3 Min. Gold News – Jim Rickards – CNBC World – March 26, 2015

3 Minute Gold News

A Quick Read for Busy People

A 3 minute synopsis of an interview with Jim Rickards — Chief Global Strategist at West Shore Funds, and New York Times bestselling author of The Death of Money and Currency Wars — by Adam Bakhtiar and Oriel Morrison of CNBC World.

 

Topics:


Federal Reserve Potential Interest Rate Increase
Rickards Ratio – Gold, Cash, 10-Year Treasuries

 

 Rickards - Brisbane

Jim Rickards

Interview link

 

FED POTENTIAL INTEREST RATE INCREASE

Jim continues to think the Fed may not be able to raise interest rates this year.

The Fed’s decision is data dependent, and we’re going to see very weak 1st quarter growth in the United States.

The 1st quarter GDP data comes out right after the next Fed meeting, so they won’t really be able to digest it for the meeting in May. They’re going to get to the June meeting with the 1st quarter data very weak.

Jim’s view is that they definitely won’t raise rates before September, and maybe not this year at all.

But if the Fed does raise rates in September the problem will not be the first rate increase.

Right now there’s uncertainty about the first rate increase — June, September, maybe later — but once they do it they remove all uncertainty about that first increase and the question becomes what about the second increase? The third? The fourth?

If you look at the Fed Funds Futures curve it’s pretty steep. The market is saying the Fed will proceed to raise rates in 25 basis point increments, maybe raising it every meeting. The Fed Funds Future says the market’s got it up to 1.75 and almost 2% by late 2016.

What the Fed has been signaling, with Stan Fisher’s speech this week and what others have said, is not to be so sure. They’re signaling that they’ll raise it 25 basis points, but it could be a long time before the second rate increase.

Jim thinks that’s a little too subtle for the markets. He believes they’ll take the Fed’s Funds Future curve and bring it forward, believing they will continue to raise rates.

The impact on emerging markets will be devastating.

There are $9 trillion US in emerging markets corporate debt — not sovereign debt or local currency debt — just US dollar corporate debt.

A lot of that money was borrowed on the assumption that the US dollar would be a lot weaker than it is. A strong dollar makes it harder to repay.

It could be the beginnings of a major stress in emerging markets corporate debt, and that starts to look like the 1997 Asian financial crisis1998 Russian Financial Crisis.

The emerging market countries have built up their foreign reserves a lot since then but the debt is a lot higher also.

History teaches that when a panic starts no amount of reserves are enough.

RICKARDS RATIO

Jim recommends that people put their investable assets in physical gold, cash and 10-Year US Treasure Notes.

In a Q & A interview with 3 Minute Gold News on June 25, 2014, Jim recommended people who are new to building their wealth start by saving cash until they have $10,000, and then buy an ounce of physical gold.

 

Jim Rickards can be found on Twitter and at James Rickards Project. Jim’s newsletter can be found at Agora Financial.
Currency Wars and Death of Money can be purchased through Jim’s website shop at James Rickards Project.

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Today’s Gold News:

Gold is $1,205.10 US per ounce via Kitco

Screen Shot 2015-03-26 at 10.31.43 AM

 

 

 

 

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AlbumCover.PreparingfortheFall

 

Preparing for the Fall is a boutique live solo album available on iTunes — including the singles Wag the Dog, Black Swan Dive, Bitcoin Barbarians, Miss American Pie and Gods of the Copybook Headings.

 

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Wag the Dog (Drums of War and Backroom Banker Passes)
words and music Elaine Diane Taylor
© 2014 Intelligentsia Media Inc. All rights reserved.
SOCAN/ASCAP
from the album Preparing for the Fall available on iTunes

 

Coins and Crowns
words and music Elaine Diane Taylor
© 2012 Intelligentsia Media Inc. All rights reserved.
SOCAN/ASCAP
from the album Coins and Crowns available on iTunes

Single featured in Episode 1 of Mike Maloney’s documentary series Hidden Secrets of Money.

 


The Gods of the Copybook Headings
words by Rudyard Kipling and music by Elaine Diane Taylor
©2014 Intelligentsia Media Inc.
SOCAN/ASCAP
from the album Preparing for the Fall available on iTunes

 

 

Another Week on Wall Street (Naked Short Selling and Fiat Currency)
words and music Elaine Diane Taylor
© 2013 Intelligentsia Media Inc. All rights reserved.
SOCAN/ASCAP
from the album Coins and Crowns available on iTunes

 

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Nothing on this site is personal investment advice. We’re all watching how the wind is blowing.

 

 

 

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