That means banks will close, as will exchanges. Money-market funds will be inaccessible. Forget trying to get your hands on money.
Rickards, who was the principal negotiator of the 1998 bailout of Long-Term Capital Management as the hedge fund’s general counsel, calls this new world “ice-nine,” after a fictitious substance in Kurt Vonnegut’s “Cat’s Cradle.” Freezing customer funds in bank accounts is what happened in Cyprus is 2012 and Greece in 2015, he says. In the U.S., the Securities and Exchange Commission adopted a rule in 2014 that lets money-market funds suspend redemptions.
Prefer stockpiling cash? Governments are eliminating high-denomination bills, and Kenneth Rogoff, a former IMF chief economist, has written a book that Rickards describes as “an elite step-by-step plan to eliminate cash entirely.”
Then, Rickards says, there are rules on banks and other institutions. Capital controls could be imposed to keep money from fleeing across borders. And the U.S. is still under the state of emergency declared by President George W. Bush days after the Sept. 11, 2001, terrorist attacks and renewed annually since then.
Rickards, who now advises the Defense Department and U.S.
- Source, Market Watch