Some people in our community have wondered exactly whose side Jim Rickards is on. Many have recently argued he is nothing more than a mouthpiece for the globalists. Perhaps we should question anyone who is purporting that an SDR currency could be the solution. That is the solution for the globalist thieves. Meet the new boss, same as the old boss. Mr. Rickards was interviewed by Greg Hunter recently. The below are comments from our friend Jim Willie, whom we believe to be one of the best sources of information that doesn’t work for the parasitic cartel of banking thieves. Jim Willie’s work can be found at GoldenJackass.com
First we give you the interview with commentary and Dr. Willie’s rebuttals below
Jackass review with critique interspersed
The Chinese are hedging against not only the USDollar risk inherent to their vast reserves, but the entire global USD-based financial structure.
◄$$$ RICKARDS ON HUNTER WATCHDOG SHOW SPOUTED ABOUT MANY TOPICS… HE DOES NOT EXPECT CHINA TO BE IN POSITION FOR YUAN TO ACT AS RESERVE CURRENCY… HE EXPECTS THE INTL MONETARY FUND TO BAIL OUT THE CENTRAL BANKS WITH OVER $4 TRILLION IN SDR BASKETS OFF THE PRINTING PRESS… RICKARDS DOES NOT FORESEE THE CHINESE LAYING THE GROUNDWORK FOR A RETURN TO THE GOLD STANDARD (WITH YUAN IN PRIMARY ROLE), AS HE ONLY SEES A USDOLLAR HEDGE. $$$
Jim Rickards is an interesting figure, author of a new book entitled “Death of Money” that has been well received. He is a culpable system wonk and serves a purpose while appearing as a maverick and friend of gold. The following are his thoughts put to prose, with my rebuttals in bold parentheses. The Islamic State, the emerging caliphate, is not a new concept, but rather an old fixture for centuries, now awakened. The USGovt has been caught off guard (nonsense, the USGovt actively revived it for their destabilization purposes after exiting Iraq, to use the wild card). Their guerrillas have captured equipment, and been supplied possibly by diverted Saudi arms. A risk of spectacular terror attack exists, including a risk from disruption of oil transport. The United States depends little on Gulf oil supply, but China and Europe depend heavily on the Gulf region for their oil, suddenly at risk. The crude oil market has 3 main factors currently working to provoke a price decline. 1) supply & demand equation slowing down, 2) geopolitical wild card not seen yet, 3) monetary policy giving us deflation. Rickards dislikes the black swan metaphor, and prefers the snowflake and avalanche, which signifies the accumulated risk. The Ebola virus presents a pandemic risk, but still is just a snowflake. It could grow to become a pile of snow, or to become an avalanche.
The financial markets can be taken down by unforeseen events. However, the many blunders to date are built into the system, already recognized, having happened, and factored in. Rickards cannot anticipate the timing of calamity, but the magnitude of the collapse can be foreseen. Rickards accuses Russia as having responded asymmetrically with cyber warfare, an example at Nasdaq in 2010. (But Russian virus traces could easily have been planted by Langley software experts. Langley has been improperly painting Iran and China for many years, to take blame for Langley’s own extensive work in cyber attacks.) People must realize that securities and assets are not money. People do not know what money is, which is cash or precious metals. If restrictions or market shutdowns occur, then they learn fast what is money and what are stuck assets. Rickards suggests to have 10% in gold & silver, as one asset class. Gold is not digitalized, has no counter-party, has no limitations like cash limits on withdrawal.
Notice all the Too Big To Fail banks have even greater concentration of assets than in 2008. It is therefore easier to lock down the few big banks if the goal is to limit withdrawals and access. The non-directional volatility in stock market is evident, big up and down moves on successive days. Rickards is certain of no rate hike by the USFed, as he is more afraid of deflation taking fast root. (Total agreement on ZIRP Forever.) Notice how Buffet bought several hard assets and sits on record level of cash (20%). A calamity is coming as certainty, but when it hits, it will be exponentially larger than any collapse in past. A progression is crystal clear. The 1998 LTCM failure was big, the 2008 Wall Street failure bigger, maybe in 2016-2018 the USFed will be in trouble with other major central banks for the biggest calamity. (USFed has been in deep trouble, near catastrophic trouble since the start of QE bond purchases.) Each crash is bigger, and each bailout bigger than the previous. The central banks are set to fail, but some entity must be ready and have huge potential to bail out the central banks.
The Intl Monetary Fund is big enough to bail out central banks, so Rickards believes. (The Jackass believes such a notion is preposterous and delusional, since the IMF is a hollowed out defunct pillar.) The IMF could produce $4 to $5 trillion in SDR basket units in a short period of time. Its offices contain a trading desk. (Huh? The IMF operates on member pledges, and currently is broke. If various high weight nations pledge $trillions, the entire FOREX currency system would quickly collapse, and might force a sudden double or triple in the Gold price, leading to sudden implosion.) All roads lead to hyper-inflation, the clear signal. The USDollar is going to fall versus the SDR basket of currencies, Rickards expects. (Such a notion is again errant, since the USD is the biggest component to the SDR. So the USD cannot fall versus itself in dominant team basket.) The IMF could conduct a rescue based upon a hyper-inflation exercise since it is a faceless edifice that can man the printing press, with offices on 19th Street in Washington DC. (The IMF will be converted into a Chinese tool for its purposes, likely to grease the ramp for a BRICS gold currency launch.)
China is buying insurance in the form of Gold against USD risk. To be sure, China is buying 1000s of tons of gold. (Finally somebody speaks up about staggering gold accumulation in reserves held by China.) China sees something most people do not in systemic risk. C is not even close to being ready to have a reserve currency in the Yuan. C is making great strides in building a trade currency. But C does not have adequate assets to sit as reserve assets in the global banking system, namely in dozens of major nations. (Notice debt securities are referred to as assets, rather than a credit portfolio.) The only vehicle big enough and liquid enough in its market is the USTreasury market. To win reserve status, the Chinese Yuan would need a much bigger sovereign bond market, with issues in all maturities short and long, bond dealers to distribute them, REPOs to handle the overnight activity, a diverse payment & settlement system, futures & options market to manage risk, in other words a full architecture like available in USTreasury Bonds. (Excellent description of requirements.) China needs 10 years and the establishment of the rule of law to develop such a system.
China wants to have the Yuan within the SDR basket, a back door entry as reserve currency. C does not want a full capital account, but rather to cozy up to the IMF and to jump on the SDR wagon. (China might keep the IMF propped for this purpose.) C has hedged the USD with Gold, but in no way will China launch a gold-backed currency. It is not ready. China has $3 trillion in USD-denominated assets in its reserves. C cannot dump their USTreasurys. (The BRICS will launch a gold-backed currency, and trump the entire Yuan concept of reserve currency. Gold will become the reserve banking currency instead.) Best for investors to be in position, prepared, ready for the calamity that comes. It could hit in 3 minutes or 3 years. See the USA Watchdog interview. The haughty fast speaking (used car salesman) Rickards makes a great error, a lack of foresight in follow through on his analysis. The Chinese are hedging against not only the USDollar risk inherent to their vast reserves, but the entire global USD-based financial structure. If that is their motive in accumulating large quantities of Gold, then it is natural to conclude that China is preparing for the next chapter in the evolution of the monetary system past the fiat paper platforms and central bank franchises. China is preparing for a return of the Gold Standard, begun in trade and evolving into the banking system, due to toxic USTreasurys and the urgent need for a valid bank core. The Chinese Yuan (aka RMB) will be at the center of the global gold system coming into view. This is a gigantic blind spot by Rickards, who is blinded by his enormous ego.