- Jim Rickards:
Thursday, September 19, 2013
A Collapse of the Dollar Standard
“A return to a gold standard is a possibility, but I don’t see that in the immediate future, I think we have to have a collapse first. A collapse of the dollar standard, and the petro-dollar deal. Then it (the dollar) will have to be replaced with something, which will either be the SDR or gold. The dollar standard is definitely collapsing … the collapse is definitely coming”
Wednesday, September 18, 2013
Federal Reserve Policy Affecting Emerging Markets
Jim is just back from safari in Africa, and says that bankers are more dangerous than rhinos because rhinos can only charge one person at a time, where bankers can take out entire countries and populations.
The FED relationship to the BRIC and emerging markets is like a drunk driver who runs down pedestrians and then blames the pedestrians for being in the way. Jim was in South Africa to attend an investment conference where he met the top institutional investors in the country, some of the wealthiest individuals, and government officials, and said you find out what their opinion is on what the FED is doing to the entire world.
The FED officials, reserve bank governors, say they know what is going on in the emerging markets but that they do not care. The FED says that it’s their job to take care of the United States economy and the rest of the world is on its own.
Jim believes that when you are manipulating every market in the entire world then you cannot be so careless about it. They are like a drunk driver running everyone else off the road. A lot of these markets are not that big, relative even to Europe.
When the FED calls interest rates down to zero, everyone wants to do the carry trade. They borrow dollars, then buy the local currency, invest in foreign assets, make a spread, leverage it up, and make a lot of money.
Well, as soon as the FED hints that they are going to raise interest rates, so called tapering, then everyone unwinds the carry trade. So they are now just massively dumping assets in Indonesia, Malaysia, Singapore, South Africa and elsewhere, dumping the currencies.
South Africa has seen their currency go from 8 to the dollar to almost 11 to the dollar in a matter of weeks. This is incredibly disruptive and damaging to them. The FED just says, “It’s your problem. You’ve got central banks so set your own policy.”
The FED relationship to the BRIC and emerging markets is like a drunk driver who runs down pedestrians and then blames the pedestrians for being in the way. Jim was in South Africa to attend an investment conference where he met the top institutional investors in the country, some of the wealthiest individuals, and government officials, and said you find out what their opinion is on what the FED is doing to the entire world.
The FED officials, reserve bank governors, say they know what is going on in the emerging markets but that they do not care. The FED says that it’s their job to take care of the United States economy and the rest of the world is on its own.
Jim believes that when you are manipulating every market in the entire world then you cannot be so careless about it. They are like a drunk driver running everyone else off the road. A lot of these markets are not that big, relative even to Europe.
When the FED calls interest rates down to zero, everyone wants to do the carry trade. They borrow dollars, then buy the local currency, invest in foreign assets, make a spread, leverage it up, and make a lot of money.
Well, as soon as the FED hints that they are going to raise interest rates, so called tapering, then everyone unwinds the carry trade. So they are now just massively dumping assets in Indonesia, Malaysia, Singapore, South Africa and elsewhere, dumping the currencies.
South Africa has seen their currency go from 8 to the dollar to almost 11 to the dollar in a matter of weeks. This is incredibly disruptive and damaging to them. The FED just says, “It’s your problem. You’ve got central banks so set your own policy.”
- Source, Elaine Taylor discussing Jim Rickards:
Sunday, September 15, 2013
Gold is Money
James Turk and Jim Rickards discuss the ongoing currency wars. Rickards discusses gold, the economy and inflation.
- Source, Gold Money:
Friday, September 13, 2013
Russia Aggressively Buying Gold
Russia now, after an aggressive pattern of buying gold in recent years, has acquired 1/8th of the gold of the U.S. Russia has 1/8th the economy of the U.S., too, so in terms of the gold-to-GDP ratio they have attained parity. They've been very transparent about their buying, in contrast to the Chinese. Putin has also, not coincidentally, been very clear that he doesn't want the U.S. dollar to continue to hold a central position in world markets.
- Source, James Rickards via Alpha Hunter:
Wednesday, September 11, 2013
Fed to Emerging Markets, Drop Dead
- Source, Bloomberg:
http://www.bloomberg.com/video/fed-to-emerging-markets-drop-dead-rickards-t_quMyzISCO5m23BP2iuuw.html
Friday, August 30, 2013
They May Have to Go to a Gold Standard
People are going to have to pay attention to that. And either the Chinese are dopes, which they’re not, or people will start to get gold, which they will.
But if there’s a run on paper currencies (which is entirely possible) and there’s borderline hyperinflation (which is entirely possible), they may have to go to a gold standard… Not because they want to, but because they find it necessary to calm the markets.
But if there’s a run on paper currencies (which is entirely possible) and there’s borderline hyperinflation (which is entirely possible), they may have to go to a gold standard… Not because they want to, but because they find it necessary to calm the markets.
- Jim Rickards via Wall Street Pit:
Wednesday, August 28, 2013
Are the Chinese Stupid? NO!
Central banks don’t want to go to a gold standard. But if gold is a barbarous relic, if gold has no role in the monetary system, if gold is a “stupid” investment, then why do the Chinese have 5,000 tonnes? Are they stupid?
If some scenarios play out, you are going to see the price of gold go up… a lot. And it may go up a lot in a very short period of time. It’s not going to go up 10% per year for seven years and the price doubles. It’s going to chug along sideways, maybe in an upward trend, with a lot of volatility. It will have a kind of a slow grind upward… and then a spike… and then another spike… and then a super-spike. The whole thing could happen in a matter of 90 days, six months at the most.
If some scenarios play out, you are going to see the price of gold go up… a lot. And it may go up a lot in a very short period of time. It’s not going to go up 10% per year for seven years and the price doubles. It’s going to chug along sideways, maybe in an upward trend, with a lot of volatility. It will have a kind of a slow grind upward… and then a spike… and then another spike… and then a super-spike. The whole thing could happen in a matter of 90 days, six months at the most.
- Source, Jim Rickards via Wall Street Pit:
Monday, August 26, 2013
The Economy is Fundamentally Weak
“The last time, in 2008 when the crisis started, the Fed’s balance sheet was $800 billion. Today, the Fed’s balance sheet is $3.3 trillion and increasing at $1 trillion a year.” Rickards contends, “You’re going to have a banking crisis worse than the last one because the banking system is bigger without the resources because the Fed is tapped out.” As far as the Fed ending the money printing, Rickards predicts, “My view is they won’t.
The economy is fundamentally weak. We have 50 million on food stamps, 24 million unemployed and 11 million on disability, and all these numbers are going up.” When the subject of gold confiscation came up, Rickards said, “I just don’t think it will happen because the government will find it will be very hard to enforce.”
- James Rickards via a recent USA Watchdog interview, see the full interview here:
Saturday, August 24, 2013
Everything is Worse
“The problem in 2008 was too-big-to-fail banks. Well, those banks are now bigger. Their derivative books are bigger. In other words, everything that was wrong in 2008 is worse today.”
- Jim Rickards via a recent USA Watchdog interview:
Thursday, August 22, 2013
FED Money Printing Won't Stop
- Source, USA Watchdog:
Tuesday, August 20, 2013
Now is a Great Time to Buy Gold
Rickards also said that now a great time to buy gold. He recommends investors put 10 to 20 percent of their portfolio in gold.
"Gold is going down. The dollar is getting stronger, which is the opposite of what the Fed wants," he told CNBC. "The Fed wants a weaker dollar, negative real rates ... and more inflation. And that's good for gold."
Federal Reserve Chairman Ben Bernanke rattled markets by announcing that the Fed might start winding down its stimulus later this year and end it completely in mid-2014 if the economy improves as it expects. Markets settled down last week after Bernanke said a highly accommodated monetary policy will be needed for an extended time.
Most Fed members want to start trimming the bond purchases in September, but tapering that month is "not a done deal," Eric Green, global head of rates and foreign-exchange research at TD Securities, told Bloomberg. "Most of them want to see more evidence the job market is improving. The only way for the job market to improve is if growth shifts higher from the pace of the first half."
"Many members indicated that further improvement in the outlook for the labor market would be required before it would be appropriate to slow the pace of asset purchases,” according to FOMC minutes from the June meeting.
"Gold is going down. The dollar is getting stronger, which is the opposite of what the Fed wants," he told CNBC. "The Fed wants a weaker dollar, negative real rates ... and more inflation. And that's good for gold."
Federal Reserve Chairman Ben Bernanke rattled markets by announcing that the Fed might start winding down its stimulus later this year and end it completely in mid-2014 if the economy improves as it expects. Markets settled down last week after Bernanke said a highly accommodated monetary policy will be needed for an extended time.
Most Fed members want to start trimming the bond purchases in September, but tapering that month is "not a done deal," Eric Green, global head of rates and foreign-exchange research at TD Securities, told Bloomberg. "Most of them want to see more evidence the job market is improving. The only way for the job market to improve is if growth shifts higher from the pace of the first half."
"Many members indicated that further improvement in the outlook for the labor market would be required before it would be appropriate to slow the pace of asset purchases,” according to FOMC minutes from the June meeting.
- Source, Money News:
Sunday, August 18, 2013
Gold's Short Term Outlook
The long term outlook for gold remains positive. Shorter term, however, increased volatility is likely. Both higher and lower prices are in the cards. It all depends on policy makers, in particular the US Fed. Between August and September there are two FOMC meetings with a press conference: September and December. Suppose the Fed would “taper” their bond purchases they will not announce it in December because it will be right before the new Chairman will take over. September is the most likely month to announce it.
So the September FOMC meeting will be an important one. Basically there are two possible outcomes. Tightening monetary policy is the first one. Doing so in a weak economy will have deflationary consequences. It will lead to higher interest rates and lower precious metals prices. Accommodative monetary policy, by contrast, would be bullish for gold and will lead to higher prices going to the end of the year.
So the September FOMC meeting will be an important one. Basically there are two possible outcomes. Tightening monetary policy is the first one. Doing so in a weak economy will have deflationary consequences. It will lead to higher interest rates and lower precious metals prices. Accommodative monetary policy, by contrast, would be bullish for gold and will lead to higher prices going to the end of the year.
- Source, Gold Silver Worlds:
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