3 Min. Gold News
A synopsis of Jim Rickards, New York Times bestselling author of The New Case for Gold, The Death of Money, Currency Wars, The Road to Ruin, Aftermath and The New Great Depression with Daniela Cambone of Stansberry Research.
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 Defence.
Part 2
Topics:
INFLATION
THE FED
UKRAINE RUSSIA WAR
SANCTIONS
STOCK MARKET
CBDCS AND BITCOIN
GOLD
Interview link:
RISING INFLATION
This is the highest inflation since 1982 but that inflation was the end of a cycle.
Jim was expecting higher inflation but he’s pushed up the timeline because of world events like the Russia Ukraine war and sanctions on Russia.
There are two kinds of inflation:
1.) Demand-Pull Inflation is where there’s more demand than there is supply.
Lots of people want something and there’s not a lot of it.
So, the worker asks for a raise to pay for the rising costs and they buy something today because they think it will cost more tomorrow.
2.) Cost-Push Inflation is where there’s an increased cost of the factors of production so a higher cost to make the supply.
It’s about things like a war, sanctions or supply chain disruptions.
The Fed can possibly do something about the demand-pull side but they can’t do anything about things like the price of oil.
The 1970s inflation started with an oil embargo and supply of gasoline which spiked the price. The Fed couldn’t do anything about it.
This inflation has come from the supply side.
THE FED
The Fed has exploded the money supply.
The M0 has gone up 400% and they’re trying to reign it in a bit.
But that money doesn’t go anywhere. The Fed buys bonds from the banks and gives the money they ‘printed out of thin air’ to the banks. The banks just take that new money and give it back to the Fed to hold as savings for the banks.
So the liability has gone up as loans and the assets have gone up as bonds but it hasn’t done anything for the economy.
More for the real economy comes from commercial banks lending and consumers spending.
That’s the velocity, the movement of money, and that has crashed in the last ten years and is still going down.
Money printing isn’t causing inflation because the money isn’t going anywhere.
INFLATION
Inflation is heading high and is going to last longer.
People are noticing inflation but the cause up to now hasn’t been demand by consumers.
The war in Ukraine has put a turbo charge on it.
TURNING
How does that turn into deflation and finally disinflation?
Gas prices have about doubled but people need to drive.
So you have to buy the gas at whatever price, but you’re left with less money to buy other things.
Real wages are going down because inflation is higher than the raises.
So that slows down the economy.
INTEREST RATES
The Fed isn’t going to be able to fix this.
They tried raising rates and it didn’t work. The stock market tanked 20%.
Can they raise rates to the nomal 2.5% and their balance sheet to the normal of about $3 trillion without causing a recession, a stock market crash or both?
No.
UKRAINE RUSSIA WAR
The sanctions against Russia and the supply chain issues because of the Ukraine Russia war means the inflation would be happening anyways.
But now the Fed has said the taper is over, QE is about to begin, interest rates are going up and they’ll be going up for a long time.
That’s a recipe for a recession.
STOCK MARKET
The bond market and other areas build up in problems, and the stock market is the last to react. Then it can just drop 20% in weeks, like March 2020.
CBDCs
The creators of a central bank digital currency could ensure your privacy vis a vis the rest of the world but the government would know every transaction you make.
That’s part of a total surveillance state and is the way it’s been rolled out in China.
They already know where we are when we carry our phones around but they haven’t been able to control or track every purchase.
With a CBDC money then what if you voted for a political party that isn’t in power? Or you supported a cause the government didn’t support? In Canada, the government froze accounts for supporting a cause that protested a government policy.
IIt may be private to the rest of the world but it’s not private to the government.
So it’s “1984” (the book by George Orwell).
BITCOIN AND CRYPTO
Debating crypto vs. gold is really like debating fish and bicycles – they’re so different.
None of the technical analysis has anything to do with Bitcoin, or any other cryptocurrency.
We’re all immersed in an electronic environment that most are not aware of.
In other words, a fish doesn’t know what water is because it’s in it.
This environment is having effects on how we think.
Bitcoin is part of a larger digital environment that has erased the concept of money.
A recent academic paper listed 40 characteristics of money instead of the three we usually recite, and a review of 15 kinds of money we use.
So they looked at a matrix with 600 boxes.
What we have now is people who don’t know what money is.
It’s been replaced with “moniness”.
Jim Rickards can be found on Twitter and at James Rickards Project.
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My thoughts….
This was an intense interview and took a while to pull apart and research. Today I’ll re-post my thoughts on the big picture of the change from a mechanical world to an electric world.
I’ve been writing about this topic for over ten years now. My degree is in communications. I’ve studied the history, philosophy, sociology and news/mass media/government information angle from inside academia, as well as personal study on how gold and economics, and music and art, fits into this changing landscape.
We’re switching from the mechanical age to the electric age and it takes everything with it.
In terms of a mass society it makes sense that the switch of money and its fundamental understanding will be last.
Thoughts. Language. Societal structure. Communication. Family. The idea of nations and tribes. Everything.
And money.
So much of the tension we’re feeling in society is that mechanical overlap with the electrical. From oral to written to oral. From a group creation that is dynamic to a power elite that injects information to the masses, and controls the access to information for personal autonomy.
Language and the way we use it defines not just how we communicate but how we think.
And how we think gives us the parameters for what we entertain as the realm of possibility.
An idea is a kind of value that is formed into a message by one party, being a person or group, and is encoded and sent through a medium, such as the air, or through an electromagnetic wave, or visually through a painting, or by a touch, or even symbolically through a coin. And that idea of value is then received by another party, being a person or group, and decoded by the receiver on the other side.
When a relationship is stable, whether that’s a family or between nations, we aim for the coding and decoding to be properly understood on the other side. In an unstable one there is an intentional misuse and changing of definitions in order to gain advantage at the other’s expense.
As a new technology comes there are new ways of coding and new ways, media, of sending messages.
Medium means single and media is many medium.
Funny then, money being a medium of exchange will perhaps become a media of exchange. How about that Jim? A new definition for a new time.
,
Mass media was created to send a message from one party to many parties. One-to-many. The medium was direct and one way. The masses did not have an effective way of sending a message back in order to gain an equal relationship of understanding and negotiation.
Before the printing press was invented a society lived with an interplay of communication. A society was oral and tactile before the alphabet and printing. It was dynamic with everyone contributing all at once. There was no private viewpoint as there was no sitting alone at home decoding a message. The messages were sent and received and sent and received all at once.
It was the printing press and the book the begat producers and consumers. The repeated mechanical letters that were read by the single person alone, brought a power to the message maker as they became immortal and frozen in time. Society stopped being a living, dynamic thing. It split into individuals who received a message and formed an individual opinion as they decoded the letters in sequence. Letter by letter. Word upon word. Meaning was built in sequence
Now we are in the electric age. The light bulb goes on and the whole area, a whole frame, is filled with light. Day and night are forever altered. Time and space are altered. We see everything in the blink of an idea. The medium is instant and not linear.
Eureka! Insight in a flash. Value understood in a flash.
Symbolism carries insight in a flash.
And now money, the most deeply held value of the elite, is making the switch from mechanical to electric.
Eureka! Money changing hands in a flash.
Received across borders in a flash.
Those with power want to keep it.
Those without it want more.
This new technology of money is the game of coins and crowns.
So, we come to the beginning again. Language. Definitions.
What is money?
How will the balance of power be affected?
How does that play into the current wars and alliances?
How do decentralized crypto and CBDCs fit in?
Will write more soon.
Elaine~
Thank you to Jim Rickards for including me in his bestselling book The New Case for Gold.
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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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Coins and Crowns
words and music Elaine Diane Taylor
SOCAN/ASCAP
from the album Coins and Crowns
Coins and Crowns is featured in Episode 1 of Mike Maloney’s documentary series Hidden Secrets of Money.
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Not Much of a Holiday (Bank Holidays and Media Persuasion)
words and music Elaine Diane Taylor
Single available on iTunes
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A Terrible Breeze (War and Social Media)
The news comes down
A little bluebird sings
Words of war
Fire and furious things
Of testing might
‘Til no patience knows
If keeping still
Still keeps you safe at 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 can blow it all away
A worldwide net
Sees our village grow
Until we all forget
What each one used to know
How 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
Single available on iTunes
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Preparing for the Fall is a live boutique album available for digital download — featuring Wag the Dog, Black Swan Dive, American Pie and Gods of the Copybook Headings. Also available on iTunes, Google Music, Amazon Music and major digital distributors.
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The Gods of the Copybook Headings
words by Rudyard Kipling and music by Elaine Diane Taylor
from the album Preparing for the Fall.
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 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
from the album Coins and Crowns.
“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“. 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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Elaine Diane Taylor 