3 Min. Gold News – Jim Rickards – USAWatchDog Interview Aug18.2013

3 Minute Gold News

A Quick Read for Busy People

3 minute synopsis of a recent video interview with Jim Rickards, author of Currency Wars, senior managing director at Omnis.

Topics:

A New Currency Crisis Coming

Will The Federal Reserve Begin Tapering QE (Quantitative Easing)

Two Americas

Will There Be Gold Confiscation
……………………………………..

Jim Rickards

USAWatchDog Interview
August 18, 2013

We’re closer to the next global crisis.

The problem in 2008, among other things, was the two-big-to-fail banks.

Those banks are now bigger. They have a higher percentage of total assets in the banking system, and their derivative books are bigger.

Everything that was wrong in 2008 is worse today. So one should expect a liquidity crisis sooner rather than later.

Jim’s not saying next month or next year, but he believes certainly within the next five years he sees a collapse and liquidity crisis worse than 2008.

At the beginning of the last crisis the Fed’s balance sheet was 800 billion dollars. Today it’s 3.3 trillion dollars and increasing at a rate of a trillion dollars a year.

They printed 2 1/2 trillion dollars to paper over the last crisis.

What happens when the next liquidity crisis hits? They can’t print another 3 trillion. They can’t go to 6 trillion. Different people within the Fed have differing opinions, but Jim doubts they can go to 6 or 9 trillion.

The next crisis will be worse because the banking system is bigger now and the Fed is tapped out.

That’s what we’re looking at in the next few years.

Regarding Tapering

:Jim is not saying categorically that they will not taper quantitative easing (QE). They may or they may not. Jim’s view is that they will not taper because the economy is fundamentally weak.When people say there are green shoots for a recovery and unemployment is down, it’s because people are dropping out of the work force.

If they do taper then watch out. We’re in a borderline depression, with borderline inflation, so Jim’s view is that they will not taper.

If they do taper QE they will have to increase asset purchases by next March or April.

In other words, they’ll have to change course.

That is the history of QE.

They ended QE 1 then went back to it.

They ended QE 2 then went back to it.

They started QE 3 then they increased QE 3 after four months.

The flip flop strategy is what the Fed has been doing.

Regarding Two Americas

The rich are getting richer shown in the Genie coefficient that measures income and equality.

The United States is passing Mexico, who for decades was the quintessensial oligarcal society skewed in favour of the rich.

Empirically the U.S. has a worse skew in favour of the rich than Mexico with a worse Genie coefficient.

We’ve become kind of an oligarchy.

The shops on Fifth Avenue are doing fine and penthouses in New York are going for $90 million while the rest of the economy is stuck in the mud.

Regarding Gold Confiscation

Jim doesn’t think it’s particularly likely.

Last time, in 1933, there was more trust in government

From Watergate all the way up to the IRS scandals, people don’t trust the government now.

They might try to confiscate gold that’s in banks or put on a windfall tax.

Jim thinks the gold in private warehouses will be gone before the government tries to get it. The Comex is being depleted. GLD stocks are being depleted.

Jim doesn’t say categorically gold won’t be confiscated, he just doesn’t think it will happen because the government will find it’s very difficult to enforce.

……………………………………

Another Week on Wall Street

See the bankers wave the Wall Street wands
See the conjured piles of paper green
Now they’re betting all their tricks go wrong
They’re betting the world as you know it
If they win
You lose the whole world as you know it

Ever seen a long con?
Ever seen a tampered wand?
Ever seen the betters sipping tea?
Making bets just sipping tea
Well don’t talk back
Your betters
Your bankers are having a tee, hee, hee

Heyo heyo, just another week on Wall Street
Heyo heyo just another week on Wall Street

A little grease (Greece) is floating out to sea
Little PIGS (Portugal, Italy, Greece, Spain) are bobbing up and down
So send a storm and we’ll see
when the tide goes out who’s naked on the beach

Ever seen a long con?
Ever seen a tampered wand?
Ever seen the betters sipping tea?
Making bets just sipping tea
Well don’t talk back
Your betters
Your bankers are having a tea, hee, hee

Heyo heyo, just another week on Wall Street
Heyo heyo just another week on Wall Street

Who’s that wizard hiding behind that hedge?
Who’s that wizard hiding behind that hedge (fund)?

Ever seen a long con?
Ever seen a tampered wand?
Ever seen the betters sipping tea?
Making bets just sipping tea
Well don’t talk back
Your betters
Your bankers are having a tea, hee, hee

Heyo heyo, just another week on Wall Street
Heyo heyo just another week on Wall Street