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Jim Rickards on China, Gold, Silver and the SDR

WallStForMainSt  ( Original )
OCT 10, 2014

Published on Oct 10, 2014

Jason Burack of Wall St for Main St had on returning guest Jim Rickards for a 25+ minute interview. 

Jim has 2 best selling books out in the last few years about the global economy: THE DEATH OF MONEY:
THE COMING COLLAPSE OF THE INTERNATIONAL MONETARY SYSTEM and Currency Wars. Both books are must reads and we highly recommend listeners read them! 

Jim has over 35 years of experience working on Wall St as both a lawyer and an investment banker as well as other positions. 

His full bio can be found here:

During this 25 minute interview, Jason asks Jim about the US Federal Reserve and tapering and also about the European Central Bank (ECB) fighting a currency war because the Euro was too strong relative to the US Dollar and how it was hurting European exporters. 

Jim thinks the US Dollar is getting too strong and it will hurt the exports of US exporters and that the Federal Reserve doesn't want a strong dollar and wants to import inflation. 

He says Draghi will not do more than bailout European banks and will not print extra Euros to stimulate the European economy like the Federal Reserve has done in the US. 

He says the ECB has a much different mandate than the Fed and that the ECB will not completely copy the Fed. 

Jason and Jim talk about inflation and stagflation and how the US and Europe seem destined down a path towards Japan where Japan is now experiencing stagflation in their economy due to much higher food and energy prices and higher import prices. 

Next, Jason asks Jim about the US Treasury purchases being assigned to Belgium in the TIC Reports. Belgium has bought more than$300 billion of US Treasuries in the last 12 months. Jim says it was not Belgium who bought the US Treasuries but it could have been a proxy for the Fed, the ECB or China who really bought them. 

He expects the Fed to increase QE in 2015 after the stock market has a correction in the near term. Jim talks about how QE1 and QE2 both ended, markets had a brief "taper tantrum" and then the Fed panicked and gave the markets and Wall St what it wanted, which is more easy money and credit and cheap liquidity to speculate on assets with. 

Jason then asks Jim about China and the IMF's Special Drawing Right (SDR) and if China really wants to transition to the SDR or if China wants to quickly take world reserve currency status from the US. 

Jim says China is not ready for WRC status and it will take at least 1 decade but most likely 2-3 decades before China is ready for that role, if ever. He says China is doing bilateral trade deals outside the US Dollar with its trading partners so China can assume a larger % of global trade reserves in a basket of currencies along with the US Dollar which makes up the SDR. 

Jim lists many reasons why China is not going to be ready for more than a decade to take over the WRC and how the Chinese prefer the SDR as an intermediate step. 

Finally, to wrap up the interview, Jason asks Jim about financial warfare and if he thinks the US government and Wall St are intentionally manipulating down the price of platinum, palladium and oil to hurt Russia's economy since Russia is one of the top world producers for those commodities. 

Jim says basically every market on the planet is manipulated to some degree and some markets are manipulated more than others. Jim says there's been credible evidence that Russian government hackers tried to crash the NASDAQ in the last year or so.

Jim says there's no reason for other hard assets to be rising in price while gold and silver drop.

Jim thinks it's important every person to own physical gold and/or silver outside the banking and financial system as insurance against systemic collapse and the Death of Money. 

Due to time constraints, Jason was not able to ask Jim any detailed questions about the gold market and he will ask him more questions about the gold market during their next interview in a few months. 

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