In this episode of Smart Talk, Andrew Mazzone and Richard Duncan discuss credit creation during the World War, global economic crisis, consumer debt, history of currency, collapse of the gold standard and the current US economy and where it is headed.
Richard Duncan is the author of three books on the global economic crisis. The Dollar Crisis: Causes, Consequences, Cures (John Wiley & Sons, 2003, updated 2005), The Corruption of Capitalism (CLSA,2009) and his latest book is The New Depression: The Breakdown Of The Paper Money Economy (John Wiley & Sons, 2012). 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 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 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).
In this Smart Talk video, Mr. Duncan gives us a history lesson about the US public debt as a percentage of GDP during the World War I, The Great Depression and World War II. Richard Duncan also states that the government felt it was necessary to keep economy growing by expending debt to keep the markets growing. Other reasons why there may be another great depression in the states is that many US based multinational corporations are moving jobs outside the US. Furthermore, there has been a tremendous decline of manufacturing jobs and Union Members. In 1948, there has been 31% of US workers in the Unions. However, in 2010 this number is only 11.9%. (Source: BLS) To prevent this downfall, Richard Duncan proposes that middle class and Union workers ensure there are politicians and policies in place that benefit the middle class from further downfall.
Richard Duncan believes that the Fed may still continue to keep the inflated bubbles going for several more years until someone will be held accountable for all of the accumulated debt the country has created throughout the decades.
Another great topic that was brought up in this discussion is will the China become the new world reserve currency and will it overthrow the mighty dollar?
As Mr. Duncan explains, China has one of the biggest bubbles of the world right now with slowing economy along with nonperforming loans. In order for China to become a new global reserve currency, it needs to get its currency (yuan) out in the global economy. Due to that, it needs to have trade deficits. US dollar continues its reign as the global reserve currency because it has a massive trade deficit around the world and everyone is flooded with dollars. China has a massive global trade surplus, which needs their yuan to be more available around the world if they want to make it a reserve currency in the future. Mr. Duncan believe US dollar will remain the leader in the global financial system for many more years to come despite China buying more Gold than the world produces.
At the end of this episode, Andrew Mazzone ask Mr. Duncan for some investment advice on what the type of investments he likes right now, whether to invest real estate in Asia or USA along with other great advice. Watch this episode to learn more on where you should safely invest your money right now.
Henry George School of Social Science has launched Smart Talk, a series of discussions with leading economists around the world moderated by Andrew Mazzone, president of the HGS board of trustees. We invite you to watch the Smart Talk videos of discussions with some of the most talked-about economic and social thinkers of our times, please visit