Friday, August 7, 2020

James Rickards & Peter Schiff Debate: Deflation vs Inflation

Quantitative easing by the Federal Reserve has undoubtedly expanded the Fed balance sheet to record levels, but the outcome of consumer and asset prices is yet to be seen. 

Jim Rickards, best-selling author, said that the Fed has failed to deliver inflation in the past when there was monetary stimulus, while Peter Schiff, CEO of Euro Pacific Capital, argued that inflation of asset prices is the likely outcome.

- Source, Kitco News

Wednesday, August 5, 2020

James Rickards: Brown Weeds, Not Green Shoots

Remember “green shoots?”

That was the ubiquitous phrase used by White House officials and TV talking heads in 2009 to describe how the U.S. economy was coming back to life after the 2008 global financial crisis.

The problem was we did not get green shoots, we got brown weeds.

The economy did recover but it was the slowest recovery in U.S. history. After the green shoots theory had been discredited, Treasury Secretary Tim Geithner promised a “recovery summer” in 2010.

That didn’t happen either.

The recovery did continue, but it took years for the stock market to return to the 2017 highs and even longer for unemployment to come down to levels that could be regarded as close to full employment.

Now, in the aftermath of the 2020 pandemic and market crash, the same voices are at it again.

The White House is talking about “pent-up demand” as the economy reopens and consumers flock to stores and restaurants to make up for the lost spending during the March to July pandemic lockdown.

But, the data shows that the “pent-up demand” theory is just as much of a mirage as the green shoots.

Many of the businesses that closed have failed in the meantime. They will never reopen and those lost jobs are never coming back. Even people who kept their jobs are not spending like it’s 2019.

Instead they’re saving at record levels.

Even the “reopening” of the economy is now in doubt. In some cities, the reopening was derailed by riots that left shopping districts in ruins.

In other cities, the reopening was stopped in its tracks by new outbreaks of the virus that led to new lockdowns and strict application of rules on wearing masks and social distancing.

There was a pick-up in retail sales in May, but it has disappeared as fast as it arrived because of the new outbreaks and the extension of the lockdown.

Meanwhile, if you’re trying to understand the economy, pay no attention to the stock market. The stock market is almost completely disconnected from the economy.

That’s partly because of the massive distortions caused by the Fed. But it’s also because the stock market is heavily weighted toward finance and technology.

Both sectors have been relatively unaffected by the pandemic and the resulting economic shock.

The industries that have been hurt are small-and-medium sized businesses in food, travel, resorts, bars, hotels, salons and other bricks-and-mortar or personal service establishments. Pain was also felt in mining, manufacturing and some other sectors.

These are important businesses in the economy, but they’re not nearly as important to major stock market indices as Amazon, Apple, Facebook, Google, Netflix, Microsoft and other mainly digital companies.

If you want to understand the economy, look around your own community to see how many stores are still closed, how many are never reopening, and how much sales are down among the relatively few survivors.

It’s not a pretty picture, and based on the dynamics of the virus it won’t get better anytime soon.

But there’s another primary reason why the economy won’t recover anytime soon. It’s not getting much coverage in the mainstream press, but it should.

It involves a major population shift that only happens once every two or three generations. And it’s happening now.

- Source, James Rickards via the Daily Reckoning

Monday, August 3, 2020

James Rickards Warns About the Rapidly Approaching Monetary Collapse

The Federal Reserve has gone past the point of no return and is unlikely to be able to unwind their balance sheet in the foreseeable future, according to best-selling author Jim Rickards and Peter Schiff, CEO of Euro Pacific Capital. 

In this second segment of the three-part interview, Rickards and Schiff discuss the consequences of the Federal Reserve paying for the nation’s expenses, or as Schiff called it, “free money.”

- Source, Kitco News

Friday, July 31, 2020

Jim Rickards & Peter Schiff Forecast: $15,000 Gold is Coming?

Gold prices have hit all-time highs, but industry heavyweights Jim Rickards, best-selling author, and Peter Schiff, CEO of Euro Pacific Capital, both think that the rally is far from over.

Rickards’ analysis points the gold price to $15,000 by 2025.

“I would put [gold at $15,000 an ounce before 2025,” Rickards told Kitco News. “If you just take the average of the prior bull markets: 1971 to 1980, nine years, 2200%, 1999 to 2011, a twelve-year bull market, about 700%. Just take the average, you don’t have to go to the higher of the two or extrapolate, if you just take the average of the two you would say the next bull market is going to be a little over 10 years and it’s going to go up 1500%,” he said.

$15,000 is the implied, non-inflation price of gold should a gold standard be adopted, theoretically speaking, said Rickards.

Schiff pointed out that historically, the Dow/gold ratio has seen much higher levels than today, suggesting that should the ratio retrace historic levels, the gold price should be much higher.

“Another way to look at it is to just look at the price of gold in relation to the Dow Jones, because you have historical reference points where twice in the prior century at significant bear market lows, the Dow traded down to a single ounce of gold: 1932 the Dow Jones was roughly equal to an ounce of gold, and in 1980, the Dow was roughly equal to an ounce of gold,” Schiff said.

Schiff added that at the current levels of the Dow Jones, the price of gold will have to equal $26,000 an ounce to achieve a 1:1 Dow/gold ratio.

Both Schiff and Rickards agreed that a major retracement in gold prices during the current bull market has already happened, and that another significant pullback in prices is unlikely to happen.

- Source, Kitco News

Monday, July 27, 2020

Gold: The Once and Future Money with James Rickards

James Rickards gives a presentation at the Cambridge House International conference, in which is explains the value of gold as money, its role throughout history and how it is going to once again come back to the forefront.

This is a flashback interview, however, the key points within this valuable presentation are more valuable now than ever, especially as gold and silver bullion are once again entering back into bull market territory.

Gold and silver are money, everything else is just an illusion.

Keep stacking and enjoy the interview.

- Video Source, Cambridge House

James Rickards: Why Gold, Why Now?

In 1971, Richard Nixon suspended the convertibility of the dollar to gold . It is widely believed that he suspended definitively, but according to Rickards, the suspension was to be temporary. Nixon wanted to organize a conference similar to that of 1944 from Bretton Woods. He wanted to devalue the dollar and then resume gold convertibility at a different price.

James Rickards maintains that two people who were with Nixon at Camp David in 1971 confirmed this version. One of them was the lawyer Kenneth Dam . The second, then secretary of the treasury Paul Volcker (in 1975-1979 president of the Fed). Both confirmed that the suspension of gold convertibility was to be temporary.

In 1971, a conference was held in Washington, which resulted in the signing of the Smithson Agreement. The dollar has been devalued from USD 35 per ounce of gold to USD 38 per ounce, and later to USD 42.22 per ounce. It was also devalued against the currencies of Germany, Japan, Great Britain, France and Italy.

However, there has never been a return to the gold standard. Germany and Japan were persuaded by Milton Friedman to make a floating exchange rate, and Nixon engaged in a re-election campaign in 1972, followed by the Watergate Affair, so he lost his focus on gold. The official convertibility of gold has not been restored, and in 1974 the International Monetary Fund announced that gold was not a monetary resource. Since then, it has become the subject of teaching at universities not in economics, but in mining - only in the context of raw materials.

However, something else happened - in 1974 President Ford signed the act repealing Roosevelt's executive regulation no. 6102 of 1933, which forbade citizens to own gold. This meant that after more than 40 years, gold was again legal. Although the official gold standard was dead, a new private gold standard began.

Three bull market

Until now, the price of gold was set officially - the decision on how many dollars could be exchanged for an ounce of gold was taken from above. As gold became the subject of free trade in the free market, we began to gradually learn its true value.

In the years 1971-1980 we observed the first bull market, when the price of gold increased by 2200 percent. In the years 1999-2011 we saw the second bull market - an increase of 760 percent. Currently, according to Rickards, we are seeing a third bull market in gold. Since December 2015, the price of gold has increased by 65 percent This is a good, strong increase, but in relation to the previous two periods of growth, it is only symbolic.
Three factors for further increases

James Rickards lists three potential factors that could push the price of gold to levels he has been talking about for a long time.
Loss of confidence in the dollar

By far the most important of these is losing faith in the US currency. Currently, as part of the fight against the effects of the coronavirus pandemic, the central bank is taking actions under the so-called non-standard monetary policy instruments (reprints of money) that have absolutely no precedent. Quantitative loosening can, in theory, bring some benefits during a recession to boost the economy. However, when it becomes the main tool in the fight against recession and is definitely abused, it does more harm than good. One of the consequences of such a turn of events may be, for example, hyperinflation, and this - as the case of Venezuela shows - can push gold prices to levels absolutely unheard of.
The bull market continues

Further increases may result from continued bull market. Based on the previous two bull market as benchmarks, the average profit would mean that by 2025 the price of gold would have been USD 14,000.

"New disaster"

As a third factor that could push gold prices to sky-high levels, Rickards points to another catastrophe - the second wave of pandemics, the collapse of the gold paper market due to inability to meet physical gold delivery obligations or, for example (Rickards opinion), Joe Biden's victory in the presidential election.

Anyway, it is known that gold did not say its last word. Given the scale of the previous two periods of growth, we are still at the very beginning of the bull market and there are many reasons to fear for the future.

Even if the probability of all these black scenarios is less than the probability of a house fire (and it is not), why is it so easy for us to buy home or flat insurance, and we question the legitimacy of having gold? Rickards has also provided answers to this question - since 1974, universities have been learning that gold is a mineral, not money.

- Source, Translated to English via Goldenmark

Friday, July 24, 2020

China deal: Why Trump Needs This to Win

The U.S. has completed phase one of a trade deal with China, signaling what could be a de-escalation of and even possible end to the trade wars.

This is a move that Trump desperately needs for re-election, said best-selling author, James Rickards.

“With slow growth I think you’ll see one, maybe two rate cuts, that will give the stock market a boost. 

The other thing is calm down the trade wars, it looks like we’re literally just days away from doing that with the Chinese, so if you get good news on trade wars and the prospect of rate cuts, that’s going to keep the stock markets up, and that’s going to help Trump for re-election.” 

Rickards told Kitco News.

- Source, Kitco News

Monday, July 20, 2020

Sprott Natural Resource Conference Preview: James Rickards

Join James Rickards, best-selling author of Currency Wars, at the 2020 Sprott Natural Resource Symposium July 22-25 2020.

- Source, Sprott Media

Friday, July 17, 2020

James Rickards: Depression for At Least Five Years, World Changed For a Generation

​​According to one expert, we are already in a depression which will last five years, and we are opening up to a very different world that will not recover from its economic, social, and psychological wounds for a generation. 

James Rickards, former Wall Street insider, lawyer, speaker, gold speculator, media commentator, and author of “Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos,” ​visits Liberty and Finance for the first time to discuss his upcoming keynote address at the 2020 Virtual Sprott Natural Resources Symposium, and to answer viewers’ questions. 

Mr. Rickards declares that it is still not too late to take action, to protect ourselves and our families from even greater harm, and to position ourselves to survive and thrive through the chaos ahead.

Tuesday, July 14, 2020

Jim Rickards Interview: Submit Your Questions, Liberty & Finance

Jim Rickards, former Wall Street insider, lawyer, speaker, gold speculator, media commentator, and author of “Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos,” ​is coming to Liberty and Finance for the first time to discuss his upcoming keynote address at the 2020 Virtual Sprott Natural Resources Symposium, and to answer your questions!

Friday, July 10, 2020

James Rickards: Road to Ruin The Animated Book Summary

The Road to Ruin is Jim Rickards new book about the elites plan for the next financial crisis. 

Building on his previous two books (Currency Wars, and Death of the Dollar (which is more accurately referred to as;

"The Likely Severe Loss of Confidence of the Current International Monetary System and it's Likely Replacements & What You Can Do To Protect Your Savings") this book explores how the next crisis will actually play out. 

Why it won't be solved by injecting more liquidity (as in 2008), but will rather be addressed with something cryptically referred to as ICE-9.

Wednesday, July 8, 2020

Jim Rickards: Economic Freeze is Here, Get Gold, Silver if You Can and Get Ready

We are potentially entering an “Ice-9” situation where the entire world may “freeze” over economically, said Jim Rickards, best-selling author of “The Road to Ruin” and “Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos.”

“If you shut down the New York stock exchange, and I can’t sell stocks and get cash, I’m going to sell my money market funds or redeem my money market funds. 

Then you’ve got to shut down the money market funds industry, and then people say ‘ok, I’ll go to the banks or the ATMs,’” he said. 

“And then you’ve got to shut down the banks so the point is, it spreads from exchange to money markets, to brokerage accounts, to banks, and you end up shutting down the entire system.”

- Source, Kitco News