Tuesday, July 30, 2013

People Don't Read Contracts

How many people in the gold market – whether it’s LBMA standard contracts, forward gold, allocated, unallocated, Comex – think of all the players who would raise their hand and if you say to them do you own gold, they say yes I do, and then when you press them you find out they don’t own physical gold – at all. Not even close. They own some claim of some kind. People don’t read contracts, they don’t read the exchange rulebooks – I actually have.

‘People don’t understand leasing,’ he adds. ‘They somehow think that if the federal government leases gold to JPMorgan, that JPMorgan backs up a truck and drives away. That is not what happens. The gold stays where it is. The gold doesn’t go anywhere. The gold’s in Fort Knox, the gold’s at West Point, the gold’s at the Federal Reserve.

‘When you look at all this, it’s very clear that the losers are not going to be the banks and the government. The losers are going to be the institutions and the individuals who think they own gold and don’t.’

- Source, Jim Rickards via Money Morning:

Sunday, July 28, 2013

If the Government Tried to Confiscate Gold

If the government tried to confiscate gold today, there would be various forms of resistance. The government knows this. So they wouldn't issue that order, because they know it couldn't be enforced, and it might cause various kinds of civil disobedience or push-back, etc.

As long as you can own gold, you can put yourself on your own gold standard by converting paper money to gold. I recommend you do that to some extent. Not all in, but I recommend having 10% of your investable assets in gold for the conservative investor, and maybe 20% for the aggressive investor. No more than that.

- Source, Jim Rickards via Wall Street Pit:

Friday, July 26, 2013

People Can Vote With Their Feet

"There isn't a central bank in the world that wants to go back to a gold standard. But that’s not the point. The point is whether they will have to.

I've had conversations with several of the Federal Reserve Bank presidents. When you ask them point-blank, “Is there a theoretical limit to the Fed’s balance sheet?” they say no. They say there are policy reasons to make it higher or lower, but that there’s no limit to the amount of money you can print.

That is completely wrong. That’s what they say; that’s how they think; and that’s how they act. But in their heart of hearts, some people at the Fed know it’s wrong. Luckily, people can vote with their feet.

I always tell people who say we’re not on the gold standard that, in a way, we are. You can put yourself on a personal gold standard just by buying gold. In other words, if you think that the value of paper money will be in some jeopardy, or confidence in paper money may be lost, one way to protect yourself is by buying gold, and there’s nothing stopping you.

The typical rejoinder is, “What’s the point of owning gold? They’re just going to confiscate it, like Roosevelt did in 1933?”

I find that extremely unlikely."

- Source, Jim Rickards via Wall Street Pit:

Wednesday, July 24, 2013

Nouriel Roubini vs James Rickards

Nouriel Roubini also known as Dr. Doom Nouriel Roubini,decided to ask James Rickards, author of "Currency Wars," why he advocates for a return to the gold standard in his book "currency wars," when it was this return to gold that was a direct cause of the Great Depression. James Rickards responded by pointing out that it was not the return to gold, but rather the return to gold at the pre-WWI price that necessitated deflation, which exacerbated the depression. Nouriel then went to town on Rickards with, what became, full out, personal insults. He called James Rickards "arrogant" and said that the Wizard of OZ is a better read for those who want to understand the gold debate than Currency Wars.

- Sources:

Tuesday, July 16, 2013

The Fed Will Taper In September Or Never

To taper or not to taper. That is the question being asked at the Federal Reserve. Do we stop printing $85 billion per month, or not. And guess what?Today, we learned that half the voting members want it to end -- not even taper -- by year end. We talk with Jim Rickards about this and the big trouble in China.

Also, there are 12 members of the Federal Open Market Committee who vote on monetary policy eight times per year. The last meeting was on June 19th and it caused quite a stir. That's because we learned the committee was more bent on winding down QE -- so-called tapering. Well, the *minutes* of that meeting were released today, and they said half the members thought QE should *end* by year-end. This is the most descent at these meetings we've seen in years. Bob speaks with James Rickards, author of Currency Wars about mutiny at the Fed.

- Source, Russia Today:

Friday, July 12, 2013

Destination For Gold is $7000

"It all depends on Fed policy," said James Rickards, managing director at Tangent Capital, who expects deflation fears to outweigh the Fed's desire to taper. Right now, he said, the fact that real rates are above inflation is a bearish signal for gold, and expectations of continued policy tightening is also pushing down prices.

"The case for buying gold is that the Fed is going to back off," he said. "They're not going to taper later this year. They'll actually going to increase asset purchases because deflation is winning the tug of war between deflation and inflation. Deflation is the Fed's worst nightmare."

"In the next two months, the Fed is going to make it clear that they will not taper," he predicts. "That's very bullish for gold."

Aside from Fed policy, Rickards expects China to start buying gold at these low levels, up to perhaps 4,000 tons. "People will say 'Why is China buying gold if it's so worthless?' " he said.

Rickards said that the destination for gold is $7,000 per ounce, although tightening of Fed policy could drive it down to $1,000 on the way there.

- Source, CNBC:

Wednesday, July 10, 2013

The Bottom in Gold is Near

Jim Rickards, Tangent Capital, and Tom McClellan, The McClellan Market Report, debate whether there are reasons to "be in love" with the precious metal at this time.

- Source, CNBC:

Friday, July 5, 2013

Wages Are Globally Competitive

Now that wages are globally competitive, Chinese capital and German technology will move in quickly, create jobs.

- James Rickards via Twitter:

Wednesday, July 3, 2013

U.S Depression May Last for Decades

Greek depression almost over. Sharp & hard; great recovery potential. U.S. depression may last decades, like Japan.

- Jim Rickards via his Twitter feed: