3 Minute Gold News – Jim Rickards – Trump – Stock Market Bubble Sept. 28, 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 New Case for Gold, The Death of Money and Currency Wars, by Ameera David at RT Boom Bust .

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:

Trump – Stock Market Bubble
Four US Candidates
Economy
Helicopter Money

 

Jim Rickards

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Interview Link

TRUMP – STOCK MARKET BUBBLE

Donald Trump is right. The stock market is in a bubble and the Fed is propping it up.

If you hold interest rates at zero for eight years you get bubbles because the money has to go somewhere.

The Fed printed $4 trillion and it hasn’t shown up in consumer inflation due to turnover and “velocity”.

But it has shown up in asset bubbles.

With zero interest rates almost any yield looks good. So you bid up the price of assets — stocks, bonds and other things — just to get a little bit of yield.

So we have a giant bubble and now the Fed is trapped.

If they raise interest rates even a little bit they’re going to pop these bubbles. But if they don’t raise interest rates then the bubbles are going to get worse.

They’ll pop eventually, either because they raise rates or else a financial panic like what’s going on with Deutche Bank, or else another cause. There could be a lot of causes that pop the bubble.

What matters is that the system is inherently unstable.

Trump is exactly right about that.

FOUR CANDIDATES

Jill Stein and Gary Johnson are in the Presidential race, and though they are both polling in single digits and won’t be the next President, they can make an impact on the outcome.

The US is about evenly divided so 3 – 4% can tip the balance one way or the other in some states.

With the debates, media should be doing a four-person poll and not a two-person poll, because it’s a four-person race. A two-person poll is bogus.

ECONOMY

This expansion has been a very weak one and it’s over seven years old.

The last four quarter reports show GDP growth at 1%. That’s pathetic. It’s not even the weak 2% since 2009 — it’s 1% for the last year.

So we’re closer to the next recession than not because of how long it’s been. The problem is the Fed usually has to cut interest rates 4% to get the economy out of a recession. That’s enough to give the economy a boost.

How are they going to cut interest rates 4% when they’re only at .25% right now?

They should have raised in 2010 and missed a cycles so now they have no ammunition.

Every major interest rate in the world looks like it’s headed to zero.

They’re trying to drive the economy with consumption. A better way to drive an economy is with investment. But who’s going to make an investment with so much uncertainty in policy?

Capital is on strike in effect.

HELICOPTER MONEY

What the ECB and other central banks are preparing for is “helicopter money”.

There are pictures of money being thrown out of helicopters and people scoop it up and spend it, and of course that’s not what the term means.

What it means is that you combine fiscal policy and monetary policy.

Fiscal policy = budget deficit. So helicopter money = you increase government spending, increase budget deficits, and you cover the deficit by borrowing money with government bonds (monetary policy). The central bank prints money and buys the bonds, and promises not to sell them. They hold the bonds indefinitely.

What all the central bankers are doing — Japan, the US and Europe — is turning to their governments and saying that they need to spend more money.

Think about that for a second.

The world has too much debt and they are saying the solution is more debt.

That’s how desparate they are. All these policies have failed.

The only Central Banker in the world right now that Jim has admiration for is Elvira Nabiullina, the head of the Central Bank of Russia. She’s the only hawk left and she’s raising rates and telling people they can’t have easy money.

Jim believes she’s the best Central Banker out there right now.

The New Case for Gold is available at Amazon.

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

 

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Elaine_RedRock_5

 

My thoughts…

Well, the first U.S. Presidential debate has come and gone and I feel as though I’ve been bread and circused.

When a system breaks down, near its end, it isn’t the information that is judged and weighed, it is the transient communication itself.

Every morsel of sound uttered it taken apart to look for the evil that is seen in the opponent. Every eye blink matters.

It’s like a legal document as opposed to an academic paper. The latter makes statements read in paragraphs, backed up by citations, while the former is meant to be dissected word-for-word, because there is no trust. Not even enough trust to make it through to the end of the paragraph.

It depends what “is” means.

If we want to know what a person believes or what they intend to do in a situation then we have to ensure we understand their communication.

This debate was not about that.

The system has devolved to where the discrediting is louder than the crediting. Just like the financial system. There is no more confidence, and once that realization becomes widespread and no one will give credit, then the financial system will fall into the bread and circus games like this debate was.

The moderator, be it the IMF or BIS or UN or any other combination of lettered agency, will take a side. They will debate you because they are biased as we all are biased.

And rules of conduct will not be followed when the stakes are high if they were not enforced when it was just a penny ante.

At the end of the night, after many drinks, it’s all in. Everyone is tired and apart from some blind luck in the last hand or two we all already know who the winners and losers will be.

So perhaps the more sober will take out their chips before it all devolves into spilled drinks and yelling. Hopefuly no shoving, though that seems to be going on by proxy at the moment.

Maybe the more clear headed players will make deals with other rational players and split the cost of the cab ride home. Then play again on another day with good nature and a nod to Team Share-the-Ride. We learn to trust in a vat of shared experiences after all.

Still others will bet on the outcome that is inevitable, whichever exhausted player pulls in the final “all in” pot with a lucky Ace up their sleeve. Or, as the debate, with a dealer who is acutely aware of which cards are coming up next.

And those who have seen this game before will cash out ahead and drive their own vescreen-shot-2016-09-28-at-10-10-07-amhicles home.

Yes, this debate was about choosing to keep a system going or trying to go back to one that worked before. But if the overall world view that the whole damn thing needs to grow forever is the basis for the debate then neither can win.

And that is the bread and circus game.

The ponzi scheme of world growth forever due to mechanizing the world, and then adding the dimension of time to the deals, is coming to a close.

The aristocracy lives in the past, as they have what they need due to what happened before they were born, and the plebeian class, the Roman lower class or working class,, live for today and don’t care about status. But the bourgeoisie, the middle class, are striving for “respectability”. For status. And they are promised it with everything in this system…for tomorrow.

Even our currency is a promise to pay. It’s all built on promises. On the confidence that the promises will be fulfilled.

It is now evident to many bourgeoise that a promise is for tomorrow and tomorrow never seems to come.

Who won the debate only matters in the game of persuasion and that game is part of the game of time. To influence the future with a promise. To persuade those who aren’t sure if they are winning or losing at this moment, or more clearly not sure if the promises for the future are worth their confidence.

At the end of the game, the debate game, the card game and the time game, is the time for paying up and laying low.

Who will win the American election?

I believe what was hidden, then purposely confused with bread and circuses, is coming to a close.

Perhaps this election has to do with an “all in” to the last pot of the night.

I’m looking at who is dealing for the clues to how it may go, as no one has ever proven it’s a fair game.

Or perhaps it’s all “fair game”.

But that’s debatable. ;)

 

Elaine Diane~

September 28, 2016

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Gold is $1,320.60 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 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.

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