3 Minute Gold News – Jim Rickards – Max Keiser – China Gold Petro Deal – Sept. 27, 2017

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 The Road to Ruin, by Max Keiser of The Keiser Report.

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:

China
Petro Yuan
Oil for Yuan for Gold Deal

 

 

Jim Rickards

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Interview Link

 

Begins 16 min.

CHINA CREATES YUAN OIL CONTRACT CONVERTIBLE INTO GOLD

The decline of the US dollar as the global reserve currency is going to unfold in stages.

The change isn’t going to happen overnight, but when it does start happening it will then cascade out of control.

People want to know the exact day so they can wait to the last minute to sell their stocks and buy gold, but Jim, or anyone else, doesn’t know when the stock market will drop or the US dollar value will crash. Jim covers the process in his books The New Case for Gold, The Death of Money, Currency Wars and The Road to Ruin.

The Road to Ruin covers how the monetary system will be locked down in a panic, when the confidence in the US dollar declines to the point where it becomes a cascade and panic, and people’s money will not be accessible from their bank accounts, stocks or funds.

Jim recommends not keeping your physical gold and silver in a safety deposit box in a bank, because in a panic you won’t have access to it.

Jim, or anyone else, isn’t going to know the day before it happens so you can convert your assets into gold to protect yourself from a stock market drop or the crash in the US dollar’s value.

CHINA AND A NEW GOLD STANDARD TYPE OIL FOR YUAN FOR GOLD DEAL

China has cobbled together two or three different things to make a new oil deal.

Some years ago they launched the Shanghai Gold Exchange. It’s a wholesale physical cash for gold exchange. You can sell gold to them and buy gold from them.

Then China launched a gold futures contract which is paper gold which you can buy or sell forward.

China is the biggest oil importer in the world and they buy a lot of their oil from Saudi Arabia and Russia.

Russia is the largest exporter of gold in the world.

So China combined all these things.

They said, “You sell us oil. Instead of paying you US dollars like we’ve done since 1974, we’ll pay you in Chinese yuan. If you don’t want to keep the yuan you can immediately convert your yuan to gold at the spot price on the Shanghai Gold Exchange.”

It’s as if the oil was sold for gold. And if they don’t like the exchange rate risk for the price of gold at the time of the sale they can go to the futures market and hedge that risk.

So by combining the different elements there’s in effect a yuan benchmark price for oil.

That’s a big deal.

That’s the end of the US Petro Dollar deal.

Jim’s first official visit to the White House was in 1974 to discuss the original oil crisis.

THE NEW PETRO YUAN

Nixon took the US dollar off of the gold standard in 1971 but it didn’t end overnight.

It was two or three years of figuring out what to do.

By 1973 the Arabs were fed up because inflation had kicked in so they didn’t want to sell their oil for US dollars, because they weren’t confident in the value of the dollar.

So the Arabs were buying gold with the dollars they got when they sold their oil.

The US came up with the Petro Dollar deal where Saudi Arabia agreed to sell their oil to everyone for US dollars, and the US agreed to take those dollars and put them in the bank, and in effect guarantee a stable dollar. The US would then take those dollars and lend them to other nations who could then buy more oil from Saudi Arabia.

So it all went around in a circle. That was the original Petro Dollar deal.

That Petro Dollar deal held until last week when China created the Petro Yuan deal.

So oil will be priced in yuan but no one wants yuan. So China says that’s not a problem because they’ll exchange the yuan for gold.

China can do this because they quadrupled their gold reserves in the last ten years.

China’s reserves have gone from about 600 tonnes in 2006 to now officially 1,800 tonnes.

The 1,800 tonnes is a bogus figure though, because calculations of their imports, their mining output, and data research done by Jim and others show China has closer to 5,000 tonnes, and maybe a lot more.

China is now standing up to the market and assuming the gold standard role that the US abandoned in 1971.

FIXED PRICE

There still isn’t a fixed price for the gold or for the yuan. China is saying if you give them your yuan you can immediately get gold, but it’s not at a fixed rate.

The price of the yuan still floats and the price of gold still floats.

So to cover that the Chinese are saying the buyer can lock the gold in a futures contract if they want to lock in a US dollar price or euro price.

So it’s still not a rock solid gold standard but it’s getting really close.

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

 

 

 

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Cape Breton Island 2017

My thoughts…

I’m on Cape Breton Island, Canada, in a charming Inn looking out the window at the Atlantic Ocean.

A deer just ran across the grass in front of my window. A sailboat is swaying at the dock.

Last night I sang at a little pub.

The fiddle player who also played last night owns the sailboat, and if it wasn’t for the misty, rainy day today I’d be taking up his invitation to go sailing. Hopefully another day before I go. The Cabot Trail is on the agenda tomorrow. Fun.

 

 

 

 

 

 

 

 

 

The natural landscape here on Canada’s east coast is a really good example of a complex dynamic system — all the parts affect the others. Each piece – a tree, a wave, a cloud, a canal, a shoreline, a deer – does not just live on its own.

The world market is also a complex dynamic system.

We have to look at economics like a forest instead of a car. How do we tend a forest? It’s not a machine — a closed system affected by nothing but what you input. If a piece of a complex market falls apart it affects every other market. Not just in a small way but a cascading huge way.

As the world markets became more and more interdependent they needed to be managed like a living forest and not a car. But the whole world is swinging back from Gutenburg’s mechanical age to electricity’s age of the field — all interconnected and all at once instead of a sequence in a straight line.

Central banks are the epitome of mechanical oversight, and have done nothing but pour gasoline in a non-existent tank.

Complex dynamic systems are known to fall apart consistently in small ways, and everyone once in a while in a large way. That’s what keeps it going over the long term. We have the seasons of Spring, Summer, Fall and Winter. And every once in a while there’s a natural disaster. That’s the natural, repeating cycle. You can’t know the trigger but it always comes and resets itself, and so you prepare for it.

Now we all live in a global economic forest, thinking it’s a big machine, and knowing it hasn’t had a huge breakdown in a long time.

The last disaster, a little one in 2008, was ‘solved’ by delaying it to save a few elite banker buddies. Soaking the forest in debt.

Screen Shot 2017-09-27 at 11.04.46 AMThe banks are now bigger than they were in the 2008 Crash, and the world is more in debt and more interconnected.

Central Banks have been pouring jerrycan after jerrycan of gas on the brittle branches for years and years now — thinking it’s a car needing a little jump start. Wondering why it’s not working. Pretending it has with pretty little lies.

And now we’re all connected. Like it or not.

All of us around the world are sitting in a forest soaked in gasoline.

Thinking about a spark.

 

Elaine Diane Taylor~

September 27, 2017

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Halifax 2017

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Gold is $1,286 U.S. per ounce today.

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A Terrible Breeze    (North Korea and Nuclear War)

The news comes down
A little bluebird sings
Words of war
Of fire and furious things
Of testing might
‘Til no patience knows
If keeping still
Still keeps a peaceful home

It’s a terrible breeze
They speak of today
Of threats that used to live a world away
We all know wind
Can blow both ways
And a terrible breeze could blow it all away

A worldwide net
Sees the village grow
Until we all forget
What each one used to know
When a blind bird’s wings
Can reach the shore
And turn the wheel of peace and war

Village fools sinking down, down, down
Debt and gold wound in numbered shrouds
Deal of a life it’s bread and clowns
Can we afford another go around?
The news comes down. It’s a terrible breeze. The news comes down.

words and music Elaine Diane Taylor
©2017 Elaine Art & Media SOCAN/ASCAP

 

Single available on iTunes

 

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Not Much of a Holiday (Greek Debt and Media Persuasion)

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.

 

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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