Almost everything Jim Rickards talks about relates to potential monetary system change in one way or another. So we will always post interviews he does on here as they take place. In this one with Epoch Times, Jim goes into detail about how FED policy impacts markets, other nations, the currency volatility we are seeing, etc.Currency volatility can lead to monetary system changes and currency resets.
Here is some info about Epoch Times.
And here are a couple of quotes from the interview:
Epoch Times: What are the effects of the taper?
Mr. Rickards: "It’s very apparent. It starts out in emerging markets, because one of the big drivers of investment in emerging markets is the kind of carry trade.
Investors will borrow dollars then convert them into some emerging market currency, whether it’s Indian rupees or South African rand or Chinese yuan or Brazilian reals, and use that to buy global stocks and bonds. They do it on a leveraged basis and in the past that has produced very high returns.
The problem is if you expect U.S. interest rates to go up, and tapering is not the same as increasing rates but it is a form of tightening, and it is the beginning of that process, you want to unwind that trade very quickly."
The reverse is: You have to dump the emerging markets stocks, get paid in emerging markets currency, convert the currency back to dollars, pay off your dollar debt and go to cash, go to the sidelines.
and he adds later:
"What that is doing in the short run, it is causing those other countries to raise interest rates to defend their currencies. We have seen interest rate increases in Turkey and South Africa; I think we will see them elsewhere in the near future."