3 Min. Gold News – Jim Rickards – Gold – July 21, 2015

3 Minute Gold News

A Quick Read for Busy People

A synopsis of an interview with Jim RickardsNew York Times bestselling author of The Death of Money and Currency Wars, by Alix Steel and Joe Weisenthal from BloombergTV.

Jim is the Chief Global Strategist for West Shore Funds, former general counsel for Long Term Capital Management, and a consultant to the US Intelligence community and the Department of Defense.

Topics:

Gold
Inflation vs. Deflation

 

Rickards - Brisbane

Jim Rickards

Interview link

 

GOLD

Gold is down when priced in U.S. dollars but it hasn’t lost any a value. The U.S. dollar has gotten stronger when compared to gold.

If you look at iron, wheat and other commodities around the world they’re all down when priced in U.S. dollars. Other currencies, including Australia, Canada, and Brazil are all down.

We have a global King U.S. dollar. The problem is that a strong dollar is deflationary.

If you’re innovative and make money in dollars, and the dollar collapses, then your money goes away.

What’s the best way to preserve that wealth? You don’t want to be like the Greek people lining up at the ATMs. It happened in Greece, it happened in Cyprus and it could happen here.

 

INFLATION VS. DEFLATION

 

There are two forces at work.

You have deflationary forces which are demographic, technological, and debt de-leveraging.

Then you have inflationary forces which are policy, money printing and currency wars.

They are pushing against each other like tectonic plates and it’s going to snap.

It could go either way.

The longest period of sustained deflation in U.S. history was 1929 to 1933 and gold went up 75%. Gold’s link to the dollar was broken and President Roosevelt set the price at $20 per ounce, then to $35 per ounce, and then gold’s price went up 75%.

The President wanted inflation so people could afford to pay their debts.

What sent the gold price higher is that President Roosevelt broke the link between the dollar and gold. He laid in bed in his pajamas and told the Secretary of the Treasury to raise it twenty one cents an ounce, because he believed three times seven was a lucky number.

It wasn’t inflation — it was fiat by the government.

Roosevelt raised the price of gold because he wanted a higher price for iron, wheat and cotton and everything else. The government wanted inflation. They were desperate for it.

The government broke the link to the gold standard and wanted inflation so people could afford to pay back their debts.

We’re getting to that place. We have a deflationary world and no gold standard. How are we going to pay the debts?

When the government becomes sufficiently desperate for inflation there’s always one way to get it — raise the price of gold.

We might get to inflation the old fashioned way — loss of confidence and velocity.

Inflation is like a ham and cheese sandwich. Money growth is the ham and you need cheese which is velocity (how fast the money is moving and people are spending).  We don’t have velocity and velocity is psychological.

The other way to get inflation is just to revalue gold.

PRICE

At the end of the day Jim believes gold will be between $5,000 – $7,000 per ounce or higher. But it could go down to $950 before that.

As Jim Rogers said to Jim in a recent conversation, nothing has gone from $200 to $5,000 without a 50% retracement along the way. If you take gold’s peak of $1,900, then a 50% retracement is $950. It could go down to $950 and then back up.

 

Jim Rickards can be found on Twitter and at James Rickards Project.

 

 

 

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Elaine Ferry

 

New single – “Not Much of a Holiday” to be released this week.

 

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AlbumCover.PreparingfortheFall

 

Preparing for the Fall is available on iTunes — featuring Wag the Dog, Black Swan Dive,  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
© 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 intended as individual investment advice. We’re all watching which way the wind is blowing.

 

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