Jim Rickards: When the gamification of finance erodes the value of money these assets will prevail

Jim Rickards: The Next Crisis Skyrockets Gold To $15,000

Jim Rickards: We’ve Reached Peak Inflation; The Real Risk in 2022 and Why Cash Is Critical

Last week Stansberry Investor's Daniela Cambone interviewed Jim Rickards and got his take on inflation. 

We think this is a solid interview and Jim makes some good reasonable explanations as to why inflation has done what it has. 

Rickards puts much of the blame squarely in two places: Supply chain problems, and Biden administration policies.

When asked: Why did used car prices go up? Rickards responded with ‘No new cars were available due to chip issues. People bought used cars.’

His explanation for energy problems is equally sensible. The push into clean energy was too fast and poorly executed. Smart energy companies took advantage of that, as did Russia’s Putin.

The thesis essentially is that money printed isn’t the cause of inflation. The sanitization of the printing via RRP and bond allocations dampen the inflationary effect. 

For Rickards, the supply chains and Biden Administration fiscal policies are the culprit.

The only area he did not touch upon was rents. That shoe has yet to drop fully. Will it be as easily explained? The other point he makes is the Fed may be raising rates into a recession. Enjoy.

"Expect inflation to come down very quickly," due to incoming rate hikes expected from the Federal Reserve, says NYT best-selling author Jim Rickards.

You could see severe, "tightening into weakness," with a potential of three rate hikes next year, he predicts with our Daniela Cambone during the premiere of this year's series, Outlook 2022: The Tipping Point.

In order for gold to gain momentum and rise in price, "the dollar has to get weaker," he says. Having money on the sidelines is vital, according to Rickards, in order to be nimble into the coming year.

When asked about the stored value of holding money in Bitcoin, he asserts that, "when you get to the center, the core of Bitcoin's apple there's nothing there."

- Source, Zero Hedge

Jim Rickards: How the Federal Reserve Bank are going to bungle monetary policy in 2022

Today in our latest interview, Jim Rickards explains how the Federal Reserve Bank are only going to bungle monetary policy in 2022 and you should be more concerned about disinflation than inflation. Plus, the three books you need to read to be a better investor.

- Source, ABC Bullion

Jim Rickards: The Fed Does Not Have Our Backs!

James Rickards discusses the history of the Federal Reserve and delves into how they are only out to protect the "big fish". They could care less about the man on the street.

Will the Federal Reserve be able to save the system from total collapse in the coming, pending crisis? Tune in to find out if James Rickards believes they will be able to kick the can a little further.

Regardless, turbulent times lay ahead. Keep stacking.

- Video Source

Jim Rickards: All Currencies Are Going to Devalue Simultaneously Against Gold, Prices Are Destined to Move Higher

The IMF has a printing press as powerful as the Fed and ECB printing presses and can flood the world with their world money. Displacing the dollar would involve a meeting and agreement similar to the original Bretton Woods agreement of 1944. The agreement could take many forms. Still, the process would conform to what many call The Great Reset.

This process has been underway since 1969 when the SDR was created. Several issues of SDRs were distributed between 1970 and 1981, then none were issued until 2009 in the aftermath of the Global Financial Crisis of 2008. A new issue was distributed earlier this year.

Global elites see the COVID pandemic and climate alarm as a two-headed Trojan Horse that can be used to foist SDRs on a global population who have suddenly become accustomed to following government orders.

The recent COP26 meeting of elite climate alarmists and heads of state in Glasgow highlighted the use of central bankers and financial regulation to push the alarmist agenda by cutting off lending and underwriting services to energy companies that don’t promote renewables or that pursue oil and gas exploration (go here to learn all about a coming global climate tax, and also, how you can actually profit from it).

So, yes, the trend toward a single world currency is real also.

Still, things don’t happen that quickly in elite circles. Even Bretton Woods took over two years to design and another five years to implement even under the duress of World War II. The transition from sterling to the U.S. dollar as the leading reserve currency took thirty years from 1914 to 1944. As they say, it’s complicated.

At one level, there is no immediate change. A CBDC dollar is still a dollar. A CBDC euro is still a euro. Absent a new Bretton Woods type fixed-exchange rate regime, these currencies would still fluctuate against each other. Our analyses would continue as before. Still, there are three huge changes that could emerge from The Great Reset.

The first is that a new global currency regime would be an opportunity to devalue all major currencies in order to promote inflation and steal wealth from savers. All currencies cannot devalue against all other currencies at the same time; that’s a mathematical impossibility.

Yet, all currencies could devalue simultaneously against gold. This could easily drive gold prices to $5,000 per ounce or much higher to achieve the desired inflation. EUR/USD might remain around $1.16, but both EUR and USD would be worth far less when measured by weight of gold. This would be an accelerated version of what happened in stages between 1925 and 1933, between 1971 and 1980, and again between 1999 and 2011.

The second change would be that CBDCs make it much easier to impose negative interest rates, confiscations, and account freezes on some or all account holders. This can be used for simple policy purposes or as a tool of the total surveillance state. Surveillance of incorrect behavior as defined by the Communist Party is the real driver of the digital yuan more than any aspirations to a yuan reserve currency role.

The third change would be the widespread issuance of SDRs and their adoption as the sole global reserve currency. A new Bretton Woods could force countries to hold 100% of their reserves in SDRs, and major corporations could be forced to maintain their books in SDRs. This could lead to a fixed-exchange rate regime with a peg based not on gold but on SDRs.

All of these shifts are now underway. Whether they play out over years or mere months remains to be seen. Exact outcomes are uncertain. What is certain is that I will watch developments closely and keep you ahead of the power curve as the elites continue their push toward digital money, world money, and the end of cash.

- Source, James Rickards via the Daily Reckoning

James Rikcards: Towards a Single World Currency

Is the move toward central bank digital currencies real? And, if so, is it the first step toward a global reserve currency that will replace the dollar and euro as currencies of choice in reserve positions of major economies?

Well, yes and no.

Before I expand on that answer and explain the impact central bank digital currencies will have on the more familiar world of foreign exchange, it’s helpful to say a bit more about what central bank digital currencies (CBDCs) are.

CBDCs are not cryptocurrencies. The CBDCs are digital in form, are recorded on a ledger (maintained by a central bank or Finance Ministry), and the message traffic is encrypted. Still, the resemblance to cryptos ends there.

The CBDC ledgers do not use blockchain, and CBDCs definitely do not embrace the decentralized issuance model hailed by the crypto crowd. CBDCs will be highly centralized and tightly controlled by central banks.

CBDCs are not new currencies. They are the same currencies you already know (dollars, yuan, euros, yen, sterling) in a new form, using new payment channels. They are a technological advance, but they do not replace existing reserve currencies.

CBDCs are currently being introduced by major central banks around the world. Countries are at different stages of deployment. China is the furthest along. They have a working prototype of a digital yuan that will be showcased at the Beijing Winter Olympics in February 2022.

If you’re there and want to buy tickets, meals, souvenirs or pay for hotel rooms, you’ll be expected to pay with the new digital yuan using a mobile phone app or other digital payment channel.

The European Central Bank has also moved quickly on a CBDC version of the euro. They are not yet at the prototype stage, but they have made material advances and are getting close to that stage. Japan and the U.S. are at the back of the line.

The Fed has a research and development project underway with MIT to study how a digital dollar might intersect with or even replace the existing dollar payments system (which is already digitized, albeit without a centralized ledger).

The U.S. is probably several years away from its own CBDC at best.

So, yes, the move toward central bank digital currencies is real. How does this relate to what is sometimes called The Great Reset? This would be the movement toward a single global reserve currency.

This movement would be nominally led by the International Monetary Fund acting as a kind of world central bank. Still, the IMF cannot make decisions of this magnitude without U.S. approval. (The U.S. has just enough voting power in the IMF to veto any material decisions it does not like).

In turn, U.S. approval would require a global consensus among major economies including China, the UK, Germany, France, Italy, and other members of the G7 and G20.

This desire to create true world money would involve the creation of a digital special drawing right (SDR). SDRs are issued by the IMF to member nations and may be issued to other multilateral institutions such as the United Nations...

- Source, The Daily Reckoning, read the full article here

Jim Rickards: Nobody Has Solution For This!

The Future Of Money with Jim Rickards, Danielle DiMartino Booth, John Najarian & Russ Gray

Interested in protecting the purchasing power of your wealth from inflation, learning how the US dollar and other world currencies are likely to perform from here, the roles of gold silver & cryptocurrencies, or whether the Federal Reserve & other central banks are going to soon issue digital currencies (CBDCs)? 

Then watch this video. Recently, I had the pleasure of hosting a panel on The Future Of Money at the New Orleans Investment Conference. 

It had an absolute killer line-up: Jim Rickards, Danielle DiMartino Booth, Jon Najarian and Russell Gray. As expected, the level of financial expertise and sheer neural power that ensued was off-the-charts amazing. 

So I begged Brien Lundin and his team, the folks who produce the conference, to allow me to share a replay of the panel here with you on Wealthion. 

Both to benefit from it’s insights, as well as to see the extremely high caliber of idea-exchange that happens amongst the fantastic experts at this event. Maybe you’ll want to join me there next year.

- Source, Wealthion

Jim Rickards: Why Would You Own This...

Jim Rickards talks about the growing world debt levels, dwindling confidence levels in the system as a whole and spiraling out of control inflation levels.

Rickards breaks down how owning precious metals is one of the only safe plays that you can make moving forward. The ability to pivot once the system comes crashing down on the worlds head will be non existent. Those who act now, will be handsomely rewarded.

We live in a fiat world and it is only a matter of time before the masses see through the illusion that it is.

- Video Source

Jim Rickards: What Does Afghanistan Mean for Defense Stocks?

Jim Rickards: It's Not Over Yet, Something You Never Heard Before

James G. Rickards is an American lawyer, economist, investment banker, speaker, media commentator, and author on matters of finance and precious metals. He is the author of Currency Wars: The Making of the Next Global Crisis (2011) and six other books. He lives in New Hampshire, USA.

Jim Rickards: This is The Worst Crisis In 100 Years

Jim Rickards What Does Afghanistan Mean for Defence Stocks?

Within weeks of the botched withdrawal from Afghanistan, Australia has announced a new defence deal with the UK and US, and our intention to acquire nuclear submarines and Tomahawk missiles. 

And Australia isn’t alone. Japan’s Ground Self-Defense Force is doing its first nationwide war drills since the Cold War, and the European Commission is agitating for a defence force of its own so that it isn’t reliant on the US for protection. 

It seems Biden’s announcement that the US won’t be as active in dictating the world’s affairs has woken everyone up to the need to protect themselves. 

When it comes to untangling the messy withdrawal from Afghanistan, and the long-term implications, Jim Rickards is your man.

- Source, Fat Tail Investments

Jim Rickards on Connecting the Dots Part Two

Jim Rickards on Connecting the Dots, The Economy and Our Future Moving Forward

Usually, Jim’s issues take a deep dive on a range of topics that affect markets and your portfolio, economic growth, central bank policy, inflation, deflation, currencies, gold, stocks, bonds, demographics, geopolitics, and a lot more. 

But this month he did something different… He took two steps back, looking at all of these topics from a broader perspective. 

Instead of picking one and diving in, he took the major factors that drive markets and synthesized them into a big picture. 

It’s like when you go to the theatre to watch a play… A structural narrative forms the background and scenery that’s being performed by actors in the foreground. 

Most people focus on the actors. But it’s important not to forget about the scenery. That’s where the villains hide.

- Source, Fat Tail Investments

Jim Rickards: We're Heading For Another Great Depression

Jim Rickards: I Warned You But You Didn't Listen

In this recording, James Rickards had to address the elephant in the room: “Where is the stock market crash you predicted?”. 

The biggest economic disruptor in over 70 years the world has ever seen that will make central banks a laughing stock and how you can capitalize on this unique window of opportunity.

- Source

Jim Rickards : The Panic Has Begun America! US Dollar Collapse Could Be Next

When the Pandemic is over, a new Great Depression will begin!

Jim Rickards Take on the Gold Standard, How Much Are Things Worse Now?

Gold Standard vs Fiat Money, 50 Years Later: Are We Better Off?

August 15, 2021 marks the 50th anniversary of the end of the gold standard in the U.S. 

In 1971, President Richard Nixon formally unpegged the U.S. dollar from gold, meaning the greenback was no longer convertible into bullion.

Daniela Cambone speaks with best-selling author Jim Rickards about the U.S. economy post the gold standard to answer the most important question: are we better off?

- Source, Stansberry Research

Jim Rickards: On the Verge of the Most Destructive War Since WWII?

And there’s no shortage of threats in the world. Perhaps the most pressing right now is China’s aggressive posturing in East Asia. It’s not just China and the U.S.

The world’s three largest economies — the U.S., China and Japan — may be squaring off for the most destructive and costly war since the end of World War II.

The main protagonists will be China and the U.S. The cause of war will be a Chinese invasion of Taiwan, which may be coming much sooner than the world expects.

China would start the war with an invasion across the Taiwan Strait. The U.S. would be obliged to come to the defense of Taiwan and take measures to disable the Chinese fleet and its air support. But, Japan is no bystander.

A glimpse at a map shows that if Taiwan were in Communist China’s hands, Japan’s own sea lanes would be threatened, including its access to imported oil. Japan has its own island disputes with China. If China were to capture Taiwan, Japan’s islands in the East China Sea would likely be the next to fall.

The U.S. could fall back to a line of islands, including Guam, Hawaii and the Aleutians, but no fallback is possible for Japan. If China seizes Taiwan and the U.S. falls back, Japan would be under the thumb of China, and they know it.

Of course, a fallback by the U.S. would be an enormous blow to U.S. credibility, as well as its economic power. That’s why an alliance of the U.S. and Japan against China to defend Taiwan (along with Taiwan’s own formidable defense capability) is the most likely response to a Chinese amphibious assault.

“Wolf Warrior” Diplomacy

The question for the world is whether China will get the message and refrain from attacking Taiwan. Unfortunately, signs point in the opposite direction. China has left its non-threatening style of diplomacy in the past.

Today, China pursues “Wolf Warrior diplomacy,” named after a popular Chinese movie that features aggressive Navy SEAL-style tactics as practiced by Peoples’ Liberation Army commandos.

China has come out of its shell and seeks regional hegemony to be followed by global hegemony. It is aggressively pushing on its neighbors in India, Myanmar, and the six nations that surround the South China Sea. Taiwan is the prize, and China is preparing to seize it.

This attack will be Xi Jinping’s legacy and his attempt to rival the reputation of Mao Zedong. Will Team Biden be able to see it coming?

U.S. investors should not take Chinese restraint for granted. Allocations to cash, gold and U.S. Treasury notes will preserve wealth when the worst happens.

- Source, The Daily Reckoning via Jim Rickards

James Rickards: It’s NOT a Conspiracy

Philosophers and analysts use a principle called Occam’s Razor (sometimes Ockham’s Razor) to solve difficult problems. It says that when you are confronted with two possible solutions to a problem, one complicated and one simple, it’s usually better to select the simple solution.

There’s always some attraction to the complicated solution because humans like intrigue and plot twists. But statistically, the simple solution is more likely to be correct and therefore the one that analysts should prefer unless contrary evidence presents. This approach is useful in dealing with conspiracy theories.

Yes, real conspiracies exist (such as the plot to assassinate JFK), and analysts must be alert to the possibility. But most so-called conspiracies have much simpler explanations that are more likely to be correct.

One of the most potent drivers of coordinated political action is not a deep, dark conspiracy. It’s usually just the result of like-minded individuals cooperating to achieve the same goal.

It’s Groupthink, Not Conspiracy

If the political players all think alike and agree on goals, you don’t need a conspiracy. Just let them go to work every day and communicate with each other, and you’ll get the coordinated result without the inevitable twists and turns of a conspiracy.

That’s a good thing to bear in mind when considering the current administration. 23, top Biden administration officials all worked at the same consulting firm called WestExec Advisors. These officials include Press Secretary Jen Psaki, Secretary of State Tony Blinken and Director of National Intelligence Avril Haines.

For those who may be unfamiliar, “WestExec” is a reference to West Executive Avenue, a non-public road that runs between the West Wing of the White House and the Eisenhower Executive Office Building.

The West Wing is not that large and only has a few choice offices plus the Situation Room, the Roosevelt Room (for larger meetings) and the Cabinet Room, which is smaller. Most officials who say they “work in the White House” actually work in the Eisenhower Building, which means they walk across West Executive Avenue when they have meetings with top Biden officials.

The WestExec Advisors name is a play on that kind of insider status of the long list of former WestExec principals who are now running the country. (Don’t look to Biden as the source of power; he’s not mentally competent and does what the WestExec crowd or the rest of the Biden family tell him to do).

A Threat to National Security

So, with all of this power emerging from one firm, does that mean there’s a conspiracy among the alums to control the world?

Not really. But, it points to a bigger problem, which is the lack of cognitive diversity. The WestExec crowd all went to top schools, had top jobs in previous administrations, exhibit high IQs, and boast lots of credentials.

If you look at their resumes, you’ll see they all went to the same schools, had the same professors and pursued the same career paths. With few exceptions, it’s all Harvard, Yale and Columbia with a small dose of Stanford or Chicago for good measure.

They all went to law school or got PhDs and worked for the same small set of law firms or consulting firms. Then they all worked in a small set of government agencies, including the State Department, National Security Council or the Intelligence Community.

They all think alike. That’s an acute weakness because if they all look at things the same way, they will all miss the real dangers coming that don’t fit into their mental molds. Lack of cognitive diversity is a fatal weakness.

As a leader, you should always be willing to lower the average IQ if it means you can increase the range of viewpoints. At least someone might point out it’s raining to a group that’s too buried in briefing books to look out the window. This uniform mindset is itself a danger to national security. Sooner than later, a threat will arise that none of them will see coming.

- Source, James Rickards via the Daily Reckoning

Jim Rickards: Why Do the Most Heavily Vaccinated Countries Report the Most New Cases?

Again, the new outbreak is being blamed on the Delta variant, but this conclusion appears to be more of a name blame game than a solid scientific conclusion. If the Delta variant actually is the cause of an expanding outbreak, it raises doubts about the efficacy of the vaccines being used. (Unlike the U.S., there is no significant resistance to taking the vaccine, what is called “vaccine hesitancy” in Australia).

Dr. Robert Malone, a pioneer in the field of experimental mRNA vaccines, has produced evidence showing that the most-vaccinated countries in the world are experiencing a surge in COVID-19 cases, while the least-vaccinated countries aren’t.

“In Europe,” he said, “we are seeing surges at many places where most of the population has already been vaccinated. At the same time, the 15 least vaccinated countries don‘t seem to face any problem adding…

“Emirates [has the] highest vaccination rate in the whole world. They just experienced their second highest peak since [the] pandemic began.”

Don’t forget, again, these are experimental vaccines. They’re not vaccines in the traditional sense. These vaccines are more like genetic therapy.

There have been thousands of deaths and at least tens of thousands of sometimes serious side effects reported from these vaccines. You won’t just hear about it in the mainstream media. It seems like there’s a concerted effort to ban any suggestion that these vaccines could be in any way harmful for some people.

Greece is banning unvaccinated people from public spaces. In France, unvaccinated people face up to six months in jail for entering a bar or restaurant without a mask.

Here at home, Los Angeles County is rimposing indoor mask mandates, regardless of vaccination status. Former Secretary of Health and Human Services Kathleen Sebelius said Americans who refuse the vaccine shouldn’t be allowed to return to work and should face severe restrictions on their freedom of movement.

Whether or not you take the vaccine is your decision. It may prove beneficial for the majority of people. But you should at least be made aware that there are risks involved so you can make a fully informed decision.

Instead, they just keep saying everyone needs to be vaccinated, even kids, who are more likely to die from the vaccine than the virus.

Fauci and the Media Should Follow Their Own Advice

Let’s get back to lockdowns specifically. It’s not just Australia. You can look to South Africa, Europe and Japan. Japan has just banned spectators at the 2020 Tokyo Olympics (already delayed since last year). Now, there might be valuable tradeoffs between economic damage and virus control if these policies worked.

The problem is, the science shows they don’t work. Dr. Fauci and the media are always saying to “follow the science.” They should follow their own advice.

Masks are practically useless, partly because they are not worn properly; they’re made of inferior materials and the virus itself is much smaller than the weave on the mask fabric, which means the virus can easily pass through the mask. It’s like putting up a shark net to keep flies out. Masks are almost entirely symbolic.

Meanwhile, lockdowns don’t work, partly because they confine people to indoor spaces where contagion is much more likely to spread.

Lockdowns also don’t work because all that happens is that you infect people in a confined location (the lockdown zone), instead of another location (where you might otherwise travel), but you still infect people. By the way, there are virtually no documented cases of outdoor transmission. It all happens indoors.

The infected individuals might change, but there’s no net increase or decrease in the total number infected.

But if lockdowns work, why are we on our fifth wave of infections with 607,000 dead in the U.S. alone? Lockdowns do one thing and one thing only — they destroy economies. Yet politicians and bureaucrats continue to push them, despite the evidence.

The bottom line is, lockdowns could be returning to a theater near you. Investors should take note.

- Source, The Daily Reckoning

James Rickards: It’s Starting to Feel Like Last March

Today was the stock market’s worst day in months, as the Dow lost over 900 points midday. It ended up losing 725 after a late rally, but still a bad day. Fears about a global resurgence of COVID cases and its potential economic impact are being blamed.

Are we headed for another round of ineffective and economically destructive lockdowns? Let’s jump in…

The pandemic is like the proverbial bad penny — it keeps showing up. As recently as June, experts (who have turned out to be not-so-expert) claimed that the pandemic was finally under control.

This did not mean there were no new cases or fatalities. Of course, there were some. It meant that the case rate and fatalities rate had fallen so low that the disease was something we could just learn to live with but did not have to fear. Mask mandates and lockdown orders were things we could put behind us. Life was finally getting back to normal.

Return of the New Abnormal?

Now, all of that happy talk is in doubt. A distinct fifth wave of increasing cases and fatalities has emerged, both in the U.S. and globally. Here in the U.S., the daily caseload has increased from only 3,700 on July 4, to almost 52,000 new cases on July 16, a 1,300% increase.

The U.S. has been averaging almost 30,000 new cases a day over the last seven days (ending Friday), up from around 11,000 cases a day a month ago, according to the CDC.

Fatalities have not increased as dramatically so far, partly because of better treatments and partly because any fatality increase tends to lag the caseload increase. Still, an increase in fatalities is to be expected.

This increase is being blamed on the “Delta variant” of the virus. Notwithstanding a lack of clear understanding of the science behind the increasing caseload, politicians and incompetent public health officials are demanding the same failed policy responses as they did in prior waves.

Authorities in the U.S. and elsewhere are reintroducing lockdowns, quarantines and mask mandates. These useless policies are being implemented in Australia, especially in Sydney.

On July 14, 2021, the Premier of Australia’s New South Wales extended the lockdown of Sydney by at least 14 days.This new lockdown is the latest in a series of lockdowns that have affected Australia’s largest city and financial center.

The Sydney lockdown is currently set to expire on July 30, but the Premier said the lockdown will only be ended when the number of new cases is close to zero.

There’s no assurance that will happen anytime soon. In fact, based on reliable mathematical models of how new outbreaks spread, (so-called waves, which can be local, national or global), no material reduction in the new case load should be expected before the end of August.

- Source, James Rickards

Jim Rickards: Your $1,000 Deposit Is Only Worth $975

CBCDs use the same underlying distributed ledger technology that cryptocurrencies use. But unlike cryptos, CBCDs aren’t new currencies. They’ll still be dollars, euros, yen or yuan, just as they are today. But these currencies will only be digital; there won’t be any paper money or cash allowed. Only the format and payment channels will change.

Balances can be held in digital wallets or digital vaults without the use of traditional banks. A blockchain is not needed; the CBDC ledger can be maintained in encrypted form by the central bank itself without the need for bank accounts or money market funds.

In the future, customers will discover that paper money deposits will be accepted at a discount to face value when depositing to the new digital system. A deposit of $1,000 may be credited as $975.00 when put into the digital system, if it was after an arbitrary cut-off date, for example.

A system of such discounts (really taxes or penalties) was actually suggested by a prominent economist at a Fed symposium a few years ago. That economist was later nominated for a seat on the Fed board of governors.

As always, the new digital banking system will be promoted on the basis of convenience, ease of use and lower costs. Who needs bank accounts, checks, account statements, deposit slips, and the other clunky features of a banking relationship when you can go completely digital?

In reality, customers will discover that their digital assets are at risk for seizure or taxation not only for criminal reasons (that’s true today) but for political, medical or social reasons.

Could China’s Social Credit System Come to the U.S.?

Such a “social credit” system is being implemented in China. China already uses facial recognition software, mobile phone GPS tracking and the purchase of plane or train tickets to track their citizens. This surveillance can be used to detect anti-state activities and to arrest dissidents, or anyone who doesn’t strictly follow government orders.

Elements of China’s social credit system could end up being used here in the U.S. It might not be exactly the same, but it would nonetheless punish those who don’t comply with government decrees.

“Hmmm, the official record says you haven’t been vaccinated. That’s unfortunate. We’re sorry, but…”

An all-digital cash system could be used to impose fees on those who cannot prove they have received a COVID vaccine or some other medicine. This would amount to universal forced vaccination, although it would surely be imposed under some other more benign-sounding name.

If cash is no longer permitted, savers will be forced into buying land, gold, silver, or other tried-and-true ways of preserving wealth without exposing it to government pirates. The Chime account freezes are the shape of things to come.

Meanwhile, the big banks are also happy to kick you out of the banking system.

- Source, The Daily Reckoning via James Rickards

James Rickards: Do You Have This Smartphone App?

The stock market bounced back today after yesterday’s major losses. “Buy the dip” is alive and well.

But today, I want to revisit a topic I haven’t addressed much lately due to the pandemic, the inflation debate, and many other topics that have taken center stage.

I’m talking about the war on cash.

I’ve warned for a long time that governments are forcing citizens into digital forms of money so that they can more easily freeze accounts, seize assets and impose negative interest rates. As long as cash is an option, you can take your cash outside the system and avoid digital freezes.

Cash prevents central banks from imposing negative interest rates because if they did, people would withdraw their cash from the banking system.

If they stuff their cash in a mattress, they don’t earn anything on it; that’s true. But at least they’re not losing anything on it.

Once all money is digital, you won’t have the option of withdrawing your cash and avoiding negative rates. You will be trapped in a digital pen with no way out.

The movement toward a cash-free society is gathering momentum, but it’s not entirely here yet.

Access Denied!

That’s not stopping some financial institutions from taking your money anyway. For example, a banking app called Chime has been seizing customer accounts and not allowing them to log on or access their funds.

Chime has 12 million customers. So far, 970 customer complaints have been filed, of which 197 specifically mention “closed account” as the cause of the complaint. Many of the remaining 723 complaints involve closed accounts, although the regulatory records do not categorize them that way.

In some cases of individual retail customers, the amount frozen was $10,000 or more. The complaints are being resolved slowly and inconsistently. In the meantime, the customers’ funds are blocked.

The only surprise in this story is that these kinds of account blocks have not happened sooner or on a larger scale. Still, this is the tip of the spear; far more account freezes of this kind are coming.

Chime is a retail application used mainly on smartphones. But, central banks are working from the top down to create central bank digital currencies (CBDCs) that will enable bank regulators to do the same thing.

- Source, James Rickards

James Rickards: I Never Thought That This Day Would Come

Jim Rickards interview on economy, money printing, taxes, inflation and more. 

- Source, Success Attraction

Jim Rickards: Here's What You Should Do If The Next BIG DEPRESSION Comes

Jim Rickards: Central Banks Just Created a Gold Buying Opportunity

Jim Rickards sits down with Shae Russell to discuss inflation, interest rates, and why you need to have some gold in your investment portfolio. 

Jim Rickards is an American lawyer, economist, investment banker, speaker, media commentator, and New York Times bestselling author on matters of finance and precious metals. 

He was the principal negotiator of the rescue of Long-Term Capital Management by the US Federal Reserve in 1998. 

His clients include institutional investors and government directorates. 

He is the author of Currency Wars: The Making of the Next Global Crisis, The New Case for Gold and “The New Great Depression, Winners and Losers in Post-Pandemic World”.

- Source, ABC Bullion

Jim Rickards: The Shocking Truth About the Future of the Economy

Listen to Jim Rickard’s predictions about the economy and markets. 

The biggest economic disruptor in over 70 years the world has ever seen that will make central banks a laughing stock – and how to capitalize on this unique window of opportunity.

In this recording, James Rickards had to address the elephant in the room: “Where is the stock market crash you predicted?” 

His answer will shock you. 

Plus, you’ll discover what he had to say about cryptocurrencies… his comments will have you shaking in your boots…

- Source, Goko Group

Jim Rickards: A Collapse Is Coming

Jim Rickards ( sometimes referred to as James Rickards ) is a popular financial commentator, often known for his interesting contrarian point of view on current market and global economic conditions. 

Jim Rickards is an American lawyer, speaker, media commentator, and author on matters of finance and precious metals such as gold and silver. He is the author of Currency Wars: The Making of the Next Global Crisis (2011) and five other books.

This is How it Will Go: The New Great Depression Explained, with Jim Rickards

The end of the pandemic draws ever closer. Would you like to know what the“new normal” will look like? If you do, Jim Rickards is the man you should be listening to.

- Source, Southbank Investment Research

James Rickards: The Coming After Shock and the Dangers of Junk Science

But governments were not the only culprits in giving bad advice and implementing ruinous policies during the pandemic. Scientists were just as negligent. In fact, governments used “the science,” however flawed the science turned out to be, to justify their draconian policies.

Often, government and scientists worked hand-in-hand, with science offering flawed projections and governments taking the bad advice and using it to force destructive policies on the public.

There are many examples of this. Perhaps none are worse than the Imperial College-London (ICL) models.

Any model is only as good as the assumptions behind it. Real scientists know that no model is perfect. Good scientists continually update assumptions to compensate for output that deviates from observations.

The best scientists will discard a defective model and start over to produce a better one. These best practices are often ignored by scientists, who are more interested in attention, power or research grants.

That seems to have been the case with regard to the ICL pandemic models rolled out in the early stages of the pandemic and used by governments all over the world to guide policy.

The ICL chief epidemiological modeler, physicist Neil Ferguson, produced forecasts that said the U.S. would suffer 2.2 million deaths; the actual number is 581,056 as of today.

ICL’s model said the UK would suffer 500,000 deaths; that actual number is 127,609. ICL’s estimates for deaths in Taiwan were overstated by 1,798,000%.

Egregious overstatements also occurred with regard to Sweden, South Korea, and Japan. If that were the whole story, it would amount to nothing more than a discredited scientist and his institution. But, ICL’s badly flawed projections had momentous real-world consequences.

Governments around the world grabbed onto the ICL nightmare scenarios to impose lockdowns that had even more nightmarish consequences. This was a case of bad science leading to even worse public policy.

The evidence is clear today that lockdowns, masks and social distancing don’t do any good. Our own Centers for Disease Control (CDC) grossly overstated the risk of outdoor transmission of the virus.

The only policy recommendations that made sense were washing your hands and staying home if you had symptoms. There were no lockdowns during the Hong Kong flu of 1968 or the Asian flu of 1957.

Let’s hope we don’t suffer another pandemic of the kind we’ve just been through. If we do, let’s hope cooler heads prevail and don’t destroy the economy again for no good reason.

The Coming Aftershock

But despite the happy talk coming out of Washington and Wall Street, the full economic effect of lockdowns hasn’t hit yet.

In response to the pandemic, the Fed printed over $4 trillion of new base money. Congress approved $3 trillion of new deficit spending under President Trump and $1.9 trillion under President Biden, with another $4 trillion of deficit spending on the way later this year.

This massive monetary and fiscal response to the pandemic could be called the visible part of the bailout. There was also an invisible part.

The invisible bailout did not consist of direct handouts or checks; it consisted of forbearance and grace periods on loan and lease obligations. Student loan borrowers were told they did not have to pay interest on their loans. Tenants were told they did not have to pay rent. The rent moratorium was backed up by an eviction moratorium. If tenants did not pay rent, landlords were powerless to evict the tenants.

Meanwhile, the landlords had to keep paying mortgages and property taxes, which put 100% of the economic burden of the pandemic adjustment on the landlords’ shoulders. What was the statutory or legal authority for these orders?

Some were justified by explicit statutes, but many economic relief orders were issued by the CDC under a broad interpretation of its powers during a public health crisis. Now, litigation challenging these orders is making its way through the courts.

A judge in the U.S. District Court has just ruled that the CDC eviction moratorium is an illegal use of CDC’s public health powers. This is the first of many moratoria and grace periods that are set to expire.

The full economic impact of the pandemic has never been felt, partly because so much debt and rent were held in abeyance. As those back payments become due, a new way of defaults will ensue. But the media isn’t paying much attention to that.

The economic damage lockdowns have caused will not be undone in weeks or months. Much of the lost wealth is permanent. It will be inter-generational.

Growth will return, but it will be weak. Investors should go into the post-pandemic world with clear vision.

The government was wrong in the policy response, and they’re wrong again in their rosy scenario forecasts.

- Source, Jim Rickards

James Rickards: The Greatest Policy Blunder Ever

Since the outbreak of the pandemic, the “respectable” media has pushed the theory that the virus came from a wet market in Wuhan, China.

Any talk that it might have come from a bioweapons lab in Wuhan was dismissed as a conspiracy theory.

But the Bulletin of Atomic Scientists, not exactly a fringe organization, published a paper recently acknowledging the possibility that the virus escaped from a lab.

It didn’t say definitively that the virus escaped from a lab, but it maintained that it’s a legitimate possibility, not just some baseless conspiracy theory.

The origins of the virus are still being debated, but here’s what we do know:

The outbreak of the COVID-19 pandemic began in November 2019 in Wuhan, China. From there, it spread west to Milan, Italy and east to Seattle, Washington.

The virus mutated in Italy, then spread to New York, where it hit the tri-state area (NY, NJ, CT) viciously in March-April 2020. Eventually, it spread to the entire world with severe outbreaks in Melbourne, Madrid, London and Lima.

Over 3.2 million around the world have died from COVID. Even now, the virus is out of control in Brazil and India.

Although lower caseloads and much lower fatality rates are emerging in the U.S. and elsewhere, the pandemic is far from over.

The progress is due to both herd immunity from infected survivors with antibodies and the impact of experimental gene modification treatments from Moderna, Pfizer, Astra-Zeneca, and others.

The end is in sight, if not quite here. What have we learned?

Lockdowns Didn’t Work

Obviously, public health authorities around the world were completely unprepared for a health emergency of this magnitude. There were severe shortages of personal protective gear, masks, oxygen, testing kits and trained staff.

China was grossly negligent to the point of criminality in covering up the outbreak, not allowing foreign experts to research the outbreak or possible cures on-site, and blaming others for their negligence. Still, the list of government blunders doesn’t stop there.

The lockdown response used by the U.S. and other countries did no good medically and was immensely destructive from an economic perspective.

Scientific evidence that lockdowns don’t work to contain a virus was available in 2006. The anti-lockdown view was widely shared long before that.

Evidence from the 50 states in the U.S. (which had varied lockdown policies) and 30 countries around the world shows that there is no correlation between lockdown policies and virus spread. Orders for extreme, moderate, or no lockdowns all resulted in similar caseloads and fatalities.

Lockdowns had no material impact on the course of the disease.

But, lockdowns did destroy businesses and jobs. Large parts of the economy were simply destroyed and will never recover – they’re gone. Lockdowns also increased suicides, drug and alcohol abuse as well as domestic abuse.

The CDC, White House, state governors and other officials adopted lockdown policies without knowing if they worked (they don’t) and without considering the costs, which resulted in trillions of dollars of lost wealth and output.

- Source, The Daily Reckoning

Jim Rickards Drops Truth Bombs Behind LBMA Silver Inventory Mishap

Bestselling author Jim Rickards speaks with our Daniela Cambone about the recent stories surrounding silver inventories and the London Bullion Association. 

The LBMA overstated their silver holdings in April, an error which they later rectified. Rickards gives his thoughts on the matter and other theories circulating in the gold and silver market.

- Source, Stansberry Research

Inflation: The Biggest Financial Story Today

Economists had expected over one million jobs to be created in April. The actual number was 266,000, and March’s numbers were revised lower.

Do last month’s woeful unemployment numbers undercut the mainstream theory that falling unemployment will lead to inflation?

The biggest financial story today is fear of inflation. Inflation has spooked the bond market and raised expectations that the Fed will soon have to raise interest rates to fight inflation.

Any increase in rates will also hurt stocks because stocks and bonds compete for investor dollars. If yields on bonds go up, prices on stocks will go down.

Growth stocks, like many leading tech stocks, are especially vulnerable to inflation because much of their valuation comes from future earnings. As inflation rises, the present value of their futures earnings can fall dramatically.

There’s no doubt that inflation expectations have been rising. This is especially true after a spike in the reported CPI core and non-core data on May 12. This inflation spike roiled the bond markets.

From the low yield of 0.508% on August 4, 2020, the 10-year note yield peaked at 1.745% on March 31, 2021, and hit a recent peak of 1.704% on May 13 (intraday) on the CPI news before backing down a bit to the current level (1.640%).

The dollar price of gold moved down in lockstep as the yield on the 10-year note rose. Still, there’s less than meets the eye in the recent increase in rates.

“Transitory”

As recently as November 4, 2018, the yield on the 10-year note was 3.238%. On November 4, 2019, the yield was 1.942%. The fact is today’s “high yields” are actually quite low and are much lower than the two interim peaks of the past three years.

In fact, real inflation is as elusive as it’s been for over a decade.

The surge in CPI reported on May 12 was driven predominately by base effects and energy prices. The Fed isn’t right often, but in this case, I believe they got it right. Year-over-year price gains off the low 2020 base are to be expected.

April 2020 marked one of the steepest output declines in U.S. history. Consumer prices plunged. In April 2021, many of those prices recovered, especially in travel, airfares, hotels, restaurants and other services that were almost completely shut down in 2020.

They are also transitory because the 2020 output collapse was transitory. As we move into the third quarter of 2021, the new base will reflect the strong growth in Q3 2020. That’s a much steeper hill to climb for inflation metrics.

Inflation will come down sharply, and the ten-year note yield will come down with it. Gold will rally, and stocks will breathe a sigh of relief.

This does not mean all is well in the stock market. Bubble dynamics persist, although it’s impossible to know exactly when a bubble will burst.

But, at least in the short run, inflation fears are a false alarm. Inflation will arrive eventually, maybe in 2022 or later, but for now, the disinflationary dynamic is fully intact.

Don’t believe the hype.

- Source, James Rickards

Jim Rickards: Could the Fed Actually Be Right?

You can’t have it both ways, but that doesn’t mean you can’t try. That’s what Joe Biden is doing right now.

On the one hand, Biden policies are, at least, partly responsible for the recent rise in unemployment and might be largely responsible.

They’re also responsible for the inability of employers to hire employees so they can reopen their businesses and return to full capacity. If that sounds like a contradiction, it’s not.

The unemployment rate is rising, and job losses are still high. In addition to those actually counted as unemployed, there’s a huge group of Americans, perhaps ten million or more individuals, who don’t have jobs but are not technically counted as unemployed because they’re not looking for jobs.

There are always some people in this category who may be retired, homemakers, students or have other duties that keep them out of the workforce. But that does not account for the steep decline in labor force participation in recent years.

So, if unemployment is high and labor force participation is low, why are employers having difficulties finding employees?

Why Work When You Can Make More Sitting at Home?

There are literally millions of able-bodied Americans between the ages of 25-59 who are sitting around without jobs. Why won’t they take the jobs being offered?

The reason is that millions of Americans make more money on unemployment and other benefits than they could make working. Unemployment benefits have been increased and extended with a $300 per week supplement on top of regular benefits.

Other benefit programs come into play, including childcare tax credits, low-income tax credits, Obamacare credits, etc. It’s not difficult to make up to $40,000 per year with such benefit programs (and with very low tax liabilities).

Why work for McDonald’s or Walmart for $31,200 per year (that’s a full-time job at $15.00 per hour with benefits and training) when you can get $40,000 per year to stay home?

People can do the math, and they choose to stay home. And by the way, you can expect to pay more for a McDonald’s hamburger if they’re going to pay entry-level workers $15 per hour. They’ll try to pass along their increased labor costs to customers, as businesses generally do.

One way to solve this problem is to cut the benefits and programs. Then people would take up the job openings available, and the country would move closer to self-sustaining growth.

Instead, Biden is proposing more “rescue” benefits, continued high unemployment payouts and other goodies that gave rise to the labor shortage in the first place.

Biden’s plan will be a headwind to growth in the year ahead. But it’s music to the ears of the progressives, who are actually in charge behind the scenes, calling the shots.

- James Rickards via the Daily Reckoning

How Behavior Can Lead to Hyperinflation with Jim Rickards

The New Great Depression, with Jim Rickards

The end of the pandemic draws ever closer. Would you like to know what the“new normal” will look like? If you do, Jim Rickards is the man you should be listening to. And his book, The New Great Depression – Winners and Losers in a Post-Pandemic World, is the book to read. 

You’ll discover: 

• The origins of the pandemic and what they’ll mean for geopolitics and financial markets, just when the dust appears to settle 

• The shape of recoveries and what’s actually in them 

• The surprising recovery mechanism that governments won’t use, but you can...and more.

- Source, Southbank Investment

Jim Rickards: The Stock Market Will Crash, This is How to Prepare

Jim Rickards on How to Invest During the New Great Depression

Paul Buitink talks to best-selling author Jim Rickards about his new book 'The New Great Depression'. Jim explains the difference between recessions and depressions. He says the US could be considered in a depression since 2008 in terms of depressed growth.

- Source, Reinvent Money

Jim Rickards on Friedman's Hyperinflation Fallacy

Jim Rickards' on why printing money alone does not cause hyperinflation. It is however, a core piece that when joined with a change of behavior, will ignite this change.

- Source, Fat Tail Investment Research

Jim Rickards: Others Will Buy Bitcoin

While the Bros are having fun with their checks, the rest of us should not expect stronger economic growth for the foreseeable future.

The Bros may be using part of their stimulus checks to buy stocks, but others will likely be using it to buy Bitcoin…

It seems like only last week (because it was) that Bitcoin was priced at $50,000 per coin, but by Friday, the price had surged to $60,000, a 20% increase in just one day. The reason doesn’t matter; it is what it is.

The case against Bitcoin as an investable asset is long and compelling. It has no use case; there’s almost nothing you can buy with a Bitcoin, and it has no return other than higher prices based on an application of the greater fool theory.

A glance at the price chart shows it’s clearly a bubble, the worst in history, worse than NASDAQ in 2000 during the dot.com frenzy and worse than the Japanese stock market in 1989.

What Good Is It?

Bitcoin simply doesn’t have much practical use. It is also filling the atmosphere with CO2 because most of the “mining” (really high speed computer calculations requiring monumental amounts of electricity for processing and cooling) is done in China, where most power plants are coal-fired.

Now, CO2 is a harmless trace gas that plants need to grow, so I’m not complaining that Bitcoin mining is churning out more of it. But it does require tremendous amounts of electricity. What about Bitcoin as a possible reserve currency?

Bitcoin will never be a reserve currency because its capped issuance amount makes its price deflationary, which is unattractive to borrowers. Without a Bitcoin bond market, there can be no securities in which central banks can invest reserves.

Worse yet, the Bitcoin price is a Ponzi scheme driven by the issuance of the stable coin Tether, which has never accounted for the billions of dollars that have been taken from naive Tether investors. That said, none of this matters.

Bitcoin has become a belief system. The true believers see what they want, hear what they want and are immune to the arguments of the non-believers.

Golden Anchor

This points to the difference between the “content” of Bitcoin (the price history and types of features discussed above) and the “environment” created by Bitcoin (the unseen and not understood impact on thought and behavior from any new media technology).

Bitcoin will never displace the dollar, but it could destroy confidence in the dollar by its all-encompassing impact. This could cause social disorder and contribute to the decline of linear, rational civilization.

My solution to this conundrum is to hold physical gold. For the Bitcoin believers (and others), the solution is always… more Bitcoin.

The market is becoming unhinged. Gold can be your anchor. Don’t worry about the short-term fluctuations along the way.

Gold plays a long game; you should focus on the long-term…

- Source, Jim Rickards via the Daily Reckoning

Jim Rickards: The Bros Are Preparing Their Next Attack

Most investors have heard of the GameStop frenzy. GameStop is a brick-and-mortar retail outlet for video games, equipment and accessories.

It has long been considered a dying company by Wall Street because it does not have a strong online presence. It seemed to be headed in the same direction as Blockbuster after Netflix arrived with a streaming model for movie rentals to replace Blockbuster’s model of drive-to locations with physical VHS cassettes and DVDs.

GameStop was heavily shorted. Then along came the Bros!

The Bros (short for “brothers”) are mostly millennial, mostly male novice traders who used the RobinHood mobile phone app to trade stocks (using call options with leverage) the way people bet on the Super Bowl or basketball during March Madness.

GameStop went from $40 per share to over $400 per share in a matter of weeks, leaving hedge funds that had shorted GameStop with over $20 billion in losses. Of course, the GameStop pump-and-dump came crashing down, resulting in losses for the Bros also, but that’s just how bubbles go.

Here We Go Again?

What is not as well-known is that a lot of the money for the Bro’s trading came from the $1,200 COVID relief check the government handed out last spring and the $600 checks handed out at the end of December.

Many Bros were tech-savvy, unemployed and stuck-at-home, so using the government’s “free money” to have fun trading stocks was a great form of entertainment during the lockdowns. Now it’s happening again!

Young retail investors plan to use their new $1,400 government checks from the $1.9 trillion Biden bailout bill to engage in a new round of speculative trading.

For the Bros, this is more like gambling than investing. For more serious investors, there are some important implications. Once the checks are available (in about two weeks), investors should expect some enormous volatility and huge gains in whatever stocks the Bros select.

It’s impossible to know in advance what stocks will be pumped (they use a Reddit chatroom called r/wallstreetbets/ to exchange views), but you’ll know it once the frenzy starts. The other serious economic implication is that the Bros and Americans, in general, are not planning to spend their money on goods and services.

More Debt, Less Growth

The U.S. economy is about 70% dependent on consumption; savings and investment are essential, which can be beneficial in the long-run but do nothing to expand GDP in the short-run.

Biden has said that we need the massive spending package “to grow the economy.” But it will only slow the economy because the added debt causes Americans to save more and spend less in anticipation of higher taxes down the road.

The “stimulus” actually keeps people from looking for jobs because the handouts are often more than they could be making at work. Meanwhile, the higher taxes needed to pay for the handouts also slow the creation of jobs because businesses have less money to invest or hire workers.

The only sustainable way out of the COVID recession is real growth, which comes from getting people back to work and reinvesting corporate profits. It doesn’t come from the printing press or its electronic equivalent.

Whether Americans save the money, pay down debt or invest in stocks (even as speculation), they are not spending. That’s more evidence that the U.S. is in a liquidity trap, and the Biden bailout will not help economic growth.

- Source, James Rickards 

James Rickards: The Mainstream Scenario

Here’s the mainstream scenario: The U.S. and global economies are making a strong comeback from the pandemic. China is growing quickly, U.S. unemployment is dropping, the virus is fading and the lockdowns are ending. This would be a recipe for strong growth and higher interest rates by itself.

Now, Congress and the White House have passed a $1.9 trillion COVID relief bill, which has little to do with COVID and everything to do with spending for favored interests, including teachers, municipal workers, federal workers, and community organizers. It also provides money for programs such as the Kennedy Center, the National Endowment for the Arts, etc.

The market view is that this additional $1.9 trillion of spending, combined with the $6 trillion of deficit spending already approved for fiscal 2020 and fiscal 2021 and another $4 trillion deficit spending package expected later this year, is more than the COVID situation requires and more than the economy can absorb without inflation.

Therefore inflation expectations have risen sharply. And, along with inflation expectations, the yield-to-maturity on the benchmark 10-year U.S. Treasury note has spiked.

The yield on the 10-year has risen from 0.917% on January 4 to 1.316% on February 6 to 1.638% today. Those rate hikes might not sound like much, but it’s an earthquake in the note market.

If you compare the rate hikes to the decline in gold prices, there is a high degree of correlation. As rates go up, gold goes down. It’s that simple.

More deficit spending stokes the flames of inflation expectations, which leads to higher rates and lower gold prices. When those fundamental trends are combined with leverage, algo-trading, and momentum, it’s like throwing gasoline on an open flame.

Gold investors have been getting burned.

What’s flawed in this scenario? The short answer: everything.

Perspective

You can’t argue with the facts – rates are going up, and gold is going down. But, the assumptions behind these trends are flawed. That means the trends will inevitably reverse, probably sharply.

Again, perspective helps.

This is not our first interest rate spike. The 10-year note hit 3.96% on April 2, 2010. It then fell to 2.41% by October 2, 2010. It spiked again to 3.75% on February 8, 2011, before falling sharply to 1.49% on July 24, 2012.

It spiked again, hitting 3.22% on November 2, 2018, before plummeting to 0.56% on August 3, 2020, one of the greatest rallies in note prices ever.

There’s a pattern in this time series called “lower highs and lower lows.” The highs were 3.96%, 3.75% and 3.22%. The lows were 2.41%, 1.49%, and 0.56%.

The point is that the note market does back up from time-to-time. And when it does, it cannot hold the prior rate highs and eventually sinks to new rate lows.

If we apply that pattern to the current rise in rates, we should expect that the rate increase will top out well short of 2.5%, and a new low may follow as low as 0.25% or even zero. There’s no guarantee of this; it’s not deterministic. But, it would be consistent with the 10-year trend of lowering rates.

Still, there’s more going on. The economy is not nearly as strong as the headlines and Wall Street cheerleaders would have you believe.

- Source, The Daily Reckoning

Jim Rickards: M2 Skyrocketing As Fed Stops Weekly Data Showing Money Supply

Six-time best-selling author Jim Rickards speaks with our Daniela Cambone about the road to economic recovery. 

They cover various topics, including Rickards’ stance that deflation remains the greatest risk to the economy, despite reports of inflation. 

Rickards also talks about M2 skyrocketing and how it coincides with the discontinuation of the Federal Reserve’s money supply series, data that has been published weekly since 1970.

- Source, Stansberry Research

James Rickards: The Mainstream’s Got It Wrong

Gold has taken a hit this year, no doubt about it. Since peaking over $1,950 in early January, the price of gold has fallen to $1,725 today.

But not all is doom and gloom. Some perspective is needed. If we go back to the beginning of the current bull market on December 16, 2015 (when gold bottomed at $1,050 per ounce), gold is up over 60% even at today’s beaten-down price.

That bottom occurred on the exact day that the Fed started their “lift-off” in interest rates after seven years stuck at zero. I urged investors to buy gold then. Those who listened are still sitting on huge gains even after the latest drawdown.

Savvy investors know the dollar price of gold is volatile. They keep their eye on the long-term trends and long-term drivers of the gold price. Sophisticated investors don’t sweat the dips. They see the occasional drawdowns as a great entry point and buying opportunity. So do I.

Nothing New Here

We’ve been here before.

Gold fell 17% from August 5, 2016, to December 1, 2016. It fell 8.1% from September 8, 2017, to December 13, 2017. It fell 12.5% from March 6, 2020, to March 19, 2020, during the pandemic panic.

After every one of these falls, gold rallied back and maintained a trend line of higher highs, finally reaching the $2,000 per ounce threshold in August 2020.

The important questions for gold investors are: Is this just a dip or the start of a new bear market?

And, what’s been driving the dip; when can we expect a turnaround? We address both questions by looking at the mainstream scenario and explaining why it’s wrong and how the turnaround will emerge.

- Source, James Rickards via the Daily Reckoning

The Price of Gold Over the Last 10 Years and What That Means for You

Myths about investing in gold abound. However, people turn to gold for a variety of reasons, financial and otherwise. Attributes such as malleability, resistance to corrosion, and ability to conduct electricity attract many to the metal. However, limited supply and availability tend to bolster its appeal as a form of money.

The Federal Reserve can print more dollars, but no entity can “print” gold. Barrick Gold Corp., one of the largest gold producers in the world, spent $1,065 per ounce to mine gold in 2020. While this makes mining profitable at the current price, this takes a considerably larger effort than increasing the supply of paper or digital dollars.

As for how to invest in gold, financial author Jim Rickards recommends a 10% allocation, and many other advisors agree. This is likely due to poor long-term returns.

Investors should remember that gold does not pay interest. Moreover, it has underperformed stocks over time. Today’s price of $1,740 per ounce amounts to a gain of only 22% over 10 years. Over the same period, the S&P 500 has nearly tripled. Hence, investing in gold has generally not served investors well.

Gold Through History

Nonetheless, the reverence for gold goes back to the beginning of civilization. The ancient Egyptians smelted it as far back as 3600 B.C. and began using it for jewelry in 2600 B.C. Ancient civilizations in Persia, China and many other places revered and treasured this precious metal.

Use as money goes back as far as ancient Rome, but most societies treated it as money indirectly. In the 18th, 19th and much of the 20th century, powerful central banks such as the Bank of England established trust in their respective currencies by guaranteeing convertibility to a specified amount of gold per unit. The Federal Reserve maintained a value of $35 per ounce of gold from the 1930s until 1971.

Removing the gold/dollar peg sent gold as high as $850 per ounce in 1981 as inflation and interest rates reached double-digit levels. However, the Fed moved to counter inflation in the early 1980s. Eventually, gold settled in the $300-$400 per ounce range and stayed there for the remainder of the 20th century.

- Source, Go Banking Rates

James Rickards: War With North Korea is Inevitable, Only a Matter of Time

Throughout 2016 and 2017 the dollar has been weakening. The Euro has risen against the dollar, and this weaker dollar has translated into higher prices for gold.

Jim thinks a shooting war with North Korea could be a wake-up call for the markets. The markets did react somewhat to Kim Jung-un’s initial missile tests however these launches have become normalized. Jim is convinced the U.S. is on a path toward war and will have to attack before they miniaturize their nuclear warheads to missile size. Korea has achieved made advances faster than intelligence agencies suspected. Jim thinks the markets are overly complacent about it.

Yellen’s recent speeches indicate the Fed will not raise rates. The Fed uses a relatively simple model that targets 2% inflation. The Fed wants interest rates to be around 3.5% before the next recession because you can’t get out of a recession with rates this low. He discusses various pause factors that use in their forecast.

Gold stocks are much the same what differs is management. How do you sort the well-run companies from the frauds? Jim says do your homework or find a reliable source.

Jim provides an overview of meraglim.com a company he is working with that utilize four scientific principals and a supercomputer to analyze the market and make predictions about possible outcomes of future events.

- Source, Palisade Radio

James Rickards: Too Soon to Say if There's an Archegos Contagion

CNBC's Dom Chu talks about the potential ripple effect of the Archegos fallout with Jim Rickards, author of “The New Great Depression: Post-Pandemic Winners and Losers."

- Source, CNBC

James Rickards: We Are Yet to See the Big Correction

James Rickards: Use it or Lose it

I’ve said all along that you cannot put negative interest rates on consumers until you eliminate cash. Otherwise, savers would just withdraw cash from the banks and stuff it in mattresses to avoid the negative rates. Implicitly, the European Central Bank (ECB) seems to agree.

One of the ECB Board members says that negative rates (really confiscation) will be applied as a “penalty” against “hoarding” cash. In plain English, that means they will create digital money, force you to spend it, and if you don’t spend it, they will take it away as a “negative rate.”

Now all of the pieces of the global elite plan are converging.

The IMF SDR issuance will reliquify global central banks that cannot print dollars. Then CBDCs will be used to eliminate cash.

Once the cattle (that’s us) have been herded into the digital slaughterhouse, we will be told to “use it or lose it” when it comes to our own money. In other words, either we spend the money, or the government will take it away.

Of course, the spending can be channeled into politically correct causes by excluding unpopular vendors such as gun dealers or conservative social media platforms from the payment system. This represents total domination of human behavior through world money + digital currencies + confiscation.

This is not speculation anymore; it’s happening in front of our eyes. The Great Reset is coming fast. The future is here.

The only solution is to use a non-digital, non-bank store of wealth that cannot be traced or manipulated. Given the planned dollar devaluation, it’s one more reason to own physical gold and silver.

Get it while you still can...

- Source, James Rickards

James Rickards: The Day China Got a Seat at the Monetary Table

In July 2016, the IMF issued a paper calling for the creation of a private SDR bond market. These bonds are called “M-SDRs” (for market SDRs), in contrast to “O-SDRs” (for official SDRs).

In August 2016, the World Bank announced that it would issue SDR-denominated bonds to private purchasers. Industrial and Commercial Bank of China (ICBC), the largest bank in China, will be the lead underwriter on the deal.

In September 2016, the IMF included the Chinese yuan in the SDR basket, giving China a seat at the monetary table.

So, the framework has been created to expand the SDR’s scope.

The SDR can be issued in abundance to IMF members and used in the future for a select list of the most important transactions in the world, including balance-of-payments settlements, oil pricing and the financial accounts of the world’s largest corporations, such as Exxon Mobil, Toyota and Royal Dutch Shell.

Now, the IMF is planning to issue $500 billion of new SDRs, although some Democrat senators are lobbying for an issue of $2 trillion SDRs or more.

This would be almost ten times the amount of SDRs issued in 2009 and would go a long way to increasing SDR liquidity and advancing the globalist agenda of eventually having the SDR replace the U.S. dollar as the leading reserve asset.

This proposal closely follows the global elite game plan predicted in chapter 2 of my 2016 book, The Road to Ruin.

Over the next several years, we will see the issuance of SDRs to transnational organizations, such as the U.N. and World Bank, to be spent on climate change infrastructure and other elite pet projects outside the supervision of any democratically elected bodies. I call this the New Blueprint for Worldwide Inflation.

More Than Just SDRs

But there’s more to the Great Reset than the issuance of new SDRs. Here’s another breaking news story that validates the longstanding prediction of a coming reset in the global financial system.

In 1999, the euro replaced the individual currencies of Germany, France, Netherlands, Italy and other major economies in Europe. Today, the number of countries that have joined the euro is up to 19, and more countries are awaiting admission.

The euro is the second largest reserve currency asset after the U.S. dollar. The creation of the euro can be thought of as a stepping stone from national currencies to a single world currency.

Now, the euro (along with the Chinese yuan) is moving quickly to become a Central Bank Digital Currency (CBDC). A CBDC combines a traditional currency with the blockchain technology of a cryptocurrency.

It’s an important move in the direction of eliminating cash and forcing users into a 100% digital system using credit cards, debit cards, and smartphone apps.

Why are China and Europe so focused on eliminating cash?

- Source, James Rickards

James Rickards: The Great Reset is Upon Us

The Bretton Woods conference of 1944 set the global financial system that still prevails today. The period 1969-1971 can be regarded as the First Reset, which involved the creation of Special Drawing Rights (SDR, ticker:XDR), the devaluation of the dollar and the end of the gold standard.

For years, commentators (myself included) have discussed the next global monetary realignment, which is sometimes called The Big Reset or The Great Reset.

Now, it looks like the long-expected Great Reset is finally here.

Details vary depending on the source, but the basic idea is that the current global monetary system centered around the dollar is inherently unstable and needs to be reformed.

Part of the problem is due to a process called Triffin’s Dilemma, named after economist Robert Triffin. Triffin said that the issuer of a dominant reserve currency had to run trade deficits so that the rest of the world could have enough of the currency to buy goods from the issuer and expand world trade.

But, if you ran deficits long enough, you would eventually go broke. This was said about the dollar in the early 1960s.

In 1969, the International Monetary Fund (IMF) created the SDR, possibly to serve as a source of liquidity and alternative to the dollar.

In 1971, the dollar did devalue relative to gold and other major currencies. SDRs were issued by the IMF from 1970 to 1981. None were issued after 1981 until 2009 during the global financial crisis.

“Testing the Plumbing”

The 2009 issuance was a case of the IMF “testing the plumbing” of the system to make sure it worked properly. Because zero SDRs were issued from 1981–2009, the IMF wanted to rehearse the governance, computational, and legal processes for issuing SDRs.

The purpose was partly to alleviate liquidity concerns at the time, but it was also to make sure the system works, in case a large new issuance was needed on short notice. The 2009 experiment showed the system worked fine.

Since 2009, the IMF has proceeded in slow steps to create a platform for massive new issuances of SDRs and the creation of a deep liquid pool of SDR-denominated assets.

On January 7, 2011, the IMF issued a master plan for replacing the dollar with SDRs.

This included the creation of an SDR bond market, SDR dealers, and ancillary facilities such as repos, derivatives, settlement and clearance channels, and the entire apparatus of a liquid bond market.

A liquid bond market is critical. U.S. Treasury bonds are among the world’s most liquid securities, which makes the dollar a legitimate reserve currency.

The IMF study recommended that the SDR bond market replicate the infrastructure of the U.S. Treasury market, with hedging, financing, settlement and clearance mechanisms substantially similar to those used to support trading in Treasury securities today.

- Source, James Rickards via the Daily Reckoning