3 Min. Gold News
Thinking of the future. Of changes. Of safely getting from here to there.
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 Great Britain News.
Jim’s book “Sold Out: How Broken Supply Chains, Surging Inflation and Political Instability Will Sink the Global Economy”, is available for pre-order now.
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.
Topics:
UK Crisis
US Dollar
QT
Inflation
UK CRISIS
The crisis in the UK is not about the unfunded tax cuts.
Something else is happening.
The UK mini budget is a really big deal.
It is the right budget at the right time.
If you look around the international monetary and economic system, it’s very hard to find any leaders or policymakers who know what they’re doing.
The UK seems to be the exception – this is the right budget at the right time.
Separate from that budget you have the collapse of the UK currency called sterling and of government bonds called gilts.
That’s another big deal, but it has almost nothing to do with the budget.
Both things are part of a global monetary contraction.
US DOLLAR
There’s a pending global financial crisis that has to do with a US dollar shortage.
This is going on around the world.
Stocks are down. Bonds are down. Gold is down. Oil is down. The euro is down against the US dollar. Sterling is down against the US dollar.
Everything is down?
How can that be?
It’s all because the US dollar is up.
Everything is traded in terms of dollars, so everything is going down in price as the dollar is going up.
That is a deflationary thing. So actually deflation is coming.
This is all because people around the world want US dollars to use to buy US Treasuries to use as collateral for loans.
The loans are used to post as margin to support $1 quadrillion of derivatives.
(In other words, they need to have US dollars to keep the whole value of their assets from falling off a cliff, because there isn’t enough money out there to keep paying the fees and interest payments on all the $1 quadrillion in contracts, and on the contracts based on the value of other contracts, which are based on other contracts, based on assets that are losing value. If the base asset loses value then all the contracts can quickly be called on to pay up something now. They have to have that something ready now. Liquid. There’s not enough money in the world to cover what will be called on.)
FED QT
The Federal Reserve is raising interest rates fast and hard at exactly the wrong time.
Central banks are now kind of irrelevent.
England’s central bank made a classic blunder with this gilt purchase.
The minute you set a deadline the market trades against you. Here, you just short the Bank of England, and collect your winnings on Oct. 15th.
DOLLAR SHORTAGE
It’s hard to image there’s not enough dollars out there because the Fed printed $7 trillion.
How can there be a shortage?
Just like with the Bank of England buying gilts (government bonds), what the Fed did when they printed money will have no effect.
The printed money isn’t going out to the citizens as loans to buy things or build businesses. That printed money is going to the commercial banks and it sits on their balance sheets as excess savings (called reserves).
(The banks are doing this to protect themselves in a crisis, which promotes a crisis itself because the money doesn’t get out into the economy to keep it going.)
INFLATION
People are rightly worried about inflation.
It’s right here.
But this is going to turn into disinflation and deflation by this winter or early next year (2023).
UK
You can get economic stimulus from fiscal policy but not from monetary policy.
(One is supply side and one is demand side.)
Liz Truss is doing fiscal policy right now.
So, it’s the right thing at the right time.
IMF
The IMF critisized Liz Truss.
Jim says the IMF has been wrong about everything for 25 years.
Jim Rickards can be found on Twitter and at James Rickards Project.
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My thoughts….
There is so much corruption in the system that there is no more trust.
The US dollar is the cleanest dirty shirt, so all the world money will rush from other nations to try to find some safety.
The BIS speeches are very blunt, but not public (other than the transcripts on their website). They stated months ago that they need to create more money, being more loans, in order to keep their central bank system running.
Their central bank challenges (Bank of France Sept 22, 2022 speech) is the:
“…“triangle of disruptions”: new players; new settlement assets based on blockchain; and new decentralised market infrastructures.”
On top of that they are very worried about humans and labour supply. They, the BIS, had governments lock down their citizens and stop the world economy dead.
They made a critical error when they stopped the economy in “mid-air” as Carstens, the head of the BIS, said in a speech last month.
“…it was decided to bring the global economy intentionally to an immediate standstill in mid-air. But turning on and off supply is not like turning on and off demand. With the benefit of hindsight, it was perhaps naïve to expect that it would be possible to easily reignite the growth engine, quickly recover speed and again fly smoothly. We now know better.”
They believed, in error says Carstens, that they could just start it up again at their word. But it didn’t work. They couldn’t just move manufacturing to another poorer country who would jump at the work. People didn’t go back to work. The people were too damaged. They were emotionally damaged and did not go back to work. Carstens then directed nations to put funds into fixing the humans so they could work. He said they must view that their error:
…may leave a persistent imprint on both the quantity and quality of workers. Labour force participation rates remain below pre-pandemic levels in many countries, signalling a potential shift in attitudes towards work. Lost schooling and disruptions to regular healthcare services during the pandemic could scar human capital.
The US central bank has raised rates fast and hard, just as the BIS directed, ahem ‘suggested’, all nations do in order to work collectively to bring down worldwide inflation.
Carstens said they needed inflation at the beginning of the pandemic time. They wanted and needed inflation. Their error has caused untold pain to people around the world, but they want to keep the power to try something else. “We now know better” he said.
Global citizens are suffering, and particularly the poor and working poor. They are struggling to buy food and fuel just to survive. The BIS has openly said this will get worse before it gets better. Many months ago a speech said they know the poor will suffer terriibly – they’re just trying to save the middle-class and rich now. Singapore’s central bank is giving funds diirectly to the lower income citizens to help offset this inflatiion which came at “no fault of their own”. Other nations are considering doing this too, but all seem to have a “too bad for them” view of things.
In order to save the central banking system as a whole, the speeches all recently say that every nation must raise interest rates together. Japan and China said no. They each gave speeches saying they are doing QE for their people, because their nation cannot absorb the pain of intense inflation. Canada jumped up in joy and their central bank speech announced they’d raise rates no problem. Once Japan and China said no it then it became a currency war. Britain has had to do an emergency QE. Their central bank speech from this week said they are unofficially going to cut rates and do QE in November. No public. The speaker said it’s his own view and not necessarily that of the Bank of England. The speech said they will communicate what they’re going to do throough speeches. Central bank of France is quietly saying the same.
Carstens said in his August 2022 speech that globalisation is “losing steam”. He said it’s because of the dramatic, growing spread between the rich and poor. The looters know the game is almost done and so it’s every person-with-power for themself.
From the same speech, Carsten said structural reforms are not done by governments because:
Vested interests resist changes.
The can is kicked down the road.
Elaine~
My musical style is feeling more Leonard Cohen and less Joni Mitchell now. With a smattering of Alice’s Restaurant.
My apologies for the delay in “Janet Louise” but playing at home in the livingroom is where a song becomes it’s own life. It’s almost there.
This one is about Janet Yellen, Summers, Dimon, punch bowls, musical chairs and the hurricane building.
Hush little citizen, sway, sway, sway, while the music still plays.
This little piggy went to market…
……….
Beautiful Lie
A Poem
A sword and a shield and a castle worth keeping
A rod and a reel and a season afloat
A dog and a pony are so entertaining
But if we all clap then we all know.
A weather report of a still, sullen morning
Building a castle of silica sand
Washed all away in an afternoon torrent
Who carries a fault with a shaking land
A shaming to share is the teacher to apple
A loss of the hours to bake up that pie
Pass out the piece of a coin of your making
All goes to dust if the builder says “mine”.
Who is the love and who is the foe now
When both declare the beautiful lie
Promise me promise what cannot be given
Take off the brake as hills are to climb
a folk tale of a peculiar politician and banker woe
Elaine~
Thank you to Jim Rickards for including me in his bestselling book The New Case for Gold.
……………………………………….
Nothing on this site is intended as individual investment advice. We’re all watching which way the wind is blowing.
……………………………………….
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.
……………………………………….
Not Much of a Holiday (Bank Holidays and Media Persuasion)
words and music Elaine Diane Taylor
Single available on iTunes
……………………………………….
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
……………………………………….
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.
……………………………………….
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.
……………………………………….
Nothing on this site is intended as individual investment advice. We’re all watching which way the wind is blowing.
……………………………………….
3 Min. Gold News
Thinking of the future. Of changes. Of safely getting from here to there.
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 Nick Hubble at Fat Tail Investment Research.
Jim’s book “Sold Out: How Broken Supply Chains, Surging Inflation and Political Instability Will Sink the Global Economy”, is available for pre-order now.
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.
Topics:
Sanctions
Russia & Ukraine
Global Economics
SANCTIONS
You can define the sanctions. You can impose the sanctions. But what happens next?
Jim is a sanctions expert.
He’s worked with the U.S. Intelligence Agency for over a decade. One of the things he did was advise on financial/economic warfare and sanctions.
Jim also worked for the Commitee on Foreign Investment in the United States. It vets foreign investment and the takeover of American companies from a national security perspective.
Jim has lectured on this at the U.S. Army War College.
It’s easy to apply a list of sanctions, but can you think two moves ahead, and three moves ahead?
What are the reactions to the sanctions?
What’s the blowback? Does it hurt the U.S. more than it hurts the enemy?
GLOBAL ECONOMY
We’ve spent 30 years getting a densely interconnected global economy.
How on earth do you think you can blow apart one part of it and not affect the other parts?
Of course it affects all the other parts of the global economy.
RUSSIA
Russia’s oil and natural gas revenues are at an all time high.
Any oil that Europe doesn’t want, for whatever reason, the Chinese and the Indians are happy to buy.
And they’re buying it.
The U.S. can say, “We’re going to call Lloyd’s of London and tell them they’re not allowed to insure Russian vessels.”
That might sound effective because they can’t ship the oil if they can’t get insurance on the vessels.
But there’s “Self Insurance”.
If you go back to the 1500s you can see, as shown in Shakespeare’s Merchant of Venice, you can get Self Insurance, where a group of about 20 vessels each takes a slice of revenue and put it in a pool.
If one of those vessels is seized or sinks then it’s paid for out of the pool.
That’s what people did before insurance companies were invented.
So, with sanctions, they sound good but there are tried and true work arounds, or they don’t work the way people expect.
With Russia, their oil and gas revenues are up and they have willing buyers in China, India and elsewhere.
Many countries are neutral.
The U.S., the E.U., Canada, Australia and Japan are a pretty powerful block.
But look at the major economies that have stayed on the sidelines: India, Brazil, Saudi Arabia, Turkey, all of the BRICS and the Shanghai Coooperation Organization. Members in central Asia, and China.
A lot of major economies are not playing along with sanctions.
RUSSIAN CENTRAL BANK
The Russian ruble is almost too strong. They may be looking to cut interest rates. They have cut rates to some extent in order to weaken the ruble.
It’s not only stronger than it was just before the war began, it’s stronger than it has been in recent years.
That also helps Russia get out of the boycott because their currency goes further when they’re trying to buy imported goods.
Russia’s reserves are up, their hard reserves are up (like physical gold), oil and gas sales are up, and the ruble is stronger.
Meanwhile, what’s going on in the west?
UNITED STATES
In the States it’s $5.00 for a gallon of gas. That’s not high for the EU but it’s unheard of for America.
The U.S. was a producer and exporter of oil and now they’re an importer.
They’ve been drawing down on the emergency gas reserves, the Strategic Petroleum Reserve, in theory to mitigate the gas price increases in the U.S.
Why not just pump more oil?
The problem was never the amount of oil – it’s refining capacity.
The oil is refined to turn it into gasoline, deisel or jet fuel. The bottleneck has been at the refiners.
Also, the ideaology of pumping oil has the politics around the public being told about the greening scam.
As well, there’s good evidence that some of those reserves are going to China.
The sanctions policy is no longer just stupidity.
It must be what they want.
If you were just dumb then you’d be right about half the time by just guessing or not knowing what you’re doing – the outcomes would be random.
To be wrong all the time suggests design.
The people who want the ‘green’ loans and purchases want higher gas prices because they think it will encourage the (borrowing) purchase of electric vehicles, and discourage gasoline consumption.
That means people who can barely afford a $30,000 car are supposed to go out and buy a $75,000 car.
The elite are in a bubble that they can’t see out of.
It’s like being inside a ping pong ball (an example told to Jim by his guide duing a hurricane at the top of Mt. Denali, the highest mountain in North America.) You can’t see anything and it’s dangerous.
The elite who are making these sanction policies are inside a ping pong ball. They are not in touch with every day citizens in America, let alone the average person around the world.
RUSSIA
The Russians have expanded and are now consolidating their gains.
The war is brutal and bloody and violent, but Russia is winning on the ground and winning economically.
EUROPE
Jim believes Europe knows they’re on the wrong side of this with sanctions.
They’re just looking for a way out.
Jim Rickards can be found on Twitter and at James Rickards Project.
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My thoughts….
Gold is resting. Not asleep. All cycles in economics, as well as every biological closed system, follow a pattern that is similar to waves on the ocean.
New technology always brings new money. Primitive societies used commodities to trade a surplus of a valuable item they held for items they lacked.
These societies would sometimes build up enormous surpluses in season, which they had to destroy in works of art or ritual, to avoid changes in the traditional class structure.
We have seen an enormous surplus of units created through debt, and those in power do not wish to see a change to the current class structure as a new monetary technology is created.
Money is a social construct.
Once that money became currency it extended the reach from those in front of you to those far beyond your shores. It is the act of grasping and letting go in a repeating pattern.
As the alphabet took the magic of words and divided them into repeatable units to be separated and strung along, carried at distance, and then reformed in the quiet of one’s own mind, so currency separates commodities and items of value into concise repeatable units. Packaged, shipped, identical. The oral societies are not led by the alphabet; they are led by the voice and ear. Each item is different, unique, and so bartered over. These countries will not easily move to digital wallets and identical purchases.
Those in power talk about taking care of the ‘unbanked’. But the care is misplaced. A new bank account will earn them fees – their goal. But the oral led person does not necessarily feel they are lacking.
To keep their central bank system going they must have ever expanding borrowing and debt. They have failed to keep inflation in their goal because of the greed of a few. Their system has failed, they know this, and they want to use the new technology of digital money to cement in control.
My biggest thoughts at the moment come from Understanding Media, written by Marshall McLuhan. He writes of Nobel prize winning author Alias Canneti’s book, Crowds and Power, talking about the psychic effects of the Germany inflation after the First World War.
The depreciation of the citizen went along with that of the German Mark.
There was a loss of face and of worth, in which the personal and the monetary units became confused.
Elaine~
My musical style is feeling more Leonard Cohen and less Joni Mitchell now. With a smattering of Alice’s Restaurant.
My apologies for the delay in “Janet Louise” but playing at home in the livingroom is where a song becomes it’s own life. It’s almost there.
This one is about Yellen, Summers, Dimon, punch bowls, musical chairs and the hurricane building.
Hush little citizen, sway, sway, sway, while the music still plays.
This little piggy went to market…
……….
Beautiful Lie
A Poem
A sword and a shield and a castle worth keeping
A rod and a reel and a season afloat
A dog and a pony are so entertaining
But if we all clap then we all know.
A weather report of a still, sullen morning
Building a castle of silica sand
Washed all away in an afternoon torrent
Who carries a fault with a shaking land
A shaming to share is the teacher to apple
A loss of the hours to bake up that pie
Pass out the piece of a coin of your making
All goes to dust if the builder says “mine”.
Who is the love and who is the foe now
When both declare the beautiful lie
Promise me promise what cannot be given
Take off the brake as hills are to climb
a folk tale of a peculiar politician and banker woe
Elaine~
Thank you to Jim Rickards for including me in his bestselling book The New Case for Gold.
……………………………………….
Nothing on this site is intended as individual investment advice. We’re all watching which way the wind is blowing.
……………………………………….
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.
……………………………………….
Not Much of a Holiday (Bank Holidays and Media Persuasion)
words and music Elaine Diane Taylor
Single available on iTunes
……………………………………….
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
……………………………………….
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.
……………………………………….
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.
……………………………………….
Nothing on this site is intended as individual investment advice. We’re all watching which way the wind is blowing.
……………………………………….
Elaine Diane Taylor 