Jim Rickards has produced a video of his hypothetical scenarios relating to currency wars. My view is that something like this could happen, but is unlikely. That is also his view.
The general trends he surveys are accurate. He thinks price inflation will go to 20%. Then he adds “and higher.” Here, I think he is incorrect. I think the Federal Reserve will cease inflating at that point to save the dollar from what he describes. But that would create a depression.
The key player is now China. It has the economic power to do what Rickards describes. This is not hypothetical. The only question is this: Would the Communist oligarchs actually do it? It would collapse their export sector. I think the odds are against their doing this.
He focuses on gold. But the Chinese could create a similar effect simply by selling all of its U.S. Treasury debt one morning. The Federal Reserve would then have to buy these IOUs to keep U.S. interest rates down. But recall this: that would be only $1.1 trillion of fiat money. The FED did that and more in 2008-9. The FED still runs the show. China doesn’t. Not yet.