3 Minute Gold News – Jim Rickards – April 26, 2016

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, Currency Wars, and the newly released bestseller The New Case for Gold by Francine Lacqua at Bloomberg.

Jim is the editor of Strategic Intelligence, 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 U.S. Department of Defense.

by: Elaine Diane Taylor

 

Topics:

Gold
Stocks
Shanghai Accord

 

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Jim Rickards

 

GOLD

Jim thinks of gold as a form of money and not as an investment.

As money it competes with other kinds of money — the dollar, euro, yen etc.. They’re like horses going around a racetrack.

Investors are losing confidence in central banks. That’s what’s been going on and been clearly revealed. Central bankers have told Jim that they don’t know what they’re doing and they sort of make it up as they go along;. They experiment.

President Evans of the Chicago Fed has said this and others have said it privately.

Ben Bernanke described that everything he’s done was an experiment — meaning you don’t know what the outcome is.

Gold does well in a world where investors lose confidence in central banks.

Right now there are tens of trillions of dollars of sovereign debt with negative yeilds to maturity.

Gold has zero yeild.

Zero is higher than a negative so gold is the high yeild asset in this environment.

STOCKS

Both gold and stocks are going up, and the reason stocks are going up is because Janet Yellen is going “full dove”. There’s nothing the stock market doesn’t like about free money. Plus negative interest rates might be on the table for next year.

That’s bullish for stocks but it’s also bullish for gold.

Sometimes gold and stocks go up together and sometimes they don’t. There’s no long term corollation, but right now in a world of easy money and negative yeilds it’s good for both stocks and gold.

The technical level for gold is $10,000 U.S. per ounce. That amount gets bigger over time because it’s a ratio of physical gold to printed money. The amount of physical gold doesn’t go up very much, but printed money goes up a lot, so the dollar target goes up more over time because of all the money printing.

$10,000 U.S. per ounce is the implied non-deflationary price for gold. If you have to go back to a gold standard, or anything like it to restore confidence, that is the number you must have to avoid deflation.

So $10,000 per ounce is mathematically derived and is not a guess.

If Janet Yellen begins to normalize then it would probably throw the U.S. into a recession. A 25 basis points hike in December threw the U.S. stock market into a 10% correction.

The U.S. is hanging by a thread. It looks like first quarter GDP is going to come in at well below 1% according to the Atlanta Fed Tracker.

What’s the difference between -1% and 1%? Technically not much. One may be a technical recession and one is not, but growth is extremely weak. You don’t raise interest rates in a recession. You’re supposed to ease in a recession.

International spill over as well as the U.S. economy being fundamentally weak is the reason to not raise rates.

The time to raise rates was 2011 and that’s long gone. But two wrongs don’t make a right.

SHANGHAI ACCORD

The Phillips Curve seems to have broken down — if it ever existed. The bigger play is what Jim calls the “Shanghai Accord” which came out of the G20 meeting in Shanghai, China in February 2016.

It’s like a secret Plaza Accord between the U.S. Fed, the Bank of England, the Peoples Bank of China, the European Central Bank and the Bank of Japan.

China needs ease.

But the last two times China eased, August 2015 and December/January 2016, the U.S. stock market fell out of bed.

So how do you ease China without destroying the U.S. stock market?

Answer?

Keep the dollar/yuan cross rate unchanged.

Then ease in the U.S. dollar so that China goes along for the ride.

At the same time tighten Japan and Europe, so you get a stronger yen and a stronger euro.

China is a larger trading partner for Japan and Europe than the U.S. is, so it’s a backdoor easing for China.

 

The New Case for Gold is available now at Amazon.

 

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

 

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The degree is done, and it was an interesting experience doing university backwards. I built a publishing and production house in Vancouver, Canada, then sold my half and went back to school. The world is different now, and the students’ viewpoints changed dramatically even over the five years I attended. The digital vs. analog upbringing together with the different parenting styles goes nicely with the Roman view of a seculum.

Everything goes through seasons. A society’s seasons just go a little slower than an individual’s. It’s all like 3D cycles moving around at the same time as they push out to conquer ground and return home for dinner. Like electromagnetic sine waves and pressure waves going on at the same time.

The more of the world I see the more I believe everything moves to the Rod and the Ring.

I’m off to the deserts of Nevada to see the world of gold in the desert first hand.

Last year was the rainforest of B.C. and this year is the desert. It’s a beautiful world, isn’t it?

Stay tuned for the 3 Minute Gold News coming in a new form. And music and beautiful things for our beautiful world.

Things are escalating.

Thank you for coming by.

And thank you again to Jim Rickards for the shout out in his new bestselling book, The New Case for Gold. Looking forward to another hike up the Grouse Grind in Vancouver in July.

 

Elaine Diane~

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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 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.

One thought on “3 Minute Gold News – Jim Rickards – April 26, 2016

  1. Pingback: 3 Minute Gold News – Jim Rickards – May 3, 2016 | Elaine Diane Taylor

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