Wednesday, September 9, 2015

Jim Rickards: The System is Highly Unstable

Here is a new interview Jim Rickards did with Tekoa De Silva and published on the Eric Sprott web site. Mr. De Silva is known for his question about gold to Mario Draghi (in which Mr. Draghi said gold was an important reserve asset). Below is a text summary of the interview and below that you can watch the interview.


During a time of increasing uncertainty in global financial markets, James G. Rickards, best-selling author and advisor to US Department of Defense and Intelligence Communities, was kind enough to share a few comments. 

When asked about People’s Bank of China’s recently announced gold reserve holdings numbers, James noted that, “I’ve been [to] China and [spoke] to secure logistics people, that [told me] gold is being brought in completely off the books…over land using People’s Liberation Army assets…coming in from Kazakhstan, maybe Russia.”

“[So] I’m not saying the People’s Bank of China is lying about their gold [holdings]…But whether to ignore how much gold [affiliates hold] off the books is the question…I think it’s reasonable to estimate at least 3000 tons…[but] there’s reason to think it could be [much] more.”

James also shared a recent conversation with former Federal Reserve Chairman Paul Volcker, in which Mr. Volker explained he “was one of the people in the room [at Camp David]” when the decision was made to close the gold window.

What Nixon actually said—and Paul Volcker confirmed this when I spoke to him—is that they didn’t think they were going off the gold standard…[It] was a temporary suspension until the major global powers could get together…rewrite the system and…get back to a gold standard…at a different [much higher] gold price.”

Since the closing of the gold window there has been confidence in the system. “But if you push one wrong button, the whole thing melts down catastrophically,” James added. “You create a chain reaction…[where] I see gold going to $5000, $7000, [even] $10,000 an oz.”
“[If] you have a global financial panic and need to restore confidence,” James concluded, “that’s the price of gold you would need…And that’s not a complicated equation. That’s the kind of eighth grade math anyone can do.”

Here are his full interview comments with Sprott Global Resource Investment’s Tekoa Da Silva:

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