3 Min. Gold News – Jim Rickards – October 29, 2015

3 Minute Gold News

A Quick Read for Busy People

A synopsis of an interview with Jim Rickards, New York Times bestselling author of The Death of Money and Currency Wars, by Lelde Smits at Modern Wall Street.

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

Topics:

Recession Inside a Depression
Fed Will Not Raise Rates in 2015
Next Move Will Be to Ease
Ways to Ease
Coming Next
Gold

Rickards - Brisbane

Jim Rickards

Interview Link

RECESSION INSIDE A DEPRESSION

We’re now in the second recession inside the new depression.

Some say a depression is when growth is declining around the world, but that’s not a depression. A depression is when growth is below trend.

The trend is 3.5 – 4% growth and we’re at 1 -2% growth right now — that’s depressed growth below trend.

We’ve been in a depression since 2007, and now we’re in a second technical recession within that depression.

The National Bureau of Economic Research, the US “referee”, usually calls a recession a year after it starts. So don’t wait for them to tell you it’s a recession; you can see it today.

THE FED WILL NOT RAISE RATES IN 2015

The Fed’s not going to raise interest rates in 2015. The Fed can’t raise rates because the economy is weakening.

You don’t raise rates in a recession.

The time to raise rates was in 2010 or 2011 when the economy had a little more strength. The Fed missed an entire cycle, but two wrongs don’t make a right.

The fact that they blundered then doesn’t mean they should blunder again now by raising rates.

Instead, they need to ease at this point.

FED NEXT MOVE WILL BE TO EASE

Looking at the data, a rough rule of thumb looks like their next move will be to ease in March 2016.

QE2 ended in June 2011 and QE3 started in September 2012 — that’s a 15 month gap.

If you take the end of QE3 which was November 2014, and come forward 15 months, then you come out around March 2016. It’s not like clockwork, but the point is that the Fed doesn’t change quickly.

They’ll be the last to know we’re in a recession because their forecasting models are flawed and obsolete.

By March they’ll be ready to ease.

WAYS TO EASE

US interest rates are at zero but there are other ways to ease:

1. QE4.
2. Helicopter Money.
3. Entering the Currency Wars by creating a Cheaper Dollar.
4. Negative Interest Rates.
5. Forward Guidance by just talking to try to guide people’s behaviour going forward.

The Fed took away Forward Guidance in March 2015 by taking the word “patience” out of their statements. They could reintroduce it by finding another word for patience and putting it back into their statements.

COMING NEXT

Jim says to look for Forward Guidance and a Cheaper Dollar.

Repercussions? Look for a cheaper US dollar and a stronger euro next year.

That will put pressure on Australia, Canada, and other countries around the world to cheapen their currencies as well.

This isn’t what markets are expecting so they’ll be taken by surprise. The problem with Wall Street economists is that alot of them were trained at the same schools as the people in the Fed, so their obsolete models are the same.

GOLD

Gold is a form of money.

When the US dollar is getting weaker that means the US dollar price of gold is getting stronger, meaning it goes up when priced in dollars.

If you look at August 2011, it was the all time high for gold in terms of US dollars but it was also the all time low for the US dollar, according to the Fed’s broad weighted index, which shows the exchange value, or cross rate, of the dollar against other major currencies.

You can have yuan/dollars, or euro/dollars … or gold/dollars.

This means that if the dollar becomes weaker then the dollar price of gold goes back up.

Right now we have stronger dollar/weaker gold in dollars, and when the dollar becomes weaker then the price of gold in dollars will be stronger.

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

 

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From the Cariboo Gold Rush Trail

 

 

Gold is $1,147.10 US per ounce.

Screen Shot 2015-10-29 at 12.21.22 PM

 

 

 

 

 

Keep your eyes on the South China Sea, the issue of international waters and rights of passage, and the wording of media documents. A person who wants something owned by a group will claim to be peaceful at the same time as they claim to own the thing. They will then act affronted when other owners don’t agree. By saying they are peaceful first they can try to make it look like someone defending the group’s thing is the aggressor.

Another place to look is in cold fusion, where the US patent by Italian cold fusion researcher Andrea Rossi has been formally approved. New energy technology is a planet changer, and free energy will change the power balance. Such a large change will be like going from the horse to the engine — it’s not just a faster horse, it’s a different world. The way of thinking of space, distance and time changes. Who owns and who owes changes.

Also watch artificial intelligence. As machines are trained to think in order to make production more efficient, it changes what humans do as occupations and how they can become less self-sufficient. It makes smart phones a one-on-one persuasion tool for corporations and media makers.

It’s important for us to use our own critical thinking skills and do our own research.

We need to each pay attention and to write our own script for our own storylines, because others will happily write it for us and charge a fee all along the way.

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I will be performing live as part of the 19th Annual Vancouver Eastside Culture Crawl on November 19 – 22. More details to come.

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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

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 all the international waves. More dealing to come. More standing in line for those who owe. Who owes? 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 live boutique 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 the gold standard and sound money, and borrows to go to war, then 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 wisdom we need. The sayings that were copied are the truths, the gods, of our world. All the empires who followed the gods of the marketplace instead have fallen, and there’s terror and slaughter when the gods of the copybook headings return. The lyrics are by Rudyard Kipling. 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. Naked short selling is like betting that your neighbour’s house will burn down. But in this scenario it happens to burn down. If the bankers win then 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 and 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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