Monday, October 28, 2019

Jim Rickards: How Best to Prepare for the Next Financial Crisis

James Rickards is predicting chaos on an unprecedented scale. The financial expert, investment advisor and New York Times bestselling author warns that the most devastating financial crisis yet could be just around the corner.

His suggestions for how we can protect our wealth in tumultuous times are at times counterintuitive, including steering clear of high-valuation tech stocks and being wary of “overhyped” passive investing.

In this video with Moneywise editor Rachel Rickard Straus, Jim also warns viewers to watch out for tricks being played on us all by behavioural economists.

While his predictions are provocative, he has been right in the past, sounding the alarm on currency manipulation and foreseeing the rise of negative interest rates.

Lifestyles could change immeasurably over the next century, with progress by no means a given, he predicts. So, fasten your seatbelt (or pour yourself a cup of tea), and watch our interview with Jim.

- Source, Moneywise

Saturday, October 26, 2019

Rickards: The FED May Cause the Next Recession by Trying to Get Ready for the Next One

In a recent interview conducted at the Nasdaq stock exchange headquarters in New York, macro analyst and financial commentator James Rickards warned of a potential upcoming financial panic in the run-up to the release of his latest and final book in a series of four called “Aftermath“.

The bestselling author thinks that the US Federal Reserve (FED) raising the interest rate from zero all the way to the current 2.25% to 2.5% over the last couple of years may be a ploy from the central bank to give it the opportunity to then cut rates in the event of another potential economic downturn.

Rickards has had a long history on the frontlines of financial panics. He had a role as the chief legal counsel for the now-defunct hedge fund Long-Term Capital Management. The firm was infamous for the bailout it received organised by the Federal Reserve Bank of New York to the tune of $3.625 billion following heavy losses for the firm following the 1997 and 1998 Asian and Russian financial panics.

Since then, Rickards has spent time on the sidelines and bore witness to the 2008 financial crisis and subsequent bailout – this time directly from the US Treasury.

Moving forward another 10 years, he thinks we may soon be on the precipice of another major economic downturn, but this time the mess will be too big for even state-backed central banks like the FED to get us out of trouble.

- Source, Yahoo Business

Monday, October 21, 2019

Jim Rickards: Communist China Thought They Could Mimic Capitalism

The key word there is "mimic." The Communist Party [of China] thought they could finesse and control it, but it is turning out markets have a mind of their own. But the "Empire" will strike back, they have an enormous arsenal of tools they can use to try to fight this bubble.

In the end, all bubbles burst, I expect this will go down about 70% or 80% before it runs its course, but bubbles never go down in a straight line...

This could take multiple years and there could be rallies in the meantime. They need to cut interest rates, cut reserve requirements and cheapen the Yuan, sell their reserves and use that to prop up their markets. There is a lot they can do, but this is just going to grind lower...

I expect China will do something, they are probably debating it right now... They do have room, unlike the U.S., because we should have raised rates when we could have back in 2010, China still has room to cut rates, and they've got $3.5 trillion in reserves, that is a lot of dry powder.

However, this has implications, it has what the IMF calls "spillover effects."

If they have to sell their reserves to raise funds to bail out their market, what are they selling? [U.S.] Treasuries. That puts upward pressure on U.S. interest rates, now the trend in interest rates is probably down because of deflation, but in the short run, this is going to make the dollar even stronger and make deflation worse.

By the way, everything that is going on in China sort of started with the Fed. They went though a "kamikaze mission," as I call it, talking about raising rates all year. The eocnomy was visibly slowing, deflation had the upper hand, why on Earth is Janet Yellen talking about raising rates?

But as long as China was pegged, our deflation became their deflation. It was killing them so they broke the peg, but then the markets are crashing, so all these things are connected. It is not that China causes our problems, the problems actually started here, went to China, and now they are coming back...

Thursday, October 17, 2019

Jim Rickards: Should you be Preparing for a Market Collapse?

America's economy is doing pretty well these days. Considering what might happen in the event that it collapses is likely among the last things most wish to do. 

Wall Street veteran Jim Rickards believes that the time is now to prepare for what happens when the good years draw to a close. 

His latest book, the bestseller 'Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos,' details what he believes will transpire as a result of the next global economic meltdown, as well as what ordinary folks can do to shield themselves from fiscal ruination.