3 Minute Gold News – Jim Rickards – CNBC – June 9, 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 CNBC

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:

What’s Driving the Price of Gold?
When Will Gold Hit $10,000 Per Ounce?
Financial Implosion

 


Jim Rickards

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Interview Link

 

WHAT’S DRIVING THE PRICE OF GOLD?

The U.S. dollar is driving the gold price.

Think of gold in weight – so many ounces, kilos or tonnes.

A lot of people think of gold in terms of U.S. dollars, as in the dollar price of gold. If you think of it in dollars then the price of gold is just the inverse of the dollar.

If it’s a weak U.S. dollar then it’s a higher dollar price for gold, and if it’s a strong dollar then it’s a lower dollar price for gold.

If you want to know what gold is going to do in dollars, just ask yourself what’s going to happen to the dollar.

Jim believes the U.S. dollar is going to go a lot lower and so the dollar price of gold is going to go a lot higher.

The U.S. dollar going lower is the trend for the next six month to a year, which is what came out of the Shanghai meeting in February 2016.

The Fed has been tightening for three years. There’s a global dollar shortage. The Bank for International Settlements (BIS) came out with a very good study yesterday.

The Fed needs to ease up and there’s no way they’re going to raise interest rates for the rest of the year.

WHEN WILL GOLD HIT $10,000 PER OUNCE?

We had a global financial panic in 1998, where we were hours away from every market in the world closing.

Jim was the top lawyer for the hedge fund Long Term Capital Management, which had borrowed billions of dollars to make big bets on exotic securities. Jim negotiated the company’s bailout, when the Federal Reserve forced other Wall Street firms to bail out LTCM in a $3.6 billion deal.

Ten years later we had a global financial panic in 2008, where we were days away from a sequential failure of every bank in America. The Federal Reserve, the U.S. central bank, bailed out the banks.

If we come forward another ten years, say 2018, the central banks are not going to be big enough to bail out the next global financial crisis because they haven’t normalized their balance sheets.

The bailout money for the next financial crisis is going to come from the International Monetary Fund (IMF) because they have the only clean balance sheet left. They’ll use SDRs (Special Drawing Rights), which is world money.

This will happen because of a loss of confidence in the U.S. dollar.

Jim believes the dollar price of gold will rise to $10,000 per ounce.

The price of $10,000 per ounce comes from looking at global M1 money supply with a 40% gold backing. The official gold in the world is about 35,000 tonnes. Doing the math comes out to $10,000 per ounce if you back the M1 money supply 40% with gold.

The gold would be used to create confidence in the dollar.

IMPLOSION

The markets almost imploded twice in the last 18 years — 1998 and 2008. It happens.

The difference is that in 1998 Wall Street bailed out a hedge fund to avert collapse, and in 2008 a central bank bailed out Wall Street. In 2018 who is going to bail out the central banks?

Jim believes it’s going to be the IMF.

We’ve seen financial panics before.

In 1914 the New York Stock Exchange was closed for five months because everyone was selling stocks to buy gold

The events of a world war caused a financial panic. The Europeans sold stocks to get gold. Gold was being shipped by J.P. Morgan from New York to Europe. The Bank of England opened a branch office in Ottawa, Canada, so they could send gold by train because of submarine warfare. It was a total financial panic. Look at your history.

The financial panic in 1914 was caused by World War I. They said, “We can’t have the markets collapse because everyone is selling stocks to buy gold.” So they closed the New York Stock Exchange.

In March 1933, President Roosevelt closed every bank in America and confiscated all the gold.

Do you think world war is obsolete?

Look at the South China Sea, look at Libya, look at Iran.

The next financial panic might not be caused by a world world — it might be a natural disaster.

People buy gold in those times because they have in the past. Because it’s money. It’s not a commodity or an investment — it’s money.

But it will be the kind of money that people can have confidence in.

You say you can’t eat gold? You can’t eat a dollar bill either. Gold is a medium of exchange and a store of value.

Jim buys and holds gold to preserve wealth. He doesn’t want to see his wealth wiped out in another financial crisis, or see it have a 30% decline in the stock market, or to lose its value to inflation.

Gold preserves wealth.

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 $1,268.80 U.S. per ounce.

 

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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. Long lines for 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.

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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.

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