publishes Macro Watch, the bi-monthly video newsletter he founded in 2013.
Richard has appeared frequently on CNBC, CNN, BBC, and Bloomberg Television, as well as on BBC World Service Radio. He has published articles in The Financial Times, The Far East Economic Review, FinanceAsia, and CFO Asia. He is also a well-known speaker whose audiences have included The World Economic Forum’s East Asia Economic Summit in Singapore, The EuroFinance Conference in Copenhagen, The Chief Financial Officers’ Roundtable in Shanghai, and The World Knowledge Forum in Seoul.
Richard studied literature and economics at Vanderbilt University (1983) and international finance at Babson College (1986); and, between the two, spent a year traveling around the world as a backpacker.