3 Minute Gold News – Jim Rickards – Max Keiser – The Fed and Gold – Sept. 29, 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:

Fed Governors
Gold

Jim Rickards

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Interview Link

Begins at 16 min.

FED GOVERNORS

There are only seven seats on the the Federal Reserve Board of Governors.

There’s a thundering herd of Fed Regional Bank Presidents, but put them aside because it’s the seven on the Board of Governors that set the policy.

There were two vacancies on the Board when President Trump was sworn in because Obama was sure that Hillary Clinton would win, and that she’d get to pick the two new Governors.

Within a few months of Trump being sworn in, Dan Tarullo (the top financial regulator) resigned.

Now you’re got three vacancies of the seven seats.

Stan Fischer is the Vice Chair. His term wasn’t up until next summer but he just unexpectedly resigned.

So now there’s four vacancies.

Janet Yellen is the Chair and her term expires February 1, 2018.

Trump is going to have to pick a new Chair. He’ll probably do it before the U.S. Thanksgiving, so there’s time for the Senate to have them in place before February.

That’s five vacancies out of seven seats.

Of the two remaining, one is Jerome Powell who is already on the Trump train.

The only Liberal Progressive left on the Board will be Lael Brainard.

You’re going to have six out of seven Republican because the President nominates the Board members and they’re confirmed by the Senate.

Trump will choose the remaining Fed Governors and they’ll each sit for 14 years. So Trump owns the Fed.

Jim believes the next Chair will be Kevin Warsh. (Trump just met with Warsh.)

What does this mean for monetary policy?

Everyone debates dove vs. hawk but it doesn’t matter.

The hawks have to be doves because the Fed, as usual, screwed it up. They’ve been on the road to tightening for four years, but they’re tightening into weakness saying that the economy can bear it.

It can’t.

The inflation rate has been dropping and moving away from the 2% inflation per year  target the Fed wants.

The Fed will have to flip and start to ease, which is one of the reasons that gold has been going up.

GOLD

The Gold market is very forward leaning (looking to the future and what they think is coming).

Jim said this is what was going to happen, and gold and the euro have gone up as he said they would.

The Fed printed $4 trillion but 4 trillion x zero = zero. The economy needs velocity (meaning that the money is being spent in the economy and not sitting in savings or being used to pay off debt).

But it’s not being lent out by the Fed and it’s not being spent by the people.

Velocity is psychological and the Fed and government can’t control that.

INFLATION

The Fed is going to keep trying until they get the inflation they want.

They’ve haven’t got the inflation for eight years. They failed and believed in the Philips Curve model, which is garbage.

But they’re going to get it.

Janet Yellen is going to be the last person who believes in the Philips Curve.

The US needs the inflation because they’re going broke.

The US can just print money backed by nothing to pay their debts, unlike Greece and Argentina who can’t print dollars.

The problem is that the Fed prints dollars and gives them to the banks, who just give it back to the Fed, earn a spread and leverage that spread 10 to 1, and then Jamie Dimon gets a $50 million bonus for doing something a trained monkey could do.

That’s the system we have today.

It’s going to change because the US is going broke.

It’s slowly going broke right now.

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But it will be like the line from Ernest Hemingway’s book The Sun Also Rises:

“How did you go bankrupt?”
“Two ways. Gradually, then suddenly.”
– Ernest Hemingway, The Sun Also Rises

BANKS

Jim says that the Fed’s “Job One” since it was created in 1913 has been to prop up the banks.

The bankers are parasites and leeches.

But the Fed also has a day job (to manage the economy) and they need inflation. There’s lots of way to measure inflation but the way the Fed measures it isn’t working for them.

Jim says you can get inflation in 15 minutes.

Here’s how:

The Fed Board goes to Washington and they close the door. They come out and go to the microphone and say to the people, “As of now the price of gold is $5,000 per ounce. We’ll use the gold in Fort Knox in conjunction with the Treasury to stand up to the market. We’ll make a two way market in gold.

If you think that price is cheap then come and buy it. and if you think that price is expensive we’ll buy it from you. Just like any market maker in the history of the world. We’ll keep the price at $5,000 per ounce by buying and selling if it goes above and below that price to keep it at $5,000.

If the Fed uses the printing press and the Treasury’s gold and stands up to the market at $5,000 per ounce for gold, guess what?

You have an 80% devaluation of the US dollar in 15 minutes.

They did that in 1933. So why not do it again.

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

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My thoughts…

I’ve noticed the upswing in the interest in talking about gold.

When I meet people they actually want to talk about money, gold and what’s going on with politics and different nations.

People are more concerned now because it’s starting to affect them. They’re less sure about pensions or jobs or the value of the dollars they have in savings.

I’ve been following gold for over seventeen years. Songwriting about it since then and goldsmithing since before then. It’s not longer something I decline to mention when I meet people. The whole ‘gold bug’ thing is declining.

When I sing people are interested in hearing the economic songs now. People want to know what’s going on and ask when there’s a big dinner in someone’s home.

As I’m doing my traveling across Canada that’s what I’m noticing – it’s all across the country.

As I was saying in the last post:

The banks are now bigger than they were in the 2008 Crash, and the world is more in debt and more interconnected.  The world economy is a forest and not a machine, as William White says.

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

And now we’re all connected. Like it or not. It’s a global economy.

All around the world we’re sitting in a forest soaked in gasoline.

Thinking about a spark.

Elaine Diane Taylor~

September 29, 2017

 

 

 

 

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Cape Breton Island, Cabot Trail, Nova Scotia 2017

 

Moose River Gold Mines in Nova Scotia is aggressively exploring rural Nova Scotia for gold mining:

http://www.cbc.ca/news/canada/nova-scotia/moose-river-gold-mines-mining-gold-1.3863544

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Gold is $1,282.10 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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