Podcast Summary

Podcast: New Books Network

Episode: Richard Duncan, "The Money Revolution: How to Finance the Next American Century" (John Wiley & Sons, 2022)
Host: Caleb Zakrin
Guest: Richard Duncan
Date: October 6, 2025

Main Theme & Purpose

This episode features an in-depth conversation between host Caleb Zakrin and economist Richard Duncan, centering on Duncan’s latest book, The Money Revolution: How to Finance the Next American Century. The discussion traces the history and evolution of the U.S. monetary system, the changing nature of credit and money, the impact of the Federal Reserve's choices, globalization, inflation, and the urgent argument for substantial government investment in technology and infrastructure to sustain American economic dynamism.

Key Discussion Points and Insights

Richard Duncan’s Background (01:33—06:24)

• Duncan outlines his extensive experience in global finance, especially in Asia during economic booms and crises.
• First-hand witness and participant in the Asian financial crisis, leading to work with the IMF and World Bank (03:00—05:40).
• Author of multiple books on economics and currently runs Macro Watch, a video newsletter.

Creation and Evolution of the Federal Reserve (06:24—12:26)

• Origins: U.S. banking panics led to the creation of a decentralized central bank in 1913 (Fed). (06:41—07:49)
• Quote: “Banking leaders and political leaders all realized that they needed to have a central bank. But there was such opposition...that they had to strike a compromise.” — Richard Duncan (06:45)
• The Fed’s initial limitations and failure to halt the Great Depression; WWII finally shifts government and Fed interventionist policy. (09:25—11:58)
• Role of war: Massive fiscal and monetary expansion to finance WWII ended the Depression and set a precedent for direct crisis intervention.

The Fed, Bretton Woods, and Post-Gold Standard Era (12:26—19:18)

• Lessons from the Depression vs. 2008 Crisis (12:52—16:24)
  • 2008: The Fed, learning from Ben Bernanke’s study of the Depression, proactively issued massive quantitative easing to avoid collapse.
  • Similar aggressive interventions during COVID-19.
• Rapid expansion of government debt and Fed balance sheet in 21st-century crises, followed by inflation but also quick recovery.

Credit and Money: The Modern Relationship (19:18—25:59)

• Pre-1971: Money (gold) and credit distinct; post-1971: they’re largely indistinguishable; the U.S. can create “effectively limitless amounts of credit.” (19:45—21:25)
• Fractional reserve banking explained—reserve requirements drastically lowered over decades, allowing explosive credit growth.
  • “The higher the level of reserves...the less credit they could create. But if the required reserve ratio was reduced, they could create more credit.” — Richard Duncan (22:15)
• Proposal that capitalism has evolved into “creditism”—modern growth is credit-fueled, not savings- and investment-driven. (23:45—25:25)

The Causes and Nuances of Inflation (26:48—37:09)

• Globalization’s disinflationary effect: Offshoring and cheap labor suppress domestic inflation even amid credit and deficit growth (27:21—31:10)
• 2021–2022 inflation surge attributed to:
  • COVID-related supply chain shocks and surges in demand for goods.
  • Russia’s invasion of Ukraine exacerbating food and energy price inflation.
  • Massive government stimulus payments boosting demand.
• Quote: “It was globalization that had driven down the inflation and the interest rates in the United States to begin with. Now with these supply chain bottlenecks and war, it represented a partial reversal of globalization and we got a spike in inflation.” — Richard Duncan (33:41)
• Argues it is better to overdo stimulus than risk a Depression-level crisis.

Economic Schools of Thought & Policy Pragmatism (37:09—40:22)

• Duncan resists strict alignment, advocating pragmatic adaptation to prevailing conditions.
  • “I would consider myself a pragmatist. I think different economic philosophies are appropriate for different economic times and conditions.” — Richard Duncan (37:32)
• Highlights that in the post-gold, post-Bretton Woods world, government can borrow and invest heavily without (necessarily) triggering runaway inflation if done wisely.
• Advocates for large-scale public investment in technologies — AI, biotech, green energy, etc. — to turbocharge growth.

Industrial Policy, National Security, and the Role of Government (41:20—48:11)

• COVID forced unprecedented government stimulus, delaying Duncan’s book release and complicating his pro-investment message due to the inflation spike.
• Encouraged by the CHIPS Act and the Inflation Reduction Act but considers them insufficient.
• Urges:
  • Continuous, large-scale investment in technology and R&D to maintain U.S. technological and military edge over China.
  • Government-private sector joint ventures with public retaining a significant equity stake, turning innovation into both economic and fiscal gains.
• Warns that if China overtakes the U.S. in R&D, “they will rule the world.” (45:21)
  • “If China develops artificial intelligence before we do, for instance, they will rule the world.” — Richard Duncan (44:30)

The Dollar Standard and Global Trade Dynamics (48:11—51:33)

• U.S. trade deficits underpin the entire global economic system—dollar liquidity supports worldwide export growth.
  • “The US current account deficit provides the liquidity that the global economy runs on. It provides the dollars.” — Richard Duncan (49:24)
• Argues against the plausibility or desirability of a return to a hard commodity-backed monetary system.
• Predicts the continued stability and dominance of the “dollar standard.”

Macro Watch and Duncan’s Ongoing Work (51:33—54:16)

• Duncan briefly describes Macro Watch, his subscription video newsletter, where he analyzes global macroeconomic developments and their potential to impact asset prices.
• Recent topics include Fed policies, global credit flows, and the strategic significance of the dollar standard.

Notable Quotes & Memorable Moments

• On the Fed’s creation:
  “Banking leaders and political leaders all realized that they needed to have a central bank. But there was such opposition...that they had to strike a compromise.”
  — Richard Duncan (06:45)

• On the Great Depression:
  “The Fed really didn’t do what it was created to do. It didn’t step in and provide enough liquidity to prevent that very serious banking panic from turning into a depression.”
  — Richard Duncan (10:38)

• On the evolution of the U.S. economy:
  “I suggest that capitalism evolved into what I call creditism. Capitalism was an economic system where businessmen would invest, some would make a profit...That’s not the dynamic that drives our system anymore.”
  — Richard Duncan (23:45)

• On inflation’s root causes:
  “It was globalization that had driven down...inflation and the interest rates...Now with these supply chain bottlenecks and war, it represented a partial reversal of globalization and we got a spike in inflation.”
  — Richard Duncan (33:41)

• On pragmatic economic thought:
  “I would consider myself a pragmatist. I think different economic philosophies are appropriate for different economic times and conditions.”
  — Richard Duncan (37:32)

• On national security and future investment:
  “If China develops artificial intelligence before we do, for instance, they will rule the world.”
  — Richard Duncan (44:30)

• On the centrality of the dollar:
  “The US current account deficit provides the liquidity that the global economy runs on. It provides the dollars.”
  — Richard Duncan (49:24)

Important Timestamps

• 01:33 – 06:24: Richard Duncan’s biography and early career in Asian markets
• 06:41 – 12:26: Creation of the Federal Reserve and its evolution through the Great Depression and WWII
• 12:52 – 19:18: The shift from the gold standard, credit expansion, and crisis intervention frameworks
• 19:45 – 25:59: Explaining the relationship between credit, money, and economic growth (“creditism”)
• 26:48 – 37:09: Roots of recent inflation, impact of globalization, COVID, and government stimulus
• 37:32 – 40:22: Economic philosophies and policy flexibility
• 41:20 – 48:11: Industrial policy, U.S.-China economic rivalry, and need for government-led investment
• 48:11 – 51:33: The global dollar standard and the mechanics of U.S. trade deficits
• 51:33 – 54:16: Macro Watch and Duncan’s ongoing projects

Final Notes

This episode offers a comprehensive yet approachable tour through the history and present of American and global finance, demonstrating how credit creation, global trade, and government intervention continue to shape the world economy. Duncan calls for bold, sustained government investment in critical technologies, arguing that the risk of doing too little outweighs the risk of doing too much. He also defends the durability of the dollar-dominated world monetary system.

Listeners interested in economics, public policy, or global affairs will find this discussion both enlightening and provocative, with themes highly relevant for the coming decades.