3 Min. Gold News – Jim Rickards – Gold – September 2, 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 Maria Bartiromo at Mornings with Maria on Fox Business, with Dagen McDowell and Jack Otter.

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 US Department of Defense.

Topics:

Gold
Gold to $10,000 per Ounce
Gold is Insurance
Oil

Rickards - Brisbane

Jim Rickards

Interview Link

GOLD

When Jim talks about the death of money he’s talking about the loss of confidence in paper currencies.

This has happened multiple times in the last hundred years: in 1917, 1939 and 1971. In the late 70s the US even issued bonds in Swiss francs — called Carter bonds — because no one wanted dollars.

Jim definitely recommends buying gold as a place to hide and a place for safety while stocks are selling off.  Have 10% of your portfolio in gold as insurance. Just 10%, not half and not all in.

It’s like fire insurance on your house.

Nobody wants their house to burn down, but heaven forbid it does then you’re glad you have insurance. If you send a cheque to the insurance company every month and your house doesn’t burn down then it’s lost money, but you’re glad to do it because that’s your hedge.

Have a slice of gold, along with things like stocks and bonds, cash and other assets.

People say gold has no yield. But if you take a dollar bill out of your purse or wallet and look at it, it also has no yield.  If you want a yield you have to take a risk.

Your stocks, bonds and other income producing products have that income in dollars. If people lose confidence in dollars then your income goes away. That’s happened three times in the past hundred years.

In a systemic collapse all currencies go bust at the same time, and that has happened over five thousand years of history. (In currency wars, which we’re in now, the only logical conclusion is systemic reform or systemic collapse, and sometimes both.)

GOLD TO $10,000 PER OUNCE

Gold is up 400% since 1999 and up a couple of thousand percent since the 70s. But when people say it’s “up” they mean up compared to the US dollar.

If gold goes to $10,000 US per ounce, which Jim expects, then he thinks of it not as a rise in gold but as an 80% collapse in the US dollar — which has happened before.

The start of a rise up to $10,000 per ounce could start tomorrow and it could start in about three years from now. The point is that the U.S. has an unstable financial system and we don’t know when it’s going to collapse, but collapse is inevitable. That’s the easy thing — you can see it coming.

Having insurance and protection is a good decision and not “fear preaching”.

Do you want to be greedy for wealth in the short run or have protection for your wealth in the long run?

Jim has talked with people whose family have been around for 800 years, like the Colonna family in Rome, which have been around since the 13th century. When you asked them, “How do you preserve wealth through the 30 Years War, the Napoleonic Wars, Louis XIV, etc.?  They look at you and say “a third, a third, a third.”

They have one-third land, one-third fine art, and one-third gold. Plus a little cash aside for the yacht and helicopter.

The Colonna family built their wealth by being traders and crusaders, and they did a good job of preserving their wealth for 800 years with “a third, a third, a third.”

GOLD IS INSURANCE

Gold is different than other commodities — it’s a hedge.

Think of it as money. If you want some money have gold.

OIL

Jim believes crude oil will trade between $50 – $60 per barrel — with overshoots on either side.

Saudi Arabia controls the price of oil because they have the lowest costs and the largest reserves. They could raise the price by reducing the supply but they don’t want to do it.

Last year they asked themselves, “What price would put the frackers out of business but doesn’t hurt our fiscal situation.” The answer is $60.

It doesn’t mean they can stick to the landing, but that’s the number.

It will take another year to bankrupt the frackers so we should see the price between $50 – $60 until the end of 2016.

The BIS (Bank of International Settlements) has shown there are $5 trillion of junk debt in equities. Where did all this fracking come from? They had to raise money to drill it.

The glut of oil in the market from frackers right now is temporary because fracking has a short life. For the short term the frackers are pumping more to pay their bills, but in the long run most will go bankrupt.

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

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From the Cariboo Gold Rush Trail

Gold is $1,133 US per ounce again today after jumping up and down a bit.

A deer visited the herb garden in a storm. It made me think of my photographs of gold in the wild, so gold in the thyme made perfect sense.

I performed at a house event last night — Six Feet, Hallelujah, Not Much of a Holiday, Heart of Gold and a few others. There were people from all over the world. The interesting thing is that after singing about economics for a few years I can definitely see an interest rising in the lyrics now.

I’ve avoided singing my economic works in public, just on recordings. But people are noticing that changes are going on in full view, and they want to know what’s happening. They’re interested in more than songs about love — they’re feeling the world changing. We’re all feeling it. It’s the game of Coins and Crowns and we’re getting closer to the pendulum swinging back.

Today is guitar, gold and history research, yoga, weights, hiking and sitting at a deserted lake, and reading Gold and the Gold Standard by Edwin Walter Kemmerer. Plus, I’m now adding gold to this:

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When I melted my first gold in the flame yesterday I knew I was home again.

Fusing gold with glass is heaven.

I apprenticed as a goldsmith with a Canadian gold guru, Peter Spence, whose son, Doug Spence, founded the Canadian company Spence Diamonds. The metal was melted in a crucible and forced into a wax mold with a centrifugal swing, then I polished it to gleaming. I wear a small gold heart that I smithed back then. I’ve loved gold through my life and studied it in a monetary sense for fifteen years.

My three loves are music, publishing and gold. I’d probably add a love of the esoteric to the list. A chat about physics will do. I’ve now studied and worked with the first two, and had put a hold on the third for the right moment. It’s beautiful now to be creating art with music, fire, glass and gold.

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Not Much of a Holiday
words and music Elaine Diane Taylor
© 2015 Intelligentsia Media, Inc. All rights reserved.
SOCAN/ASCAP
Single available on iTunes

About the Greek bank holiday and long lines to get a few euros for the day. Debt deals behind closed doors. The media telling us what opinions to have. China building islands in the South China Sea and claiming the waves. More dealing to come. More standing in line for those who owe. Who’s next? There’s a long line of nations in debt and this is far from done.

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AlbumCover.PreparingfortheFall

Preparing for the Fall album is available on iTunes — featuring Wag the Dog, Black Swan Dive,  American Pie and Gods of the Copybook Headings.

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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.

When a nation leaves a gold standard or sound money and borrows to go to war hunger goes up, hope goes down, anger goes up, then it all goes down.


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

The copybooks of the early 1900s gave us all the words of wisdom we need. All the empires who followed the gods of the marketplace instead of the copybooks have fallen, and there’s terror and slaughter when the gods of the copybook headings return. The words are Rudyard Kipling’s. One of my gurus.

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

See the bankers wave their Wall Street wands and conjure piles of paper green. They’re making bets that the market will lose. Naked short selling is like betting that your neighbour’s house will burn down. And it happens to burn down. If they win we lose the whole world as we know it. I wrote this in 2009, with a lyric “A little grease (Greece) is floating out to sea and little pigs (Portugal, Italy, Greece and Spain) are bobbing up and down, they’ll send a storm then we’ll see, when the tide goes out who’s naked on the beach“, and it’s coming on now. The world is changing as we know it.

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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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