Sold Out: How Broken Supply Chains, Surging Inflation, and Political Instability Will Sink the Global Economy

This book was a great read. From the history of the Supply Chain 1.0 to the understanding of how we have to hit Supply Chain 2.0 sooner than later and the things that will make that tough to do but necessaty. I was not sure what to expect from this book but I am so glad I read it. I have worked with our Supply Chain group for 20 years but never understood what they do until now. I even had a discussion at lunch today and could speak their language!!!

Going back to his first book, Currency Wars, published in 2011, Jim has a track record of predictions that often surprise the consensus narrative. His case in Sold Out, written in clear prose, is especially useful to investors and business owners trying to adapt to an environment of disrupted supply chains. My favorite excerpts are below.On predictive analytics:"The best predictive analytic method does not rely on linear extrapolation. That always produces deficient results except on rare occasions when it’s right by chance. This does not mean the past has no lessons for the future. The history of inflation has valuable lessons for forecasting inflationary trends, yet they don’t derive from simple projections of trends. They derive from the ability to identify causal factors, mapping those factors into a network of nodes, populating each node with data and natural language inputs, estimating the direction and strength of nodal outputs, and aggregating those outputs into a single inflation forecast. In plain English, history matters because you can derive causes, not because it’s ever the same twice. People, even policymakers, learn. Behavior is adaptive. When society passes through an adverse phase such as the late 1970s inflation, officials resolve not to let it happen again. That doesn’t mean inflation won’t happen again. It doesn’t mean officials won’t make new mistakes; they usually do. It does mean that certain response functions are highly predictable both as to policy and timing. It’s the Ph.D. equivalent of closing the barn door. This makes it easy to predict that the barn door will be closed. That gives you a head start on what comes next."On the consequences of the Fed becoming ever-more transparent:"Over eighteen-years from 1994 to 2012, the Fed had gone from non-transparency to full transparency to prognostication. That same span included the Asian financial crisis in 1998, the dot.com market collapse inn 2000, the Global Financial Crisis of 2008, and a set-up for the Pandemic Panic of 2020. Every novice statistics student knows correlation is not causation, yet the correlation between efforts at Fed transparency and frequent financial crises is striking. Perhaps a return to the days of a stealthy Fed operating through secrets shared at Harry’s Bar is worth consideration."On the prospects of deficit spending adding to inflationary pressures:"Inflation is the greatest enemy of sound money. It destroys capital formation, dissuades saving, amplifies capital misallocation, creates asset bubbles that soon burst and acts as a tax on the poor. Inflation has emerged in early 2022 as the result of lingering base effects, supply shocks in energy, supply chain disruption, and profligate federal spending. Whether inflation persists or accelerates has little to do with monetary policy and everything to do with consumer psychology. The danger is that inflation now, as opposed to inflationary expectations, causes behavioral changes including higher wage demands, job quits in search of higher pay, accelerated purchases of big-ticket durable goods and increasing leverage. In that world a feedback loop is created where demand-pull inflation feeds on itself and drives consumer prices higher faster than central bankers anticipate. Another threat is Modern Monetary Theory, which endorses unlimited spending financed by unlimited monetization by the Fed. Money printing alone does not cause inflation, but if it facilitates prodigal spending it may. That sets the stage for runaway inflation or a policy response that will precipitate a market crash and recession or both. All three inflation scenarios – persistence, acceleration, and crash – are antithetical to the price stability and policy consistency needed to improve supply chains. Apart from broader societal costs, inflation is as much an impediment to supply chain efficiency as the logistical factors described above. The best case is that inflation fades without a monetary policy blunder on the way. That’s a slim reed to lean on."On the importance of sound money to rebuild resilient supply chains:"In truth, the greatest challenge to investors is not asset allocation, it’s the demise of sound money. A sound money system is not imposed, it is earned through the trust of system members. Digital money may be a new preceptual mode, but that does not change human nature. Trust is a nice blend of right hemisphere emotion and left hemisphere calculation. It exists (or not) in villages and central bank board rooms."Sold Out is a must-read for investors, business owners, policymakers, or anyone interested in a road map for the trend toward re-shoring manufacturing and shortening supply chains in the 2020s.

Rickards writes like he talks, easy to understand. Always uses colorful stories that anyone can comprehend to illustrate his sometimes complex subject.

This is James Rickard's seventh book. The forecasts in the prior six were prophetic. Read the first six recreationally, or just read the reviews and note the pre-sales best seller status. Then read this book like it is your bible. If you want to read recreationally and flopo-dumbo take Rickard's advice, he has a newsletter. A book is a much better starting point for research. Everything you need is in one place and it is less expensive. The most productive approach is to read the book like an editor rather than a recreational reader. After a year, the book will lose half its value. After two years another book will come out and this book will lose all of its value. This review should evidence the book has been purchased, and not read. Reading this book is going to be a long-drawn-out process – two years. So this is your review in advance.It is what it is! Some say that Rickards does this as his loss leader. A public service that stands as advertisement for the single wealthy whale Rickards is looking to harpoon. But Rickards calls himself a patriot. He has learned from experience, meaning he has fallen on his face. He is an insider and a socialite practicing access journalism. That means: he recognizes policy response must be anticipated. The interactions with the power elite are sometimes cruel if Rickards disagrees with them. So if you ever meet Jim Rickards, just remind him that he thought the Russian Narrative was true. Then tell him I can beat him. I'm the fastest gun in the west.

I'm glad that Jim Rickards is such a good writer because he has tremendous knowledge and experience and travels to learn and know what is going on in the world and in the economy. He also knows what to worry about and why - and what to do and what not to do about it. I recommend reading his books.

Father was pleased with the book.

Liked how Richards explains the big picture in plain English. I will read again and follow the many references listed.

Excelente libro. Da un seguimiento de los problemas en la cadena de suministro y cómo es que un análisis erróneo de la situación en muchas ocasiones empeoró los resultados. Lo recomiendo.

I really enjoyed this book and finished it in less than a week which is fast for me. It is up-to-date, including data from mid-2022. Jim writes in a way that you don't need to be an economist to understand. It was fascinating how he describes the implosion of the existing supply chain and how re-building the global supply chain is like re-building the whole economy.

I loved the book - very up to date with some interesting take on current affairs. Jim has his own opinion and is not scared to share it, opening our minds to wider influences in the current environment. Looking forward to his next book! Or at least an interview online - he's very consistent with his observations which is a breath of fresh air in the current climate.

The author reports a detailed and reasonable description of how:1) the Supply Chain worked in the past and what it is suppossed to become in the future;2) the Role of Money, with a particular focus on inflation and its effects/relations with the Global Supply ChainIn conclusion an excellent book I suggest you to read asap.

Examines the economy in detail. Frightening.