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
PART 2 of 2
Topics:
Emerging Markets
China
Jim Rickards
EMERGING MARKETS
We need to be extremely cautious with emerging markets because of the flows of hot money.
Going all the way back to 2011, when you have a weak U.S. dollar and easy money from the Fed then the risk is gone and the carry trade is on.
During the forward guidance period the Fed was saying to investors, “We have your back. We’re not going to raise interest rates, so borrow U.S. dollars (which is a way to be short the dollar), and buy South African rand , Malaysian ringgit and Indonesian rupiah. Buy all the emerging market countries.”
Then the Fed did all this taper talk.
They taper QE and remove forward guidance. So investors think, “Okay, sell the emerging markets, bring all the U.S. dollars back and pay off my dollar borrowings; close off my dollar shorts.”
So, now the Fed is going dovish (low interest rates) again, and money is flowing back into emerging markets.
It’s in and out based on a reaction function to the Fed.
That’s extremely dangerous for investors.
Jim’s been to South Africa and Malaysia recently and they don’t know which way to turn. The emerging market countries aren’t doing anything — it’s the Fed fighting the currency wars.
Step back from the outflows of hot money and the risk-on risk-off issues and talk about fundamentals.
The fundamentals are weak, mainly because of China.
CHINA
China is slowing down. Their growth is always overstated because 45% of Chinese growth has been investment, and at least half of that investment was wasted.
Jim’s been to the ghost cities and looked at the Wealth Management Products. Even the head of the Bank of China said they were Ponzis.
It’s extremely unstable.
China’s economy is dialing down and it affects emerging markets.
The fundamentals are weak.
When emerging markets get an uptick in the currencies or stocks it’s just really a hot money inflow.
They’re extremely vulnerable to coming back out again.
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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Gold is $1,248.80 U.S. per ounce.
The Fed just had a meeting and announced they weren’t raising interest rates. Doves all over the place.
There’s a girl in love with a hawk and a dove,
and she keeps them both I know,
Off to the market in the dark,
she takes them both in tow.
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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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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Elaine Diane Taylor 