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Thursday, June 11, 2015
Jim Rickards: Good Evening Mr. Bond
Here is the latest Jim Rickards article he has titled 'Good Evening Mr. Bond'. It's talks about a recent conversation he had with a high ranking banking official he calls Mr. Bond in the article (because he was not at liberty to give out his real name). The conversation was about signs that liquidity in the system may be drying up and could lead to the bigger crisis many are expecting. Below are some quotes from this new article.
"I recently had dinner in my hometown of Darien, Connecticut, with one of the best sources on the inner workings of the U.S. Treasury bond market. Our dinner took place at the Ten Twenty Post bistro, the same restaurant I wrote about in my first book, Currency Wars.
It was there that a friend and I invented the scenario involving a Russian and Chinese gold-backed currency that we played out in the Pentagon-sponsored financial war game described in that book.
Now I had returned for another private conversation with another friend. But this time we were not discussing fictional scenarios for a war game. The conversation involved real threats to real markets happening in real-time.
I can’t reveal the identity of my dinner companion, but suffice it to say he is a senior official of one of the largest banks in the world and has over 30 years’ experience on the front lines of bond markets.
He has been a regular participant in the work of the Treasury Borrowing Advisory Committee, a private group that meets behind closed doors with Federal Reserve and U.S. Treasury officials to discuss supply and demand in the market for Treasury securities and to plan upcoming auctions to make sure markets are not taken by surprise.
He’s an insider’s insider who speaks regularly with major bond buyers in China, Japan and the big U.S. funds like PIMCO and BlackRock. For purposes of this article, let’s just call him “Mr. Bond.”
. . . . . .
It was important to me to move beyond the theoretical and see whether an active market participant like Mr. Bond agreed. His answer sent a chill down my spine. He said, “Jim, it’s worse than you know.”
My added comments: Just before the paragraph in bold above, Jim explained that he had asked Mr. Bond about his theory that events were leading up to a potential crisis situation. This is the world we have to deal with unfortunately. Even though things appear calm and we have avoided another major crisis so far, we get reports like this from credible sources. Jim is certainly not alone in reporting that people inside the system do express concerns that are not in the public media.
All those of us on the outside can do is stay alert and informed and have a plan in mind in case things do go south at some point in the future. After we do that, there is no point in worrying about it. Worrying is wasted energy.