3 Minute Gold News – Jim Rickards – Lock Down – The Road to Ruin – Nov. 17, 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, Currency Wars and newly released The Road to Ruin, with Vonnie Quinn and David Gura of Bloomberg.

Jim is the editor of Strategic Intelligence, 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:

Next Crisis
Financial Elites
Systemic Risk
Banking System Lock Down

 

Jim Rickards

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Interview Link

NEXT CRISIS

People say, “How can there be a crisis? The Fed printed $4 trillion.”

The problem is that the world created $70 trillion of debt on top of the $4 trillion of money printing.

We’re actually more leveraged than ever.

The biggest banks that were too-big-to-fail in 2008 are bigger than ever. They have a larger percentage of the total banking assets and their derivatives books are much bigger.

So everything that was unstable in 2008 is worse today.

You know these crisis happen every 7 or 8 years. It doesn’t mean it’s going to happen tomorrow, but 1994, 1998, 2008 — it’s been almost 8 years since the last one and it won’t be very long before the next one.

But the next financial crisis is going to be different.

The last two times, in 1998 and 2008, when everyone wanted their money back out of the system they printed the money.

The next time they’re not going to print the money because they’re tapped out.

They’re going to lock down the system.

Money market funds will suspend redemptions, bank ATMs can be reprogrammed to give you $300 a day for gas and groceries, and they can selectively shut the banks.

We’re seeing it. We saw it in Greece, we saw it in Cyprus and we’re seeing it today in India where the banks are closing — they’re out of cash.

This is the plan that comes out of the G20 Brisbane Summit in 2014 — it was the “Bail In Lock Down” plan.

We’re at a pivotal point.

The Trump economic team is made up of the “Reagan Team” and they’re going to run the Reagan playbook. But there’s a big difference.

When Ronald Reagan was sworn in in 1980, interest rates were 20%, inflation was 13% and debt-to-GDP was 35%. So interest rates had nowhere to go but down. The bond market had nowhere to go but up, and stocks and bonds rose together.

Reagan piled on debt but he started from a very low level. So Reagan had all these tail winds.

Now Trump is going to try to run that same playbook with nothing but headwinds.

Debt-to-GDP is 100%.  Interest rates have nowhere to go but up and inflation has nowhere to go but up.

FINANCIAL ELITES

The elites — Christine Lagarde, Mario Draghi, Larry Summers — professors, Central Bankers and thought leaders are all of a like mind. They all went to the same schools and they all had the same teachers.

These Globalized elite think alike.

The problem is that you can have the same policies but if the initial conditions are different then you will get very different results. That’s what Complexity Theory teaches.

There was a strong US dollar during the Reagan years and that was deflationary.

But when inflation was starting out at 15% you wanted disinflation.

With Trump starting out with inflation at about 1.6%,  a strong US dollar could throw you into zero or even outright deflation as opposed to disinflation.

So with the same playbook in different conditions you’ll get very different and potentially disasterous results.

SYSTEMIC RISK

The systemic risk doesn’t care if you’re a Republican or Democrat.

When an avalanche happens and it kills a skiier it doesn’t care what party the skiier belonged to. There are bigger forces at play than the partisanship and policies they choose.

And these forces cannot be stopped except by extreme measures, and that’s why Jim is talking about them locking down the system.

BANKING SYSTEM LOCK DOWN

It’s all documented in Jim’s book The Road to Ruin.

For example, with money market funds in 2008 they could not suspend redemptions — they had to by law give you the money back and they couldn’t break the buck.

Both of those laws have been changed very recently.

Now they can break the buck. You used to put a dollar in and get a dollar out with interest, maybe low interest, now they can give you $.95 or $.94, depending on the market.

Worse yet, they can suspend redemptions.

From a policy point of view it’s called macroprudential regulation  (and from the Bank for International Settlements).

In 1933 FDR shut the banks, in 1914 the New York Stock Exchange was closed for 5 months. We’ve seen all this before.

When they get desperate they’re going to lock down the system.

Does it save the world? Might buy a little time.

But what if you want your money back?

 

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Jim Rickards can be found on Twitter and at James Rickards Project.
The Road to Ruin can be found at Amazon.

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My thoughts…

Quality increases when we specialize and then join hands with other specialists.

I don’t have the time or training to be good at everything, but I can take the hands of those who specialize in different areas.

I’m at this moment working with a printer who does beautiful quality letterpress printing. She is making the packaging for gold jewelry I’ve been working on. I could make the blocks, get the ink and create each bag and insert myself, and I could even become happy with the results, but a better use of my time and resources at the moment is to work with a high end printer specializing in letterpress printing. That’s how I will bring quality into something I feel passionate and happy about.

Without the printing one of the products looks something like this:

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And now the new logo and branding will be adding something like this:

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A wax seal with logo and an insert explaining where the “wild gold” was sourced and fair compensation for independent miners will all be beautiful with the help of those who are experts in their fields.

I trust Jim Rickards. He’s an expert in his field of finance.

I’ve spent time with him over the last few years and had some very indepth conversations. We’ve hiked and we’ve talked. He’s teaching things he knows about finance and systems, and how people operate under stress, because he’s lived it.

We have some similar experiences in our pasts that not many people go through. So we understand each other and he’s a good friend. He loves his family and he loves his country. So I can tell you that he’s writing his books and speaking on media because he cares about people and about using his skills to make the world a better place for his family, his friends and everyone who doesn’t have the inside information he has.

There is a hard time coming.

It doesn’t matter who is in the White House or any other government in the world. Hopefully they can lessen the blow, but the debt system has baked it in the pie. Past events set it up.

But individually we can prepare if we have good information.

I’ve talked about it for quite a few years now, from an artist’s perspective. I wrote “Wag the Dog” before the Ukraine crisis and wrote “Coins and Crowns” before any hint of the 2008 crash. “We Know How it Goes” was before anything macro was seen because I experienced it in the micro and I knew there are ways of manipulating group thought that are shocking and not very nice, and I saw media and world elite doing just that.

“Not Much of a Holiday” was about Greece locking down the banking system, but about so much more coming in the future. Already since writing we’ve seen Puerto Rico and now India have the same “around the corner next in line” experiences. We’ve seen the South China Sea heat up and we’ve heard the mass media try to tell us what to think and do. It’s all coming to more nations.

But there are ways to prepare and be happy through events beyond our control. It really helps to have good information. Jim’s book The Road to Ruin talks about it because he has inside information and wants to help people who aren’t inside.

Music I make and things I write and talk about are because I experienced the brunt of group thought based on false information and social pressure. I lost everything when it happened. So I want to help others prepare for the macro experience.  Jewelry with raw wild gold and glass I’m making, as well a music and words I write are all part of me being a positive contributor to events that are coming. For me it’s not about money — it’s about peace of mind.

There are many beautiful things to be a part of in the changing of the time. Winter is coming, but then comes Spring. We can prepare for the winter, help others in the middle of it, and be ready for the Spring.

Not just the end of a cycle of economic growth. It’s the end of an age.

It’s the end of Modernity. New technology and new information will be coming out into the open. And then comes something new and amazing.

Thank you for reading, listening and being a part. Thank you for purchasing and listening to the music. I love hearing from you.

Yes, as George R.R. Martin says, Winter is coming.

But then comes Spring.

Elaine Diane Taylor~

November 17, 2016

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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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Nothing on this site is intended as individual investment advice. We’re all watching which way the wind is blowing.

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