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A synopsis of an interview with Jim Rickards, New York Times bestselling author of The New Case for Gold, The Death of Money and Currency Wars, by Martin Soong of CNBC Asia.

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

by: Elaine Diane Taylor

Topics:

Federal Reserve
Interest Rates
U.S. Election

Jim Rickards

Interview Link

INTEREST RATES

There’s no way the Fed will raise interest rates in September or November.

The reason is political as well as economic.

The U.S. economy is coming to an extremely weak patch and is close to recession. There’s no way the Fed’s going to raise rates for that reason alone.

But, if they did raise rates, the one time they did raise rates last December, U.S. stocks fell 11% in six weeks. Raising rates now would cause a similar reaction, which would pretty much guarantee the election goes to Donald Trump.

Janet Yellen does not want her legacy to be the person who got Donald Trump elected. So she’s not going to touch rates before the election.

December is more interesting. If economic weakness continues then the Fed might actually cut rates — they can only do 25 basis points before going negative.

There have been eight major Central Banks that started on a rate raising path and had to turn around and cut rates.

Look at the Bank of England. They spent two years talking about how they were going to raise rates, and then after the Brexit vote they cut.

The European Central Bank raised rates about 2011 not long after a recession, trying to normalize, and they had to cut rates as well.

The U.S. looks like it will go in that path of trying to raise rates, failing, and then having to cut them.

There’s a 50/50 chance between a rate hike or a rate cut, but certainly not a hike this year.

The conundrum is that they want to raise rates but might not be able to. Last December they said they were going to do four 25 basis points hikes, and hike 300 basis points over three years.

The reason is that you need to cut rates about 300 – 400 basis points to get the U.S. out of a recession. So they’ve been trying to raise rates so that they can cut them in a recession.

The problem is that the economy is so weak that if they raise rates they might actually cause the recession.

The New Case for Gold is available at Amazon.

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

@mattricks99 Save. First in cash; then when you have more, put about 10% in gold or silver.

— Jim Rickards (@JamesGRickards) June 22, 2015

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Gold is $1,309.80 U.S. per ounce

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Wag the Dog (Drums of War and Backroom Banker Passes)

Beating, beating
I can hear drums
Bearing, beating
I can see there’s blood on the street
Marching fiat soldier feet
Waving flags
false
friends
hands
shaking
earth
harps
singing
God, God, God
There’s opium for masses
Mid-East oil and gas
and backroom banker passes
Tongues and tails (tales) wag the dog
when all else fails
And as they beg and borrow and steal
They want steel
So they’re beating, beating
I can hear their drums
beating, beating
Currencies and Empires
ring around
and all fall down

Beating, beating
I can hear drums
Bearing, beating
I can see there’s blood on the street
Marching angry peasant feet
Waving flags
false
friends
fists
shaking
earth’s
leaders
singing
Bomb, bomb, bomb
There’s opium for masses
Mid-East oil and gas
and backroom banker passes
Tongues and tails (tales) wag the dog
when all else fails
While they beg and borrow and steal
They want steel
So they’re beating, beating
I can hear their drums
beating, beating
Currencies and Empires
ring around
and all fall down

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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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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.

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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