3 Minute Gold News
An interview 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 Sold Out, with Fox & Friends.
Jim is the Editor of Strategic Intelligence, Chief Global Strategist for Meraglim Inc., former general counsel for Long Term Capital Management, and a consultant to the U.S. Intelligence community and U.S. Department of Defence.
Topics:
Payment vs. Reserve Currency
Attack on the USD as Payment Currency
Qualifications for Reserve Currency
Threat to US Reserve Status
US Treasury Weaponizing the Dollar
Clear Alternative: Gold
Interview Link
Sold Out available on Amazon
Attack on the USD as Payment Currency
There is a long list of nations who use the U.S. dollar as a payment currency and are now trying to move away from using the U.S. dollar for payments.
There’s a difference between a payment currency and a reserve currency.
Payment vs. Reserve Currency
With a payment currency, one party wants to buy something from you and offers to pay (aka tenders) in a currency, which could be almost anything. You agree to accept the currency if you’re confident you can give that currency to someone else for something you want.
You give them the goods and they give you the currency.
That’s a payment currency. That’s what all the deals are that everyone is talking about.
This is a big happening. The U.S. dollar is being attacked from all sides as people are looking for substitute payment currencies.
Qualifications for Reserve Currency
A reserve currency is a different thing.
A reserve currency is the saving account of a country.
The countries don’t hold the physical currency itself, all stacked up in $100 bills the basement.
What they do hold as their reserves (savings) are securities denominated in U.S. funds. So, most countries hold U.S. Treasuries (bonds) denominated in U.S. dollars.
The key to being a reserve currency is having a bond market that is large and liquid enough to be easily convertible into U.S. dollars, and that has dealers, underwriters, settlements, derivatives, futures, options, and most importantly, a strong rule of law.
When you ask that question, there are very few countries in the world that can answer yes to most. Germany, Italy, and Japan are three such countries, but they are all too small by far.
Threat to US Reserve Status
That move away from the U.S. dollar as a payment currency is a threat, but the bigger threat is whether there’s a substitute reserve currency.
In the short run, the answer is no.
The list above shows what’s needed to run a bond market big enough to be a reserve currency, but the biggest need for a reserve bond market is the rule of law.
So, the biggest threat to the U.S. world reserve status is actually the U.S. Treasury.
US Treasury Weaponizing the Dollar
The U.S. Treasury has weaponized the dollar by freezing the reserves of the central bank of Russia.
So, now other countries are looking around, saying, “Hey, what if they don’t like what I’ve done or one of my policies? Will they freeze my reserves?”
Gold
If those countries want to get out of the U.S. dollar as a reserve currency the only good alternative is gold.
Jim Rickards can be found on Twitter and at James Rickards Project.
Thank you to Jim Rickards for including me in the New York Times 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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Gold is at $1,990 U.S. per ounce.
via Gold Price
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Cariboo Gold Rush Trail, British Columbia, Canada
My thoughts…
The first leg of the gold rush (and silver rush) has begun. Gold crossed over its all time high price this week.
Ours lives swing from expanding and gaining ground to returning home and rebuilding strength. Every relationship. Every closed system. Every person goes through that swing from fear to excitement, war to peace, So if you’re life is in upheaval then take time to look at the bigger, slower patterns and see where you can gain peace and plan for the future. Look where trends are moving to instead of what is happening now. The gold and silver people are swinging towards excitement even though it comes with knowing that the metals do well when the world is devolving into chaos. But order will come again. The money system is falling apart and will reset in its time. When that happens, and as it’s evolving, the stresses will increase. I choose to own the physical metals so I have less dependence on a system that is becoming less dependable. A 10% parking in gold and silver is a good hedge. Some will want to invest in miners or index funds that follow them.
The world is swinging from valuing a promise to valuing what is solid. The world is fractal and just as your life goes through that swing, so does the greater world.
With so much up in the air, and new technology bringing us evolving ways to pay for goods, it’s a time to diversify and watch. Watch what the elite do. Watch what they say to each other in speeches.
The central banking system is based on ever increasing debt. There must be more people to loan to, or more products to take a loan out for, or a new fractionalized, digital tokenization, where there are loans to invest in pieces of things if no one can afford to buy a whole thing: house, art, stock.
Those with an advantage want to keep it. Those with new technology want to gain that advantage. Diversions will happen while the bigger players are setting up. How can it be any other way?
Liars, liars, banks on fire.
painting by: alex schaefer alex schaefer’s website
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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
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
There’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 us all away
A terrible breeze can blow us all away
A worldwide net
Sees our village grow
’til 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 there’s bread and clowns
Can we afford another go around?
The news comes down.
There’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 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 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
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, when the tide goes out who’s naked on the beach“.
See the wizards wave the Wall Street wands
See the conjured piles of paper green
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Elaine Diane Taylor 