James Rickards: Forecasting Long Term Cycles

Rickards, who also edits the Strategic Intelligence newsletter, thinks in multi-year and often multi-decade cycles. This, however, poses certain challenges.

One of these is dealing with friends, clients, and readers who want to know what day the economic reset—which smart money managers think is coming—will happen.

(Rickards says he has never met a major hedge fund manager who did not personally own gold.)

The lawyer and former accountant won’t bite.

Rickards likens accumulating system debts, central bank stock market manipulations, and financial institution off-book derivative trading to piling snow on a mountain. Just one snowflake will set the avalanche off—you just never know which one that will be.

Rickards’ favorite talking point is that during the 1998 Long-Term Capital Management crisis, the big banks bailed out the hedge fund. During the 2008 crisis, central banks bailed out the financial institutions.

But during the next crisis, the central banks themselves will need to be bailed out, says Rickards, possibly by the IMF and through hyper-printing of a global currency.

All of this, he says, would be highly inflationary and thus boost the value of hard assets relative to paper claims.

- Source, Sprott Money Blog